Social Security benefit recipients need to be aware of the “power” the Social Security Administration (SSA) wields to claw back overpaid benefits, experts warn.
The SSA’s recent efforts to recoup overpayments have been under scrutiny, highlighting the substantial impact on many who receive retirement, disability, and survivor benefits.
Numerous claimants have found themselves asked to repay thousands of dollars due to calculation errors. These mistakes can occur either from incorrect reporting by the recipient or errors made by the SSA itself.
Laurence Kotlikoff, a professor of economics at Boston University, and Terry Savage, an independent finance expert and author, have pointed out the government’s stringent interpretation of a specific clause in the Social Security Act concerning repayments for overpaid benefits.
According to Kotlikoff, a part of the Act stipulates that the agency should refrain from recovering an overpayment if it would be “against equity and good conscience.” This clause is meant to protect beneficiaries in certain situations from undue hardship.
Despite this provision, Kotlikoff and Savage warns that the SSA has significant discretion in enforcing this rule. Kotlikoff emphasizes that the SSA staff are often trained to “collect every penny you can, no matter what.”
These practices by the SSA can put a significant financial strain on recipients. Learn more about this economic warning here.
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