We all love receiving money, but what happens when we have to give that money back? That’s what’s happening with the Social Security Administration in the United States, which is breaking a promise it made some time ago by placing sanctions on elderly people who received excessive benefits during previous years. It wasn’t their fault, of course, but they will be the ones paying the price.
We’ll tell you everything that’s happening and why this measure has been reactivated even though it was cancelled some time ago.
Our seniors: without income
The SSA has cornered one of the most vulnerable sectors of the population, and through no fault of their own!
Apparently, a few years ago, under the Biden Administration, the so-called “overpayments” were made to some Social Security beneficiaries, meaning many people received extra money that didn’t belong to them.
At first, they began to charge 10% of the incorrect payments from each monthly benefit (and not 100% as had been done in previous times).
Plot twist
That’s right, the Trump Administration has wanted to quickly reverse this, and on March 7 announced that they would reinstate the 100% withholding rate, leaving many beneficiaries without breathing room, since this only means that people who received these overpayments will pay them back in full and in a single payment.
One fact you need to know is that it will apply to overpayments made after March 27, and that previous payments may not be affected, although some users will see 100% of their monthly pension withheld until that “debt” is repaid.
A call to responsibility
Lee Dudek, from the acting Social Security Commissioner, specified that it is very important to properly manage the American people’s trust funds, and therefore reviewing overpayment refund and withholding policies is vital to protect taxpayer funds.
And although technically it’s a “correction,” in many cases the error came from the SSA itself, which didn’t update data or applied its own rules incorrectly. Even so, those affected will have to assume responsibility and will see their payments reduced or frozen until they pay it back.
Where did this mistake come from?
Back in 2024, several beneficiaries spoke out for the first time about these errors, including a woman who revealed she received a $62,000 bill for survivor benefits she received after her father’s death when she was a child. No one ever told her she would have to pay that money back. Until now. Can you imagine the shock when that notice arrived for that poor woman?
Another heartbreaking case is that of a veteran with bipolar disorder who received a notice to repay $67,000. Three years earlier, the SSA told him everything was in order. But now, under the new rules, he has to reimburse the full amount.
Why is this happening?
The SSA explains that the errors are mainly due to two reasons: beneficiaries not reporting certain changes (like income), or SSA employees failing to update the information on time. But in a system with so many pages of regulations, many beneficiaries didn’t even know they had been overpaid.
A $72 billion error
According to government data, between 2015 and 2022, the SSA issued $72 billion in improper payments!!! By the end of 2023, the unpaid debt from these errors exceeded $23 billion.
While the new policy is expected to recover more money, experts warn that this could create serious financial crises for thousands of retirees who probably didn’t know they had to repay that money, or who might not even have it anymore.
Controversy over the imposed measure
It’s clear that this topic was going to stir up controversy, and that’s what has happened in Congress, where an Arizona Democrat, Rubén Gallego, introduced legislation that would try to stop the SSA from recovering overpayments from decades ago, stating that seniors shouldn’t have to pay for mistakes the government made, especially if they happened decades ago. Gallego appealed to common sense and empathy.
What can you do if you receive a notice?
The SSA allows you to request a waiver of payment if you can prove it wasn’t your fault or that you can’t afford to repay it. While your case is under review, you are not obligated to pay… Good luck
