Senior living: Social Security tackles overpayment ‘injustices,’ but problems remain

By David Hilzenrath and Jodie Fleischer, Cox Media Group

In March, newly installed Social Security chief Martin O’Malley criticized agency “injustices” that “shock our shared sense of equity and good conscience as Americans.”

He promised to overhaul the Social Security Administration’s often heavy-handed efforts to claw back money that millions of recipients — including people who are living in poverty, are elderly or have disabilities — were allegedly overpaid, as described by a KFF Health News and Cox Media Group investigation last year.

“Innocent people can be badly hurt,” O’Malley said at the time.

Nearly eight months since he appeared before Congress and announced a series of policy changes, and with days left before he leaves the job, O’Malley’s effort to fix the system has made inroads but remains a work in progress.

For instance, one change, moving away from withholding 100% of people’s monthly Social Security benefits to recover alleged overpayments, has been a major improvement, say advocates for beneficiaries.

“It is a tremendous change,” said Kate Lang of Justice in Aging, who called it “life-changing for many people.”

The number of people from whom the Social Security Administration was withholding full monthly benefits to recoup money declined sharply — from about 46,000 in January to about 7,000 in September, the agency said.

Asked to clarify whether those numbers and others provided for this article covered all programs administered by the agency, the SSA press office did not respond.

Another potentially significant change — relieving beneficiaries of having to prove that an overpayment was not their fault — has not been implemented. The agency said it is working on that.

The agency, meanwhile, seems to be looking to Congress to take the lead on a change some observers see as crucial: limiting how far back the government can reach to recover an alleged overpayment.

Barbara Hubbell of Watkins Glen, New York, called the absence of a statute of limitations “despicable.” Hubbell said her mother was held liable for $43,000 because of an SSA error going back 19 years.

“In what universe is that even legal?” Hubbell said. Paying down the overpayment balance left her mother “essentially penniless,” she added.

In response to questions for this article, Social Security spokesperson Mark Hinkle said legislation is “the best and fastest way” to set a time limit.

Establishing a statute of limitations was not among the policy changes O’Malley announced in his March congressional testimony. In an interview at the time, he said he expected an announcement on it in a few months. It could probably be done by regulation, without an act of Congress, he said.

Speaking generally, Hinkle said the agency has “made substantial progress on overpayments,” reducing the hardship they cause, and “continues to work diligently” to update policies.

The agency is underfunded, he added, is at a near 50-year low in staffing and could do better with more employees. The SSA did not respond to requests for an interview with O’Malley.

O’Malley announced the policy changes after KFF Health News and Cox Media Group jointly published and broadcast investigative reporting on the damage overpayments and clawbacks have done to millions of beneficiaries.

When O’Malley, a former Democratic governor of Maryland, presented his plans to three congressional committees in March, lawmakers greeted him with rare bipartisan praise. But the past several months have shown how hard it can be to turn around a federal bureaucracy that is massive, complex, deeply dysfunctional and, as it says, understaffed.

Now O’Malley’s time is almost up. After this article was published Monday, and with two months left in his term, news outlets reported that he was leaving to run for chair of the Democratic National Committee.

Social Security spokesperson Nicole Tiggemann said O’Malley sent President Joe Biden a letter of resignation effective Friday, Nov. 29.

Lang of Justice in Aging, among the advocacy groups that have been meeting with O’Malley and other Social Security officials, said she appreciates how much the commissioner has achieved in a short time. But, she added, O’Malley has “not been interested in hearing about our feelings that things have fallen short.”

One long-standing policy O’Malley set out to change involves the burden of proof. When the Social Security Administration alleges someone has been overpaid and demands the money back, the burden is on the beneficiary to prove they were not at fault.

Cecilia Malone, 24, a beneficiary in Lithonia, Georgia, said she and her parents spent hundreds of hours trying to get errors corrected.

“Why is the burden on us to ‘prove’ we weren’t overpaid?” Malone said.

It can be exceedingly difficult for beneficiaries to appeal a decision. The alleged overpayments, which can reach tens of thousands of dollars or more, often span years. And people struggling just to survive may have extra difficulty producing financial records from long ago.

What’s more, in letters demanding repayment, the government does not typically spell out its case against the beneficiary — making it hard to mount a defense.

