Citizens all over the country have experienced getting short changed when they receive their Federal Tax refund with no explanation. Upon investigation they discover that the SSA is recovering an unexplained “overpayment” of benefits.
One Arizona taxpayer was charged $2,200 for an over payment that occurred 32 years ago to the person who was a student for educational benefits paid to her as a result of her father’s death.
The Social Security Administration announced on Monday it is suspending a controversial program that goes after adult children of deceased taxpayers who the government claims were recipients of overpayments more than a decade ago. Acting Social Security Commissioner Carolyn W. Colvin said she has directed an immediate halt to the three-year-old program while the agency does a review. The controversial program seized tax refunds in an effort to recoup the funds.
The move to halt the program came after many of the recipients and members of Congress complained to the federal agency.
Democratic Sens. Barbara Boxer of California and Barbara Mikulski of Maryland said in a letter to Colvin, “While this policy of seizing tax refunds to repay decades-old Social Security overpayments might be allowed under the law, it is entirely unjust,”
After Colvin’s announcement, Boxer said in a statement: “I am grateful that the Social Security Administration has chosen not to penalize innocent Americans while the agency determines a fair path forward on how to handle past errors.”
Mikulski added, “On the eve of Tax Day, families preparing their budgets across Maryland and our nation are counting on refunds they are owed. Garnishing these refunds to collect overpayments incurred through no fault of their own and based on decades-old errors is a policy that must not continue.”
The Social Security Administration says it has identified about 400,000 people with old debts. They owe a total of $714 million. So far, the agency says it has collected $55 million.
The program was authorized by a 2008 change in the law that allows Social Security and other federal agencies to use a Treasury program to seize federal payments to recoup debts that are more than 10 years old. Previously, there was a 10-year limit on using the program.
In most cases, the seizures are tax refunds.
Colvin said she was suspending the program “pending a thorough review of our responsibility and discretion under the current law to refer debt to the Treasury Department.”
“If any Social Security or Supplemental Security Income beneficiary believes they have been incorrectly assessed with an overpayment under this program, I encourage them to request an explanation or seek options to resolve the overpayment,” Colvin said. The Arizona case referred to above was told she had missed the period for appeal.
The Washington Post reported on the program:
• There are several scenarios in which people may have received overpayments as children. For example, when a parent of a minor child dies, the child may be eligible for survivor’s benefits, which are typically sent to the surviving parent or guardian.
• If there was an overpayment made on behalf of the child, that child could be held liable years later, as an adult.
Also, if a child is disabled, he or she may receive overpayments. Those overpayments would typically be taken out of current payments, once they are discovered. But if disability payments were discontinued because the child’s condition improved, Social Security could try to recoup the overpayments years later.
“We want to assure the public that we do not seek restitution through tax refund offset in cases when the debt in question was established prior to the debtor turning 18 years of age,” Social Security spokesman Mark Hinkle said in an email. “Also, we do not use tax refund offset to collect the debt of a person’s relative — we only use it to collect the overpaid benefits the person received for himself or herself.”
Hinkle said the debt collection could be waived if the person is without fault and repayment would “deprive the person of income needed for ordinary living expenses or would be unfair for another reason.” This has not been the case for the person mentioned earlier in this article.