Social Security Overpayment Woes Surge, Reaching a Staggering $23 Billion

In a report, the Social Security Administration (SSA) stated that the amount of overpayments it received in October increased to $23 billion.

According to an SSA Inspector General (IG) report cited in the Cox Media Group and KFF collaboration report dated September 15, 2022, the SSA recovered $4.7 billion in overpayments in fiscal year 2022, with $21.6 billion still outstanding at the beginning of 2023.

According to the Inspector General’s report, the most recent estimates from the SSA indicate that, in fiscal year 2021, the agency overpaid by approximately $6 billion and underpaid by $1.4 billion. The SSA is expected to provide benefits to 67 million Americans in 2023, totaling approximately $1.4 trillion. The report warns the agency to manage the money entrusted to it with care.

According to the IG report, “even the smallest error in the overall payment process can result in millions of dollars in improper payments.”

As reported in the SSA Inspector General (IG) report, the SSA made $6 billion in overpayments and $1.4 billion in underpayments to beneficiaries in fiscal year 2021; however, the recently released Agency Financial Report revealed that the SSA made $11.1 billion in overpayments—paying beneficiaries too much—and $2.5 billion in underpayments to beneficiaries in fiscal year 2022.

“The SSA tries to recoup the overpayment once it finds it has overpaid an individual.”

In fiscal year 2023, the SSA’s uncollected overpayments balance increased from $21.6 billion at the beginning of the year to $23 billion at the end, despite efforts that resulted in $4.9 billion in recovered overpayments.

In 2023, the Social Security Administration will provide nearly 67 million Americans with benefits worth approximately $1.4 trillion through Supplemental Security Income.

Earlier this year, lawmakers became aware of the overpayment problem, and many of them demanded that the collection efforts be stopped.

“The Social Security Administration made mistakes, and now they’re expecting seniors to foot the bill for those errors,” the U.S. Says Representative Marc Molinaro (R-NY), in a statement dated September 21. The majority of victims won’t ever be able to repay Social Security. The Social Security Administration should put an end to its harsh elder prosecution policies and concentrate on making systemic improvements.

SSA did not answer Kiplinger’s request for a comment right away.

Representative Marc Molinaro’s Statement on September 21

United States—Washington, DC. Today, Rep. Marc Molinaro (NY-19) began a campaign to prevent the Social Security Administration (SSA) from vigorously pursuing elderly individuals for errors committed by the SSA.

Over $2 billion in overpayments to Social Security beneficiaries were made by the SSA in 2021. The Social Security Administration notifies recipients and requests their money back when they find overpayments. Many citizens in the 19th Congressional District of New York have reported this to Rep. Molinaro’s office, asking for help. The SSA is asking for the return of thousands of dollars in certain cases that were disbursed over a number of years.

Rep. Molinaro demanded in a letter to the SSA’s Acting Commissioner, Dr. Kilolo Kijakazi, that the organization cease pursuing reimbursement for overpayments right away and take action to modernize its infrastructure to avert further errors.

“The Social Security Administration made mistakes, and now they’re demanding that seniors pay for the administration’s mistakes,” stated Representative Molinaro. In Upstate New York, Social Security is the main source of income for thousands of beneficiaries. The majority of victims won’t ever be able to repay Social Security. The Social Security Administration should put an end to its harsh elder prosecution policies and concentrate on making systemic improvements.

The full text of the letter can be found here:

What are overpayments?

When you get paid more than you should have, it’s called an overpayment. We will send a letter to you and, if applicable, your representative payee informing you of this occurrence. Overpayment notices provide you with information about why you were overpaid, the amount of the overpayment, your options for repayment, and your rights to waive and appeal.
You ought to attentively read your notices.

You have options for repayment if you acknowledge that there was an overpayment and that the overpayment amount is accurate. Unless you request a lower withholding amount and we approve your request, we will withhold the full amount of your Social Security benefit each month. Thirty days after we notify you of the overpayment, full withholding will begin.

Generally, 10% of your monthly maximum federal benefit rate will be withheld if you receive Supplemental Security Income (SSI). You may request that we deduct less from your benefit each month if you are unable to pay for it. Alternatively, you can choose to repay the excess amount at a rate higher than 10%. Your SSI benefits aren’t reduced by us until at least 60 days after we inform you of the overpayment.

In the event that your Social Security benefits are withheld and you are no longer eligible for SSI, you have the option to repay any overpayment by having up to 10% of your monthly benefit withheld.

Should you not be receiving benefits, you ought to take one of the following:

• Type “Social Security” into the search bar on www.pay.gov to use a bank account, debit card, or credit card for payment.
• Make a payment online through your bank through the “Social Security Administration” payment received.
• Make out a check to us for the full amount of the overpayment in a 30-day period.
• Get in touch with us to arrange a repayment schedule in installments each month.