The new commissioner of the Social Security Administration (SSA), Martin O’Malley, is promising to overhaul the agency’s system of clawing back billions of dollars it claims were wrongly sent to beneficiaries. O’Malley took office in December 2023, but he is not wasting any time in proposing changes to fix what he calls ‘cruel-hearted’ overpayment clawbacks, saying it “just doesn’t seem right or fair.”
Most overpayments are linked to the Supplemental Security Income (SSI) program, which provides money to people with little or no income, who have a disability, are blind or are at least age 65. Others are connected to the Social Security Disability Insurance (SSDI) program, which aids workers with disabilities and their dependents.
The SSA recovered $4.9 billion of overpayments during the 2023 fiscal year, with an additional $23 billion in overpayments still uncollected, according to its latest annual financial report.
O’Malley said he wants to address overpayment clawbacks as part of a larger effort to address SSA’s “customer service crisis.” At the time of this information, he did not provide specifics but said he anticipated plans would be implemented this year. O’Malley pointed to a 27-year low in staffing. “We’ve been unpacking many of these customer service challenges,” he said. “There’s not one of them that hasn’t been made worse by the short staff.”
During Senate hearings last week, SSA Commissioner O’Malley announced four vital steps to immediately address overpayment issues.
Starting March 25, 2024, SSA would cease the heavy-handed practice of intercepting 100 percent of an overpaid beneficiary’s monthly Social Security benefit by default if they fail to respond to our demand for repayment. Moving forward, SSA will now use a much more reasonable default withholding rate of 10 percent of monthly benefits — similar to the current rate in the Supplemental Security Income (SSI) program.
SSA will be reframing its guidance and procedures so that the burden of proof shifts away from the claimant in determining whether there is any evidence that the claimant was at fault in causing the overpayment.
For the vast majority of beneficiaries who request to work out a repayment plan, SSA recently changed its policy to approve repayment plans of up to 60 months. To qualify, Social Security beneficiaries would only need to provide a verbal summary of their income, resources, and expenses, and recipients of the means-tested SSI program would not need to provide even this summary. This change extended this easier repayment option by an additional two years (from 36 to 60 months).
And finally, SSA will be making it much easier for overpaid beneficiaries to request a waiver of repayment, in the event they believe themselves to have been without any fault and/or without the ability to repay.
