Seniors Facing Social Security Overpayments: $40,000 Debt Leaves Texas Woman Struggling!

5 min read

Race Day Live  Social Security is one of the largest programs in the United States, with nearly 68 million people receiving benefits every month.

In 2024 alone, the program paid out a total of about $1.5 trillion. Despite its scale, Social Security can be confusing, and mistakes happen — both on the part of applicants and the Social Security Administration (SSA). These errors sometimes lead to overpayments, which can have serious consequences.

Overpayments Are More Common Than You Think

In the period from 2015 to 2022, the SSA estimated that it made over $71.8 billion in improper payments, most of which were overpayments.

Although this amount is huge, it still only represents a tiny fraction — about 0.84% — of the $8.6 trillion in benefits the SSA paid out during that time.

A December 2023 poll by Redfield & Wilton Strategies found that one in four Social Security recipients had accidentally been overpaid, many of whom are now being asked to repay the excess amounts.

The SSA demands repayment from approximately 2 million people each year, according to documents obtained through a Freedom of Information Act request by KFF Health News and Cox Media Group. For some people, these repayments can create a lot of financial problems.

Texas Woman Faces Hardship After Owing $40,000

One shocking example comes from Texas, where a woman collecting Social Security Disability Insurance (SSDI) unknowingly received overpayments for several years.

The SSA didn’t inform her of the overpayment for over two years, only telling her at the end of 2019 that she owed $40,000.

She was given just 30 days to repay, and, to make matters worse, her benefits were completely stopped. Her mother shared her story, saying the situation left the family in financial distress.

A Missouri Man Loses Everything Over $67,000 Debt

In another case, a Missouri man owed $67,000 to the SSA in back pay, which led to him losing his car and eventually becoming homeless.

At the age of 68, he expressed deep sadness about losing everything, thanking food stamps for helping him through the tough times.

These stories reflect the real-life struggles that Social Security overpayments can cause, highlighting the urgent need for reform and clearer communication from the SSA.

SSA Implements New Policies to Prevent Overpayments

Seniors Facing Social Security Overpayments: $40,000 Debt Leaves Texas Woman Struggling!

To address the growing problem of overpayments, the SSA has introduced new policies. One change in 2024 was to stop withholding 100% of a person’s benefits.

Instead, the SSA now collects the greater of 10% or $10 from overpaid recipients. However, despite this shift, the SSA was still withholding 100% of benefits from around 7,000 people as of September 2024. There is also no statute of limitations for how far back the SSA can go in recovering overpayments.

Other changes include extending the maximum repayment term from 36 months to 60 months.

The SSA has also made it easier for recipients to request a waiver if they believe they are not at fault or cannot afford to repay. Additionally, the burden of proof is shifting, so claimants no longer have to prove they weren’t overpaid.

Read More:

What You Can Do If You Are Overpaid?

If you are overpaid by the SSA, you will be notified by mail. If you believe the amount is incorrect or you shouldn’t have to repay, you can file an appeal within 60 days of receiving the notice.

You can also submit a Request for Waiver of Overpayment Recovery if you believe the overpayment is not your fault or if you can’t afford to pay it back.

For overpayments of $1,000 or less, you can request a waiver over the phone without needing to submit a written request. If you fail to take action, the SSA may begin withholding a portion of your future benefits.

If you’re no longer receiving benefits, you must contact the SSA to set up a payment plan. Failure to do so could lead to the SSA garnishing your tax returns, wages, or future benefits.

Steps to Prevent Overpayments

Overpayments can be avoided by staying proactive. Around 90% of people aged 65 and older rely on Social Security benefits.

To prevent errors, it’s important to regularly check your earnings history on “my Social Security” to ensure that all records are accurate.

You can also use the benefit calculator to help you understand how much you should be receiving. Early detection of mistakes can help prevent years of overpayments.

If you have worked in the public sector and are receiving a non-covered pension, make sure to report this to the SSA when you retire.

Similarly, if you are getting disability payments but go back to work, it’s crucial to know the rules around how much you can earn before your benefits stop.

Understanding the rules of the Supplemental Security Income (SSI) program is equally important, as it has strict reporting requirements and can often lead to overpayments if not properly managed.

Conclusion

Social Security overpayments can cause severe financial strain for many recipients, as highlighted by the cases of individuals in Texas and Missouri.

While the SSA is working to improve policies, individuals need to be proactive in checking their earnings records and understanding the rules around Social Security benefits.

Keeping a close eye on your benefits can help avoid mistakes, saving you from unexpected repayment demands in the future.

Reference

Disclaimer- Our team has thoroughly fact-checked this article to ensure its accuracy and maintain its credibility. We are committed to providing honest and reliable content for our readers.

Yvonne Scott http://race-day-live.com

Yvonne Scott is a highly skilled content writer and editor, renowned for her ability to craft engaging, well-researched, and meticulously polished
content. With an eye for detail and a passion for clarity, Yvonne excels at transforming complex ideas into accessible and compelling narratives. Her writing not only informs but also captivates, making her an invaluable asset to any team.
As an editor, Yvonne's expertise shines through her keen understanding of grammar, structure, and tone, ensuring every piece meets the highest standards.

You May Also Like

More From Author

+ There are no comments

Add yours