Overpayments: The Cost of Administrative Errors
As recently highlighted on CBS News’ 60 Minutes and KFF Health News, few people receiving monthly checks from the Social Security Administration (SSA) realize that Social Security’s mistakes—specifically overpayments—are their responsibility.
Every year, nearly 1 million individuals across the United States receive a bill from Social Security. These individuals are told that SSA miscalculated the benefit amount they were eligible for and paid them more—sometimes by tens of thousands of dollars—than they should have received. Even though many overpayments are not the individual’s fault, they are still responsible for paying the government back. And worse still, some of the alleged overpayments are incorrect.
In 2022, Legal Council for Health Justice assisted 50 individuals with issues related to overpayments and our team regularly sees how much chaos a notice of an overpayment can cause. In addition to helping individuals resolve these challenges, we advocate for changes to the harsh eligibility rules that cause overpayments as well as for expansions to the waiver rules that allow for forgiveness of the overpayment when the individual is not at fault.
Understanding Overpayments:
Overpayments occur when Social Security pays an individual more money during a month than the individual is eligible for, an amount determined by factors such as the individual’s income and assets, marital status, and disability status. Overpayments happen when there are changes to these factors, like an increase in income or even a temporary increase in the value of an individual’s bank account above the $2,000 limit. The complexity of program rules means it is difficult for unrepresented people to know whether they truly have been overpaid. Even when an overpayment is correct, SSA’s process to request a waiver of the overpayment–meaning the individual does not have to repay it–is overly complicated. Despite its broad authority to waive overpayments when the individual is not at fault and cannot afford repayment, SSA does so to only a fraction of requests. While delays and mistakes in processing are understandable–SSA’s workforce has fallen by 16% since 2010 despite a 22% increase in the number of SSA beneficiaries over that same period–people should not be held accountable for these errors and delays.
However, even those who do everything right—like responding to the Administration’s communication in a timely manner or immediately reporting any changes to their resources or income—are still hit with the devastating ask to pay back sometimes thousands of dollars. One of these people is our client, Mariela*.
Mariela’s Story:
Mariela is a hard-working, loving wife of Ricardo Sr.* and mother of three who immigrated to the United States. Her son Ricardo Jr.* has been disabled since birth, and Mariela is an excellent advocate for her son’s–and her entire family’s–health and well-being. Last winter, during a visit to one of Ricardo Jr.’s specialists at Lurie Children’s Hospital, Mariela presented an issue her family was experiencing: although Ricardo Jr. had been receiving full monthly benefits from SSA since he was an infant, his monthly benefit amount had suddenly (and dramatically) decreased to less than $100 per month. These monthly benefits were a significant portion of the family’s income and losing a majority of them created severe hardship.
In collaboration with our legal team, Mariela got in touch with SSA, who claimed that, due to an increase in the family’s income, they had overpaid Ricardo Jr. nearly $8,000 in benefits over the last year. SSA said they would take the money they were owed from Ricardo Jr.’s monthly payments until the full overpayment was recovered.
But Mariela persisted. She provided our legal team with documentation of her family’s sources of income, which allowed our team to calculate how much the family should have received in monthly benefits, proving not only that Ricardo Jr. was currently eligible for several hundred dollars more than what he was currently receiving, but that the $8,000 overpayment was incorrect. In fact, the family had been underpaid and was due over $11,000 in backpay.
Our legal team helped Mariela file a Request for Reconsideration (a formal appeal to SSA), arguing that its decision to reduce Ricardo Jr.’s monthly benefit, as well as the overpayment they alleged, was absolutely incorrect.
Months later, because of her persistence and support from our legal team, SSA provided Mariela an explanation and a new decision. It turned out that, for years, SSA had recorded Ricardo Sr.’s income as Ricardo Jr.’s income, therefore miscalculating the amount that Ricardo Jr. should receive. SSA dropped the overpayment, resumed Ricardo Jr.’s monthly benefits at their full amount, and awarded the family over $11,000 in backpay.
What’s the Solution? Where Do We Go from Here?
At Legal Council, we will continue to assist individuals like Mariela and her family to understand the often-complex benefits eligibility process and system, and how to exercise their rights when needed. Because of complicated rules and difficulty getting answers from local SSA offices, when overpayments arise it is nearly impossible to know whether SSA’s action is correct and to navigate the appeals or waiver process without the help of an advocate. Through medical legal partnerships (MLPs), our model of legal aid enables us to reach individuals like Mariela who may not recognize the issue they are facing as a legal one, or be able to engage effectively with a large, bureaucratic agency like SSA without help.
We also work to do more than address these problems on a case-by-case basis. Legal Council is active in a national coalition of legal aid advocates that pushes for improvements in the disability program rules and processes, including in the overpayment arena. Congress has taken note of the overpayment problems at SSA and held a hearing in October in which Democratic and Republican members agreed that people should not be penalized for SSA’s delays and mistakes. Legal Council, with several allies, submitted detailed written testimony that outlined numerous specific policy changes to streamline the process and make it more equitable. Legal Council continues to engage with Congress, senior SSA administrators, and other partners to advance policies that would protect individuals from harmful and unfair overpayments.
Our representation of clients like Mariela—identifying issues and understanding how those issues impact our clients’ lives—enables us to better understand the widespread, systemic issues they face and, in coalition, craft powerful policy advocacy remedies that address them.
* Names and certain details have been changed to protect client confidentiality.