The Social Security Administration is running on fumes after overpaying billions of dollars in the last few years. Their solution to the problem has senior citizens worried about losing their shirts. Here’s what’s happening.
Social Security Overpaid Billions
An investigation by Boston 25 News and several sister stations around the nation has revealed that the Social Security Administration (SSA) has overpaid about $21 billion in recent years.
Or, at least, that’s the amount of money that SSA says it needs to recoup.
In a statement issued to Boston 25, the SSA said that their payment accuracy is very high but that the amount of money involved in their operation can turn even small errors into a big deal.
In 2021, for example, the SSA says they paid out over $1 trillion in benefits. Their overpayment rate was less than half a percent, or in the neighborhood of $5 billion.
Repay $121,000 in 30 Days.
SSA goes on to say that not only do they need that money to operate, they are required by law to fix the overpayments.
But no one should worry because SSA has a solid plan for how to rebalance their books.
A woman named Lori from central Florida recently got an up-close look at that plan when she got a letter in the mail from SSA.
As Lori told Florida News WFTV, she opened the letter to find a demand from the SSA that she repay $121,000 in money that they had overpaid her.
The letter said Lori had to pay the debt in full within 30 days.
That was devastating news to the woman who has been collecting $900 per month in disability benefits since 2001.
The SSA says Lori didn’t report worker’s compensation benefits she was also receiving. Yahoo! Finance says she did disclose that income, but that SSA didn’t get in their system, somehow.
Lori’s case is far from unique, and the SSA says that most of the overpayments they’re trying to recoup stem from overpayments in Supplemental Security Income (SSI).
Those overpayments usually happen when, like Lori, recipients make too much money from other sources. Or when the SSA flat-out makes a mistake.
What Happens if They Can’t Pay?
It doesn’t matter which category the overpayment falls into when it comes to SSA and their demand letters, though. Their mistake or not, the payees are on the hook.
And many times, those heavy-handed letters land in the mailbox of 65-plus retirees who have medical conditions that won’t allow them to work.
Already on a low, fixed income and struggling with poor health, these people now have the added stress of wondering what happens when they can’t pay their SSA “bill” on time.
For their part, SSA says that the letters they send are very forthcoming about the situation and also make it clear that the recipient has options.
Collection Regardless of the Consequence
They can appeal the overpayment, for one thing. Or they can set up a repayment plan, which SSA says can amount to as little as $10 per month.
Even so, the letters are raising alarm bells among senior citizens across the United States and adding stress to what, for many, is already a day-to-day struggle.
And, thanks to the sudden financial burden, many fixed incomes are now even lower than ever as SSA takes its cut before sending out monthly benefits.
It seems Social Security is dead-set on collecting what it’s owed; consequences be darned.
Featured Image Credit: Shutterstock / Evgenia Parajanian