When Social Security becomes debt collector

Kree Flowers had recently gotten married and decided to log into her account on the Social Security Administration website in February to check the status of her retirement benefits. She was shocked to see a big red number at the top of the page. According to the agency, she was overpaid by $17,121.21.

“At that moment, I immediately think of fraud,” she said. “Someone collected benefits under my name, that’s what I thought.”

The next morning, when Ms. Flowers called the agency, a representative told her that she had been overpaid for her services between 1995 and 2003 and that she had to repay the balance. This made no sense to her: she was 10 years old when the disputed payments began. “My first instinct was to laugh and correct him,” she said.

But Ms Flowers said the representative did not seem perturbed by her age and asked her to fill out a form to dispute the accusations. A few days later, her sister realized she had been overpaid by the same amount.

Each year for the past four years, the SSA has made between $6 billion and $10 billion in overpayments for various benefit programs, according to federal information. The agency had an uncollected overpayment balance of $23 billion as of October. That’s just a small fraction of the more than $1.4 trillion the agency pays out to about 71 million people each year.

A recent investigation report of KFF Health News and Cox Media found that while overpayments sometimes result from errors made by the agency or beneficiaries, “much of the fault lies with the system.” Benefits rules are difficult to follow, the SSA is understaffed, and there are often long delays between changes in recipients’ income and adjustments to their benefits. All of this can lead to overpayments that can go unnoticed for years.

Ms. Flowers, 38, called the agency dozens of times seeking answers. “No one could ever really tell us what happened,” she said. Previous notices about the overpayment had been sent to an old address, so Ms. Flowers had to find out for herself. She suspects the problem is the disability benefits the agency paid her estranged father. (Social Security officials told her they were not authorized to release her father’s private information.)

In the 1990s, when her parents were separated and living in different states but still married, Ms. Flowers’ father applied for and received payments through the Social Security Disability Insurance program, which can cover the children of beneficiaries. Her mother remembers receiving monthly payments of $100 or $120 for about a year, but nowhere near $34,000 over eight years.

People who receive Social Security disability benefits are not allowed to earn more than $1,470 per month in additional income after a nine-month trial work period; beyond this threshold, their benefits are generally canceled. But there is often a lag between when people are no longer eligible for benefits and when their payments stop, either because they do not realize they need to report a change in circumstances or because the administration is slow to process their file.

In an interview, Ms. Flowers’ father said he believed he had qualified for benefits during the overpayment period and was not sure what happened. He said it was “outrageous” that the SSA would seek to recover money from people who were children at the time the payments were made.

The overpayment wasn’t the Flowers siblings’ fault, and it might not have been their father’s fault either. However, the sisters were responsible.

“I would say work-related overpayments are the rule, not the exception,” said Denise Hoffman, a principal researcher at Mathematica, a research and data analytics consultancy. His research found that although overpayments are generally rare in disability insurance, people whose incomes exceeded the threshold were overpaid about 80 percent of the time. Ms. Hoffman found that the median overpayment lasted nine months and totaled $9,282.

Depending on agency rules, dependents or spouses on the beneficiary’s records may be held responsible for overpayments. People may also be held liable if they manage payments on behalf of another person, such as a minor child or an older parent with dementia.

It’s unclear how often the agency attempts to recover overpayments from account holders’ relatives. An SSA spokesperson said its system was not designed to easily determine this information and that efforts were being made to clarify the issue. According to a 2016 report According to the Government Accountability Office, about 30 percent of people whose overpayments were written off last fiscal year were under 18 when their parents received benefits.

In 2015, when Sarah Benavidez’s daughter was 2 months old, Ms. Benavidez and the child’s father went to their local SSA office to inquire about benefits paid to the girl. They were told their daughter was eligible for benefits because her father, a former police officer, was injured on the job and qualified for disability insurance. Ultimately, Ms. Benavidez received about $300 a month.

“It helped her a lot, especially when she was in diapers,” she recalls.

The child’s father left shortly afterward, Ms. Benavidez said, but she continued to receive checks for their daughter. In 2020, she received a letter from the SSA stating that the father had received workers’ compensation benefits while also receiving disability checks, resulting in an overpayment.

Parents had reported workers’ compensation benefits initially, but overpayments can still occur if “no one at Social Security has done the proper budgeting,” said Anne Callagy, director of the government benefits department at the Legal Aid Society of New York. “And then, years later, they get an overpayment notice.”

As a result, Ms. Benavidez’s 5-year-old daughter owed the Social Security Administration $12,768. “I was like, is this a scam?” » said Ms. Benavidez.

The letter said she had 30 days to repay the money or her daughter’s Social Security payments would stop. Ms. Benavidez requested that the charge be reconsidered, but without success. It wasn’t enough to show that the overpayment wasn’t her fault: To win the appeal, she would also have to prove she couldn’t repay the money, said Social Security Director Kathleen Romig and disability policy at the Center on Budget and Policy Priorities.

“Almost no one completes the process successfully,” she said of overpayment waiver requests.

Ms. Benavidez’s daughter was still eligible to receive $120 per month, which the SSA withheld and credited to the overpayment balance. If nothing changes, her daughter’s overpayments will be considered repaid in 2030. More than 75 percent of recovered disability insurance overpayments are collected through withheld payments, according to the 2016 GAO report.

“I just feel like they’ll take the money until they feel like they’ve paid,” Ms. Benavidez said. “I don’t even know if I want it back. “I’m going to get paranoid.”

Beneficiaries sometimes receive overpayment letters long after they stop receiving their benefits, and the SSA attempts to recover the money through other means.

Temi Aina, a Queens resident, learned she was charged an overpayment when she did not receive the expected tax rebate. A few weeks later, a letter arrived from the SSA stating that she had received overpayments to her father’s account totaling $11,681 over four years that began in 2005, when she was 13 years old. His brother also owed money.

She made the case, providing evidence that her father did not use the money for his own benefit. The affair lasted two years. She lost two tax refunds totaling about $1,000, and at one point she received a letter saying the SSA would begin garnishing her wages. But she had changed jobs by the time the agency contacted her former employer, so the change was not immediately effective.

Ms. Benavidez, Ms. Flowers and Ms. Aina all attempted to fight their overpayments through the standard appeals process.

After Ms. Flowers submitted her appeal documents, she saw a TikTok video posted by someone in a similar situation. The person had contacted the local representative in Congress about the matter. Ms. Flowers, who lives in Norcross, Ga., contacted Rep. Lucy McBath, whose office contacted the SSA. Ms Flowers appeared at a hearing this summer and was told the financial information she submitted proved she could not repay the money. . Her overpayment of $17,121 was removed from her account. Her sister’s case continues.

Mrs. Flowers did a viral TikTok video about her experience and said she has heard hundreds of people tell similar stories.

Ms. Benavidez, who lives in Louisiana, saw Ms. Flowers’ video and tried to contact her House representative, Clay Higgins. She hopes to get help resolving the overpayment. The SSA continues to withhold her daughter’s $120 payments.

A representative for the agency said it is working with people to navigate the overpayment process. People have the right to appeal any overpayment or follow a repayment plan with options as low as $10 per month.

Ms. Aina eventually contacted a lawyer from the Legal Aid Society who helped her. In July 2021, the balance of his remaining overpayment was reversed.

Ms Aina said she cried tears of joy when she learned the remaining debt had been cleared. “I’m really glad it worked out in my favor, because I feel like no one should have to go through this if they’re not at fault,” she said. His brother’s overpayment remains unresolved.