Biden Pick to Lead Social Security Pledges Action on ‘Heartbreaking’ Clawbacks

President Joe Biden’s nominee to head the Social Security Administration on Thursday promised senators that he would address hardships the agency has caused by trying to recoup billions of dollars it mistakenly overpays beneficiaries each year.

At his confirmation hearing on Thursday, Democratic former Maryland Gov. Martin O’Malley said he would “absolutely prioritize” reducing overpayments and improving the appeals process for millions of people asked to repay money, often years later.

At least seven senators identified overpayments as a key concern during hours of questioning at Thursday’s hearing and asked O’Malley about how he would address the issue. Several committee members have cited joint investigations by KFF Health News and Cox Media Group television stations, which reported the scope of the overpayment problem; how retired, disabled, and low-income beneficiaries have been affected; and the broad range of issues that can cause overpayments.

“It’s been heartbreaking reading some of these stories” of people who face government collection efforts “through no fault of their own” and “without regard” for their circumstances, O’Malley said.

“I am deeply concerned about the burden placed on individuals when the Social Security Administration works to recoup payments that the agency made because of its own errors,” Sen. Maggie Hassan (D-N.H.) told O’Malley. “We have constituents who are reaching out all the time to share that they’re struggling to make ends meet because SSA has unexpectedly and drastically reduced their benefits.”

Beneficiaries routinely receive demands for repayment long after they have spent the money.

Many of the overpayments are the result of beneficiaries’ failure to comply with federal requirements. But others are the result of errors by the Social Security Administration. Complex, hard-to-follow rules contribute to the problem. And beneficiaries often struggle to respond to overpayment notices because they have trouble reaching Social Security employees by phone.

“We need to correct that,” said Sen. Bob Casey (D-Pa.), who raised the issue during the hearing.

O’Malley added that Social Security’s attempts to claw back overpayments that were the result of covid relief payments were “an outrage,” and he pledged to correct it.

The agency frequently overpays people for months or years before catching the mistake. By then the amount to repay can balloon into tens of thousands of dollars. To recoup alleged overpayments, the Social Security Administration often reduces or suspends beneficiaries’ monthly benefits.

“We have to do a better job of recognizing the justice at stake in each of these individual cases,” O’Malley said.

Finance Committee Chair Ron Wyden (D-Ore.) told of a severely disabled constituent who is unable to work, lives with her parents, and pays them half of her benefits from the Supplemental Security Income (SSI) program each month as rent. The constituent was recently notified that she owes the government more than $9,000, Wyden said, because she still received a rental subsidy from her parents.

Wyden said he and other senators have proposed legislation “to friggin’ simplify the program and reduce these overpayments.”

Under questioning by Sen. Sherrod Brown (D-Ohio), O’Malley agreed that limits on the amount of assets beneficiaries are allowed to hold are root causes of overpayments. The limits, which haven’t been increased for inflation since the 1980s, stand at $2,000 for individuals and $3,000 for couples.

“It’s a leading cause and it’s a huge administrative burden,” O’Malley said.

Legislation proposed by Brown and others to raise the asset limits “would absolutely not only be the right thing to do for the recipients, the right policy,” O’Malley said, “but would also reduce the huge administrative burden that Social Security has to go through.”

Samantha Manning of CMG’s Washington news bureau contributed to this report.

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