25 Investigates uncovers billions of dollars in social security overpayments

Local families who depend on Social Security could get a big surprise in the mail: 25 Investigates found the government is clawing back $21 billion dollars in overpayments nationwide.

“I wasn’t aware that I was doing anything wrong,” said Lori Cochran of Erie, Pennsylvania.

Cochran is fully aware now. She said she received a letter demanding she repay more than two years of Social Security benefits.

Cochran said the administration determined she wasn’t entitled to a $914 monthly payment she received for nearly 30 months.

That amounted to tens of thousands of dollars in overpayment she’s expected to return.

“I started having, like, heart palpitations because I’m like, ‘Oh my god, $27,000,’” Cochran said. “‘They’re going to expect me to pay that back. How am I ever going to pay that back?’ And just panic mode.”

Cochran said she is college-educated but unable to work because of her health. She has multiple sclerosis, a disease that impacts the central nervous system.

Social Security checks are issued every month, and the amounts are based on complex calculations.

When a recipient’s finances change or get reported incorrectly, they can receive more money than they should.

25 Investigates – through a collaboration with our sister stations in seven states, and KFF Health News – found the extra money can flow for years before overpayments are discovered.

The Social Security Administration said families are allowed to appeal overpayment bills if they think it’s an error or it wasn’t their fault.

If the amount creates too much of a hardship, recipients can also request a waiver or payment plan.

The administration declined an on-camera interview.

In a statement, a spokesperson said the agency is required by law to collect on overpayments.

“While staffing losses and resource constraints have challenged our service delivery, our payment accuracy rates remain very high,” reads the statement.

Records show the majority of the overpayments are from Supplemental Security Income – or SSI – beneficiaries who exceeded asset or income limits. Those beneficiaries are retirement-aged, low-income, and/or people with disabilities.

“The agency knows full well that they don’t have some pile of cash that they’re sitting on,” Rebecca Vallas, senior fellow of the Century Foundation, said.

Vallas handled overpayment cases for years as a legal aid lawyer.

She said even when it’s the agency’s own mistake, it still demands the money back.

“The reality is you can do everything right and still get hit by a massive overpayment from Social Security,” Vallas said.

Two longtime Social Security workers who lead their employee union, say critically low staffing levels mean overpayments can go undetected for years- and it can take even longer for notification letters to go out.

“Overpayments have been around for as long as I’ve been around,” worker Angela DiGeronimo, a regional vice president for American Federation of Government Employees Social Security Administration Council 220, said. “But what has changed is that we don’t have enough people to do the work.”

“It’s our responsibility to let them know,” she said. “But it’s also the public’s responsibility to let us know when there’s changes and they know what their reporting responsibilities are.”

Some disabled or elderly beneficiaries might not understand the rules that come along with those monthly checks.

But low staffing may also mean some people tried to report a change in their income or disability and couldn’t get through to the call center or an appointment in person.

“We take an oath to be stewards of the trust fund,” Jessica LaPointe, president of the AFGE SSA Council 220, said. “So unfortunately, we do have to collect overpayments or attempt to collect overpayments when somebody from the public has been overpaid.”

What happened in Cochran’s case?

Individual Social Security recipients are not allowed to have more than $2,000 in assets.

Cochran said the agency flagged a life insurance policy her mom gave her that has a cash value of $4,000. She said she was unaware the policy had any cash option and she never planned to withdraw any money from it.

“For every month that balance of $4,000 was on me, they were taking the $914 I was getting in Social Security and telling me I owed that back,” Cochran said.

Cochran said she doesn’t have $27,00 to pay the government back.

“I had to cash out my life insurance policy,” Cochran said.

And as long as she’s dependent on Social Security - she said she never will.

“I know a lot of people look down on people that are on Social Security,” Cochran said. “But that’s not a choice that people have to go on Social Security. It’s just a necessity.”

Below is the Administration’s full statement in response to our requests for an interview:

We continually strive to improve stewardship of our programs and reduce improper payments. While staffing losses and resource constraints have challenged our service delivery, our payment accuracy rates remain very high.

We understand getting notice of an overpayment may be unsettling or unclear and we work with people to navigate the overpayment process. When overpayments occur, we inform people about the fact and amount of the overpayment, their right to appeal, and the options to repay or (in some cases) receive waivers for the overpayment debts. People can appeal an overpayment if they disagree with the overpayment debt decision or the overpayment amount. They also have the right to ask Social Security to waive collection of their debt if they believe the overpayment was not their fault and they cannot afford to pay it back. We do not pursue recoveries while an initial appeal or waiver is pending. We examine each waiver request to determine if the individual caused the debt and their ability to repay the debt. If we can’t waive the debt, we have flexible repayment options—including repayment of as low as $10 per month.

Our payment accuracy rates are high, yet even small error rates add up to substantial improper payment amounts, given the magnitude of the benefits we pay each year. For instance, in fiscal year 2021, we issued nearly $1.2 trillion in benefit payments. Our Social Security Retirement, Survivors, and Disability benefit payment accuracy is consistently high—less than 0.5 percent of Social Security payments are overpayments. For the Supplemental Security Income (SSI) program, overpayments also represent a small percentage of payments—about 7 percent—but are higher than our overall payment accuracy rate partially due to the complexity in administering income and resource limits and asset evaluations.

Nonetheless, Congress recognized that beneficiaries will be overpaid. Therefore, consistent with our stewardship responsibilities, Social Security is required by law to adjust benefits or recover debts when we establish that someone received payments to which they are not entitled and an overpayment occurs. We must maintain our responsibilities to taxpayers to be good stewards of the trust funds. Each person’s situation is unique, and we handle overpayments on a case-by-case basis. Overpayments can occur for many reasons, such as when a beneficiary does not timely report work or other changes that can affect their benefits.

Improving our business processes to serve our customers better remains a top priority. We are making better use of data and technology to prevent some overpayments. We continue to invest in improvements to make it easier for people to interact with us so we can prevent overpayments. For instance, we are developing a new electronic payroll data exchange program that will automatically use wage information to adjust payment amounts when appropriate, which will help reduce improper payments and reporting responsibilities for beneficiaries.

We are also working to streamline and simplify our waiver request form to make it easier to understand and less burdensome for people to request a debt waiver. Through proposed rulemaking, we plan to propose to simplify our rules for how a person can demonstrate eligibility for waiver of recovery of an overpayment debt.

We do not report on the number of debtors.

—  Nicole Tiggemann, Social Security Administration Press Office

25 Investigates will share more details about this story and the people being impacted tomorrow on Boston25News.com. Be sure to check back for more information.

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