The Atlanta Journal-Constitution
Social Security chief says he’ll curb ‘cruel-hearted’ overpayment clawbacks
Agency routinely reduces or halts monthly checks.
The Social Security Administration’s new chief is promising to overhaul the agency’s system of clawing back billions of dollars it claims was wrongly sent to benefi- ciaries, saying it “just doesn’t seem right or fair.”
SSA Commissioner Martin O’Malley said that in the coming days, he will propose changes to help people avoid crushing debts that
e driven some into homelessness and caused financial hardships for the nation’s most vulnerable — the poorest of the poor and people wi h disabilities or persistent medical conditions or who are at least age 65.
O’Malley, who took office in December, said that “addressing the injustice we do to too many Americans because of overpayments, the rather cruel-hearted and mindless way that we recover those overpayments,” is among his top priorities.
He said he has concrete steps in mind, such as establishing a statute of limitations, shifting the burden of proof to the agency, and imposing a 10% cap on claw- backs for some beneficiaries.
“We do have the ability and we do have the author- ity to address many of these injustices,” he said,suggesting that the SSA won’t have to wait for congressional action.
The pledge comes after an investigation by KFF Health News and Cox Media Group television stations revealed that the SSA routinely reduces or halts monthly benefit checks to reclaim billions of dollars in payments it sent to beneficiaries, only to determine later that they should not have received the money.
In some cases, years passed before the govern- ment discovered its mistake and then imposed debts that sometimes have reached tens of thousands of dol- lars on people who cannot afford to pay. KFF Health News and Cox Media Group discovered that more than 2 million people a year have been hit with overpayment demands.
Most overpayments are linked to the Supplemen- tal Security Income pro- gram, which provides money to people with little or no income, who are dis- abled, blind, or at least age 65. Others are connected to the Social Security Disability Insurance program, which aids disabled workers and their dependents.
O’Malley said the agency plans to cease efforts to claw back years-old overpayments and halt the practice of ter- minating benefits for dis- abled workers who don’t respond to overpayment notices because they did not receive them or couldn’t make sense of them.
“We’re not fulfilling con- gressional intent by putting seniors out of their homes and having them live under a bridge when they didn’t understand our notice,” O’Malley said.
Denise Woods lives in her Chevy, seeking a safe place to sleep each night at strip malls or truck stops around Savannah. Woods said she became homeless in 2022 after the SSA — without explanation — determined it had overpaid her and demanded she send back roughly $58,000. Woods didn’t have that amount on hand, so the agency cut off her monthly disability bene- fits to recoup the debt.
The agency later restored some of her benefit allow- ance; she gets $616 a month. That’s not enough to cover rent in Savannah, where even modest studio apartments can run $1,000 a month.
In January, she fell ill and landed in intensive care with pneumonia. “I signed a (Do Not Resuscitate form) and a nurse asked, ‘Do you know what this means?’” Woods said. “I told her there was no reason to revive me if my heart stops. They have already ruined my life. I’m beyond exhausted.”
After KFF Health News and Cox Media Group pub- lished the series “Overpayment Outrage,” hundreds of disability beneficiaries came forward wi h troubling accounts, including how the government sent them over- payment notices without explanation and threatened to cut off their main source of income with little warning.
Members of Congress pub- licly demanded that SSA fix the problems. Sen. Ron Wyden, D-Oregon, said he would meet monthly with agency officials “until it is fixed.”
Sens. Gary Peters and Deb- bie Stabenow, both Michi- gan Democrats, sent a let- ter dated Feb. 29 to the SSA, saying many overpayments were caused by the agency. They asked officials to explain what is causing the problems.
“It’s absolutely critical that the agency is accurately administering these ben- efits,” Peters said in writ- ten response to an inter- view request. “I’ve heard from too many people across Michigan who have faced financial hardship after the agency sent them incorrect payments.”
he agenc y recovered $4.9 billion of overpayments during the 2023 fiscal year, wi h an additional $23 billion in overpayments still uncollected, according to its lat- est annual financial report.
O’Malley said he wants to address overpayment clawbacks as part of a larger effort to address SSA’s “cus- tomer service crisis.” He did not provide specifics but said he anticipated plans would be implemented this year.
Officials have long acknowledged that the
federal disability system is dogged by lengthy delays and dysfunction. Some people become homeless or grow sicker while waiting for an initialdecision on anapplication, which took an average of more than seven months in 2023, according to a letter signed by dozens of members of Congress.
O’Malley said the agency terminates disability benefits for some people who don’t contact the SSA after receiving a clawback letter.
“To be honest, a lot of problems (are caused by) our notices being hard to read,” O’Malley said. “In fact, one might argue that the only thing that’s really clear about the notice is to call the 800 number.”
The agency’s toll-free number, O’Malley said, is on his fix-it list, too.
Cal ers complain of lengthy hold times and often are unable to reach an agent for help, according to congressional members, disability attorneys and others.
O’Malley pointed to a 27-year low in staffing. “We’ve been unpacking many of these customer service challenges,” he said. “There’s not one of them that hasn’t been made worse by the short staff.”
Still, he said, the overpayment process is unfair. Beneficiaries often must produce evidence to show they did not receive extra money, O’Malley noted.
“One would assume that in a country where people are innocent until proven guilty,” he said, “that the burden should fall more on the agency than on the unwi - ting beneficiary.”
Advocates for the poor and disabled said they are hopeful O’Malley will stick to his commitments.
“Overpayments have long plagued our clients and caused severe hardship,” said Jen Burdick, an attorney with Community Legal Services of Philadelphia, which represents clients who have received overpayment notices. “We are heartened to see that SSA’s new commissioner is taking a hard look at overpayment policy reforms and optimistic and hopeful his administration will providethese folks some long-needed relief.”
‘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.’
Martin O' Malley SSA Commissioner
David Hilzenrath of KFF Health News and Jodie Fleischer of Cox Media Group contributed to this report.
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.