After years of criticism, Social Security has announced plans to change how it collects funds from disability claimants who have been overpaid benefits.
Overpayments can occur for many reasons. Sometimes, Social Security does not properly calculate how payments should change when someone returns to work. In other cases, the agency made a mistake from the beginning, paying out more than an individual was entitled to due to a mathematical error.
Regardless of the reason, the consequences could be devastating. Disability recipients who need their monthly benefits to survive have found their payments reduced to almost nothing while Social Security collects the overpayment.
Thankfully, the way that SSA gets their money back is about to drastically change. The agency says it will now collect 10 percent of a recipient’s monthly benefit or $10 – whichever is greater – to make up for the overpayment.
Beneficiaries who would like a rate lower than 10 percent will be approved if the overpayment will be recovered within 60 months, rather than the previous deadline of 36 months.
While this policy only automatically applies to new overpayment cases, the agency says they will apply it to those who are currently dealing with the complicated overpayment process if they are contacted.
And there will be some exception, such as in cases of fraud.
“Social Security is taking a critically important step towards our goal of ensuring our overpayment policies are fair, equitable, and do not unduly harm anyone,” Social Security Commissioner Martin O’Malley said in a statement. “It’s unconscionable that someone would find themselves facing homelessness or unable to pay bills because Social Security withheld their entire payment for recovery of an overpayment.”
