Sens. Gary Peters (D-MI) and Debbie Stabenow (D-MI) urged the Social Security Administration to crack down on overpayment errors in a letter on Thursday.
The senators wrote the overpayment problems, which can take years to spot, can place financial hardships on millions of recipients, including seniors and disabled people. Recipients who are overpaid are expected to pay back the funds.
“We have heard from numerous Michiganders regarding the impact unexpected overpayments that were sent by the SSA have caused on some of the most vulnerable beneficiaries of Social Security,” the senators wrote. “Overpayments can pose incredibly difficult hardships on beneficiaries who’ve committed no wrongdoing and are now responsible for repaying improper payments. Because of their devastating impact, it is critical for the agency to improve its processes and controls to reduce the number of overpayments for beneficiaries who rely on these critical benefits.”
The administration has admitted to sending out more than $6 billion in overpayments each year, with a record $11 billion in fiscal 2022 alone, according to the senators. Because the errors can take so long to notice, recipients can be on the hook for tens or hundreds of thousands of dollars in debt.
The lawmakers claimed the errors could occur in several ways, but it is usually the fault of the SSA. Some errors include miscalculating a recipient’s benefits or failure on the part of the recipient to notify the office of a change in income. If a beneficiary does notice a change in his or her payments, the beneficiary is encouraged to report the matter immediately.
For recipients who are overpaid and receive a notice that they owe thousands to the agency, there are multiple ways to handle the problem, such as appealing the bill, setting up a repayment plan, or declaring bankruptcy.
“Each person’s situation is unique, and the agency handles overpayments on a case-by-case basis,” the SSA said in a statement last year. “In particular, if a person doesn’t agree that they’ve been overpaid, or believes the amount is incorrect, they can appeal. If they believe they shouldn’t have to pay the money back, they can request that the agency waive collection of the overpayment. There’s no time limit for filing a waiver.”
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Two million people are also overcompensated every year, according to the lawmakers. The senators also asked how the agency plans to correct the problems and improve payment accuracy.
The SSA pays more than $1.4 trillion to more than 71 million people each year, including 2 million people in Michigan. The earliest a person can receive retirement payments is 62, but people on disability can receive a smaller check sooner. The maximum retirement benefit is up to $4,873 a month, which goes to the highest earners, who retire at 70.