The new chief of the Social Security Administration recently outlined for senators a plan to tackle overpayments and clawbacks, which affect millions of beneficiaries and, he said, have caused “grave injustices” and left people “in dire financial straits.”
As a joint investigation by KFF Health News and Cox Media Group television stations reported in September, the agency has harmed people it is supposed to help by reducing or halting benefit checks to recoup billions of dollars in payments it sent them but later said they should never have received.
Testifying at two Senate hearings on Wednesday, March 20, Social Security Commissioner Martin O’Malley said he is taking several steps to address the problem.
Starting next week, O’Malley said, the agency will stop “that clawback cruelty” of intercepting 100% of a beneficiary’s monthly Social Security check if they fail to respond to a demand for repayment.
Instead, the agency will default to withholding 10% of the recipient’s monthly benefits to recoup the debt, he said.
That would have helped Denise Woods, a Savannah, Georgia, woman who ended up living in her car after the SSA clawed back her entire monthly benefit to recoup a $58,000 overpayment. The agency restored some of her benefits after KFF Health News-CMG reported her story in December.
“People like Denise and others shouldn’t be penalized for situations they did not create,” Sen. Raphael Warnock, D-Georgia, said during one of the hearings. “I think it’s always important that we center the people as we discuss policy, remember the human face of the issues we talk about.”
On the question of who caused an overpayment — the beneficiary or someone at the agency — the burden of proof will shift from the beneficiary to the agency, O’Malley said.
The agency will make it much easier for people who believe they weren’t at fault or can’t repay the debt to seek a waiver, O’Malley said, which he later clarified…
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