'It’s scary’: American families left homeless and unable to repay mega bills after Social Security benefits blunder. But four policy changes may help fix the problem

Earlier this year, it announced four steps it will be taking to immediately address overpayment issues and make things easier for beneficiaries.

According to the investigation by KFF Health News and Cox Media Group, the Social Security Administration (SSA) demanded repayments from millions of Americans and sometimes the amounts they had to repay reached tens of thousands of dollars. When they didn't respond to this demand for repayment, 100% of their monthly checks were withheld until it was enough to cover the debt.

As Social Security Commissioner Martin O’Malley acknowledged this week, recovering overpaid benefits "without regard to the larger purpose of the program can result in grave injustices to individuals." Some of those affected even lost their homes.

The first of the four changes revealed this week is a 10% cap on the monthly Social Security benefit that will be withheld by default if an overpaid beneficiary doesn't respond to the demand for repayment.

The duration of repayment plans will be increased from up to 36 months to up to 60 months. To qualify, beneficiaries would only need to provide a verbal summary of their income, resources, and expenses, and recipients of the means-tested SSI program would not need to provide even this summary.

"And finally, we will be making it much easier for overpaid beneficiaries to request a waiver of repayment in the event they believe themselves to have been without any fault and/or without the ability to repay," said O’Malley.

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The SSA’s overpayment problem

These changes have been a long time coming. In October, the agency launched a review, and in December, the Senate Finance Committee said it's "going to watchdog Social Security’s overpayment program, and will meet with Social Security every month until it is fixed."

In the fiscal year 2023 (Oct. 1, 2022 to Sept. 30, 2023), the SSA recovered over $4.9 billion in overpayments, but it ended the year with $23 billion of overpayments still uncollected. According to KFF Health News, the agency has admitted in the past that many overpayments were the result of errors by the government rather than the people — often elderly, poor or disabled — receiving the extra money.

Those getting Social Security benefits typically spend their checks on critical living expenses and health care. They’re not stashing it away to cover unexpected four- or five-figure repayment bills from the SSA.

For some, the repayment burden is life-altering. As part of its probe into the matter, WSB-TV Channel 2 Action News spoke with Nicole Eberhart at an extended-stay hotel, where the legally-blind mom is now living after losing her $1,700 monthly disability check from the SSA due to overpayments.

“I was using that money to actually pay for the apartment we were living in,” she told consumer investigator Justin Gray, who has been digging into the overpayment issue for three years. Here’s what you can do if you receive a dreaded repayment notice in the post.

Paying back benefits

As of December 2023, there were 67 million Americans receiving Social Security benefits. Of that total, over 8.5 million Americans were claiming disability insurance from the SSA, receiving an average monthly benefit of $1,395, according to federal data.

With numbers like that, it is only natural that mistakes can and do fall through the cracks — but the SSA does have official procedures in place to resolve payment issues. “Benefits are overpaid when we can't accurately calculate your benefit amount because our information is wrong or incomplete,” the SSA explains online. “It can happen if you don't share updates with us about what's changed in your life, like your ability to work, living situation, marital status or income.”

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How to reduce or appeal your repayment

A shock Social Security repayment notice doesn’t have to end in your financial ruin. There are ways to request help from the SSA.

If you receive a valid overpayment notice but are unable to pay the SSA back within 30 days, you can request to repay your debt in smaller and more manageable monthly payments.