Social Security Administration Examines Debt Collection Program and Halts Tax Refund Seizure
The Social Security Administration has suspended a program created in 2008 to collect overpayment debts, most often by seizing tax refunds.
Acting Social Security Commissioner Carolyn W. Colvin said on Monday, April 14th, that she would immediately halt the program while the agency does a review. She made the decision based on reports that people were being forced to repay debts, often with their tax refunds, which in some cases were paid to their parents or guardians when they were children.
“While this policy of seizing tax refunds to repay decades-old Social Security overpayments might be allowed under the law, it is entirely unjust,” Democratic Sens. Senators Barbara Boxer of California and Barbara Mikulski of Maryland said in a letter to Colvin.
“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,” Boxer added.
Under the program, the Social Security Administration identified 400,000 people with overpayment debts to Social Security Disability or Supplemental Insurance. The debtors reportedly owe $714 million, and the Social Security Administration has collected $55 million so far.
The program, authorized in 2008, allows the Social Security Administration to collect debts that are over 10 years old, while previously the agency could not collect debts beyond 10 years. The SSA can authorize the Treasury program to use federal tax refunds to collect those debts.
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.
There are several scenarios in which a person can receive overpayments through the Social Security Administration as a child. For example, when a child dies, the parent or guardian can apply for survivor’s benefits through the SSA. If a child is disabled, the Social Security Disability Program can overpay, but the grown child can currently be held liable years later, especially if the child’s condition improves.
“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.”
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