A 12 months in the past, a brand new head of Social Security got down to cease the company from financially devastating lots of the folks it was meant to assist.
The company had lengthy made it a observe to scale back or halt profit checks to recoup billions of {dollars} in funds it despatched recipients however later mentioned they by no means ought to have obtained.
Martin O’Malley, then the Social Security Administration commissioner, announced in March 2024 the company would now not minimize off folks’s month-to-month old-age, survivors, and incapacity checks to recoup cash they’d allegedly been overpaid — a sample he known as “clawback cruelty.” Instead, it might default to withholding 10% of month-to-month advantages. The new coverage allowed individuals who already dwell on little to pay their hire and maintain meals on the desk.
Last Friday, the Trump administration reversed that coverage.
Beginning March 27, to get better new overpayments, the Social Security Administration will robotically withhold 100% of recipients’ month-to-month advantages, the agency announced.
The company mentioned it was performing within the curiosity of fiscal accountability and that the reversal would save the federal government about $7 billion over a decade.
“It is our duty to revise the overpayment repayment policy back to full withholding, as it was during the Obama administration and first Trump administration, to properly safeguard taxpayer funds,” performing Commissioner Lee Dudek mentioned in a information launch.
Advocates for Social Security beneficiaries described the motion as merciless and dangerous.
“The results are predictable: more unnecessary suffering,” mentioned Kathleen Romig, who labored on the Social Security Administration underneath O’Malley and is now director of Social Security and incapacity coverage on the Center on Budget and Policy Priorities.
Kate Lang of the advocacy group Justice in Aging mentioned she was heartbroken.
“Those who are most vulnerable, with the fewest resources, are the ones who will feel the harsh impacts of this change,” she mentioned. Many “are going to be unable to buy food or keep the roof over their head,” she mentioned.
In 2023, after an investigation by KFF Health News and Cox Media Group forged a highlight on overpayments and clawbacks, lawmakers from each events known as on the Social Security Administration to alter its strategy.
The coverage change a 12 months in the past was impressed partially by the plight of individuals resembling Denise Woods, who was sleeping in her Chevy in Savannah, Georgia, in December 2023 whereas contending with lupus and congestive coronary heart failure after the federal government minimize off her incapacity advantages. The authorities was demanding she repay nearly $58,000.
Many overpayments are the results of authorities error. It can take the federal government years to determine it has been paying somebody an excessive amount of, and by then, the quantity the federal government says it’s owed can develop far past a beneficiary’s capacity to repay. And it has typically demanded that recipients repay the complete quantity inside 30 days.
As of October, the SSA was withholding at the least a portion of month-to-month profit funds from a whole lot of 1000’s of individuals, in line with information the SSA offered final fall to KFF Health News and Cox Media Group. The company mentioned it was withholding as much as 10% from 669,903 folks to recoup an overpayment. Asked whether or not these numbers coated all sorts of advantages administered by the SSA, the company’s press workplace didn’t say.
“Under Trump’s leadership, Social Security has reinstated a cruel policy of clawing back Social Security overpayments with no regard for an American’s ability to pay or whether the overpayment was an error by the agency,” mentioned Sen. Ron Wyden of Oregon, the highest Democrat on the Senate Finance Committee.
The new plan to utterly withhold month-to-month advantages from recipients who have been allegedly overpaid doesn’t prolong to the Supplemental Security Income program, considered one of two Social Security applications for folks with disabilities. SSI, as the agency explains, covers “people with disabilities and older adults who have little or no income or resources.”
The authorities’s estimate that reducing folks off utterly will save $7 billion over a decade implies it expects many extra overpayments within the years forward.
The SSA’s March 7 announcement was a part of a broader dismantling of Biden-era insurance policies underneath President Donald Trump. It was additionally a part of a broader upheaval on the Social Security Administration, which introduced in February that it might cut its staff from about 57,000 to 50,000.
In an interview Monday, O’Malley predicted that the general public will expertise for much longer wait occasions making an attempt to get by to the company by cellphone and longer waits for incapacity determinations.
Social Security runs on a really outdated laptop system, he mentioned, and driving folks out of the company who perceive it “can only result in system collapse.”
“The risk of totally shutting down the agency is greatly increased by people mucking around that don’t know what they’re doing,” O’Malley mentioned.
On the PBS NewsHour final week, he suggested recipients to save cash to organize for an interruption of advantages.
Trump deputy Elon Musk has boasted of taking a chainsaw to the federal government and has known as Social Security a Ponzi scheme. In a signed declaration filed in federal court final week, a just lately retired SSA official, Tiffany Flick, mentioned she “witnessed a disregard for critical processes” as members of DOGE — the Department of Government Efficiency, which Trump established by govt order — demanded entry to delicate Social Security methods, together with recordsdata that include beneficiaries’ banking data.
New administration on the SSA known as its workforce “bloated.” But, underneath the earlier administration, the company was telling a starkly totally different story.
A 12 months in the past, O’Malley told lawmakers that, because the variety of folks receiving advantages elevated, “historic underfunding and understaffing” on the company had created a “service delivery crisis.”
Late final 12 months, the company offered information to KFF Health News exhibiting that in September its workforce was close to a 50-year low. As of final month, candidates for incapacity advantages have been ready a median of greater than seven months for a choice, in line with the SSA website.
The staffing cuts will result in extra overpayments than ever and can make it tougher for the folks affected to clear up errors, mentioned Jen Burdick, an legal professional at Community Legal Services of Philadelphia.
As KFF Health News and Cox Media Group revealed in 2023, about 2 million folks a 12 months have been receiving notices from the SSA that they have been overpaid and owed a reimbursement.
People can enchantment overpayment notices, request a decrease withholding charge, or ask the SSA to waive assortment altogether, the company mentioned. The SSA doesn’t pursue recoveries whereas an preliminary enchantment or waiver request is pending, it mentioned.
Shortly earlier than O’Malley left the SSA in November, the company applied adjustments that made it simpler for beneficiaries to get overpayments waived. The company spelled out grounds for figuring out the beneficiary was not at fault — for example, if the company continued to situation overpayments after the beneficiary reported a change of their monetary circumstances that ought to have led to a discount in advantages. Those coverage adjustments stay intact.
Several Republicans who expressed concern about clawbacks within the aftermath of 2023 information protection didn’t reply to inquiries for this text or declined to remark. One of them was Sen. Rick Scott (R-Fla.), who’s now chair of the Senate’s Special Committee on Aging.
“Hardworking American taxpayers pay into Social Security all of their lives so that they can depend on it in the time they need it most,” Scott mentioned in a 2023 letter to the agency. “The fact that the SSA’s actions are leaving some of them worse off, through no fault of their own, is absolutely unacceptable.”
Do you may have an expertise with Social Security overpayments you’d wish to share? Click here to contact our reporting group.
David Hilzenrath:
dhilzenrath@kff.org,
@DavidHilzenrath
Jodie Fleischer, Cox Media Group:
@jodieTVnews
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