Testifying before House and Senate committees in March, O’Malley promised to shift the burden of proof.

“That should be on the agency,” he said.

The agency expects to finalize “guidance” on the subject “in the coming months,” Hinkle said.

The agency points to reduced wait times and other improvements in a phone system known to leave beneficiaries on hold.

“In September, we answered calls to our national 800 number in an average of 11 minutes,” Hinkle said, “a tremendous improvement from 42 minutes one year ago.”

Still, in response to a nonrepresentative survey by KFF Health News and Cox Media Group focused on overpayments, about half of respondents who said they contacted the agency by phone since April rated that experience as “poor”; few rated it “good” or “excellent.”

The survey was sent to about 600 people who had contacted KFF Health News to share their overpayment stories since September 2023. Almost 200 people answered the survey in September and October of this year.

Most of those who said they contacted the agency by mail since April rated their experience as “poor.”

Jennifer Campbell, 60, a beneficiary in Nelsonville, Ohio, said in late October that she was still waiting for someone at the agency to follow up as described during a phone call in May.

“VERY POOR customer service!!!!!” Campbell wrote.

“Nearly impossible to get a hold of someone,” wrote Kathryn Duff of Colorado Springs, Colorado, who has been helping a disabled family member.

Letters from SSA have left Duff mystified. One was postmarked July 9, 2024, but dated more than two years earlier. Another, dated Aug. 18, 2024, said her family member was overpaid $31,635.80 in benefits from the Supplemental Security Income program, which provides money to people with little or no income or other resources who are disabled, blind or at least 65. But, Duff said, her relative never received SSI benefits.

What’s more, for the dates in question, payments listed in the letter to back up the agency’s math didn’t come close to $31,635.80; they totaled about a quarter of that amount.

Regarding the 100% clawbacks, O’Malley said in March, 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.”

He said that, starting March 25, if a beneficiary doesn’t respond to a new overpayment notice, the agency would default to withholding 10%. The agency warned of “a short transition period.”

That change wasn’t automated until June 25, Hinkle said.

The number of people newly placed in full withholding plummeted from 6,771 in February to 51 in September, according to data the agency provided.

SSA said it would notify recipients they could request reduced withholding if it was already clawing back more than 10% of their monthly checks.

Nonetheless, dozens of beneficiaries or their family members told KFF Health News and Cox Media Group they hadn’t heard they could request reduced withholding. Among those who did ask, roughly half said their requests were approved.

There has been almost a 20% decline in the number of people facing clawbacks of more than 10%, according to SSA, but less than 100% of their monthly checks — from 141,316 as of March 8 to 114,950 as of Oct. 25, agency spokesperson Tiggemann said.

The number of people from whom the agency was withholding exactly 10%, meanwhile, soared more than fortyfold — from just more than 5,000 to well over 200,000. And the number of beneficiaries having any partial benefits withheld to recover an overpayment increased from almost 600,000 to almost 785,000, according to data Tiggemann provided.

Lorraine Anne Davis, 72, of Houston, said she hasn’t received her monthly Social Security payment since June due to an alleged overpayment. Her Medicare premium was being deducted from her monthly benefit, so she’s been left to pay that out-of-pocket.

Davis said she’s going to need a kidney transplant and had been trying to save money for when she’d be unable to work.

A letter from the SSA dated April 8, 2024, two weeks after the new 10% withholding policy was slated to take effect, said it had overpaid her $13,538 and demanded she pay it back within 30 days.

Apparently, the SSA hadn’t accounted for a pension Davis receives from overseas; Davis said she disclosed it when she filed for benefits.

In a letter to her dated June 29, the agency said that, under its new policy, it would change the withholding to only 10% if she asked.

Davis said she asked by phone repeatedly — to no avail.

“Nobody seems to know what’s going on” and “no one seems to be able to help you,” Davis said. “You’re just held captive.”

In October, the agency said she’d receive a payment — in March 2025.

Marley Presiado, a research assistant on the Public Opinion and Survey Research team at KFF, contributed to this report.

Do you have an experience with Social Security overpayments you’d like to share? Click here to contact the reporting team.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — an independent source of health policy research, polling, and journalism.