The head of the Social Security Administration has vowed to revamp the agency's approach to reclaiming funds it believes were mistakenly distributed to recipients, deeming the current process as "unjust and inequitable."
During a conversation with KFF Health News, Commissioner Martin O'Malley shared his plans to introduce reforms that would prevent individuals from facing insurmountable debts, which have pushed some into homelessness and caused financial struggles for the most disadvantaged members of society - including those with disabilities, chronic illnesses, or elderly individuals aged 65 and above.
O'Malley, who assumed his role in December, emphasized that rectifying the harm caused by excessive overpayments and the harsh manner in which they are recouped is a key focus for him.
He outlined specific measures he intends to implement, such as instituting a statute of limitations, shifting the burden of proof to the agency, and capping clawback amounts at 10% for certain beneficiaries.
"We possess both the capability and the authority to tackle many of these injustices," he remarked, indicating that the SSA is prepared to take action independently without waiting for legislative changes.
Following an investigation by KFF Health News and Cox Media Group television stations, the Social Security Administration (SSA) has pledged to make changes to its practices. The investigation revealed that the SSA often reduces or stops monthly benefit payments to recover billions of dollars in overpayments made to beneficiaries, leading to financial hardships for many.
It was discovered that more than 2 million people annually are hit with demands for overpayments, with many cases related to the Supplemental Security Income (SSI) program and the Social Security Disability Insurance (SSDI) program.
As a response, the SSA plans to stop efforts to collect on old overpayments and will no longer terminate benefits for disabled workers who may not have received or understood the overpayment notices.
"We're not fulfilling congressional intent by putting seniors out of their homes and having them live under a bridge when they didn't understand our notice," stated O'Malley from the SSA.
Denise Woods resides in her Chevy, scouring for a safe spot to rest each night at strip malls or truck stops around Savannah, Georgia. Woods disclosed she found herself homeless in 2022 after the SSA — with no explanation — concluded it had overpaid her and insisted she return approximately $58,000. Lacking that sum, Woods' monthly disability benefits were halted by the agency to recover the debt.
Subsequently, the agency partially reinstated her benefit allowance: she now receives $616 per month. However, this amount falls short of covering rent in Savannah, where even basic studio apartments can cost $1,000 monthly.
In January, she fell ill and was admitted to intensive care due to pneumonia. "I signed a [Do Not Resuscitate form] and a nurse inquired, 'Do you understand what this signifies?'" Woods recounted. "I informed her that there was no need to resuscitate me if my heart ceases. They have already shattered my life. I am utterly drained."
Following the publication of the series "Overpayment Outrage" by KFF Health News and Cox Media Group, numerous disability beneficiaries came forward with distressing narratives, detailing how the government dispatched overpayment notifications without clarification and threatened to terminate their primary income source with minimal notice.
Congress members publicly urged the SSA to address the issues. Democratic Sen. Ron Wyden of Oregon declared he would hold monthly meetings with agency officials "until it is resolved."
Sens. Gary Peters and Debbie Stabenow, both Michigan Democrats, dispatched a letter dated Feb. 29 to the SSA, contending that numerous overpayments were instigated by the agency. They requested officials to elucidate the root causes of these issues.
"Ensuring accurate administration of benefits is paramount," Peters emphasized in response to an interview request. "I have heard numerous accounts from individuals in Michigan who have suffered financial difficulties due to erroneous payments from the agency."
During the 2023 fiscal year, the agency managed to recover $4.9 billion in overpayments, yet an additional $23 billion in overpayments remains uncollected, as stated in its most recent annual financial report.
O'Malley expressed his intention to include overpayment clawbacks in a broader initiative to tackle the "customer service crisis" at SSA. While he did not provide specific details, he mentioned that plans are expected to be put into action this year.
It is widely recognized that the federal disability system is plagued by extended delays and dysfunction. Individuals may end up homeless or in deteriorating health while awaiting an initial decision on their application, a process that took an average of over seven months in 2023, according to a letter signed by numerous members of Congress.
O'Malley also noted that the agency ceases disability benefits for individuals who fail to contact the SSA after receiving a clawback notification.
"Frankly, many issues stem from the complexity of our notifications," O'Malley remarked. "One could argue that the only clear instruction in the notice is to call the 800 number."
O'Malley added that addressing the agency's toll-free number is also on his list of priorities for improvement.
Reports indicate that individuals are expressing frustration over extended wait times and difficulties reaching customer service representatives for assistance, as stated by members of Congress, disability lawyers, and others.
O'Malley highlighted a significant decrease in staffing levels over the past 27 years. "We have been addressing numerous issues related to customer service," he explained. "Every challenge we face has been exacerbated by the shortage of staff."
Despite this, he criticized the process for handling overpayments as unjust. Recipients often find themselves having to provide evidence to demonstrate that they did not receive excess funds, O'Malley pointed out.
"One would expect that in a society where individuals are presumed innocent until proven otherwise," he remarked, "the responsibility would lie more with the agency than with the unsuspecting beneficiary."
Advocates for low-income and disabled individuals expressed optimism that O'Malley would follow through on his promises.
"Our clients have long been affected by overpayments, leading to significant hardships," said Jen Burdick, a lawyer at Community Legal Services of Philadelphia, which represents individuals who have received notices of overpayment. "We are encouraged by the new commissioner of the SSA's commitment to reevaluating overpayment policies and hopeful that his administration will offer these individuals the relief they desperately need."
Mike Pistorio voiced concerns that changes may not be implemented quickly enough to benefit him.
Man with Disabilities Faces Eviction Over Alleged Social Security Overpayment
A recent letter dated Sept. 21, 2023, informed a disabled 63-year-old man, Pistorio, that he owes the Social Security Administration $9,344 due to an alleged overpayment. The letter claims that Pistorio received excess funds on behalf of his now-adult children.
Pistorio, who resides in Middletown, Pennsylvania, expressed confusion over the debt, stating that the SSA has not provided satisfactory answers to his inquiries. He and his wife fear eviction from their home as they rely on his $1,266 monthly disability benefits to cover rent.
Despite his health struggles, including four heart stents and escalating diabetes, Pistorio disclosed that the agency proposed deducting $269 monthly from his benefits to settle the debt—a sum he cannot manage.
"I have informed them that this will jeopardize my housing situation," Pistorio lamented.
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