What Social Security beneficiaries need to know about overpayment policies

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Social Security beneficiaries who borrow money from the Social Security Administration could see much lower default withholding rates from their monthly checks, thanks to new policies that are taking effect.

Through March 25, the Social Security Administration Will no longer collect 100% A total monthly Social Security benefit payment to compensate a beneficiary for money owed due to an overpayment of benefits.

Instead, the agency will collect 10% of the beneficiary’s gross monthly benefit or $10 – whichever is greater.

But there may be some time where beneficiaries are still affected by the old policy, the agency announced Friday.

If this happens, affected beneficiaries should call the Social Security Administration at 1-800-772-1213 To reduce their cash rates, the agency said.

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The new rules apply to overpayments, which begin when the amount of benefits owed is miscalculated and beneficiaries are sent checks for more than what they owe.

When this happens, the Social Security Administration is required by law to repay the excess money paid to beneficiaries. But it may not be obvious that overpayments have occurred over the years, sometimes resulting in thousands of dollars in overpayment notices.

In recent years, the problem of overpayments has gotten worse, said David Kemp, CEO of the National Organization of Social Security Claimants’ Representatives.

“There were always a lot of overpayments,” Kemp said, as the agency has struggled with limited or outdated resources over the years. “However over the past few years, it has remained stable, albeit shockingly high, the total number of overpaid individuals.”

Supplemental Security Income, or SSI, beneficiaries who face strict limits on their income and assets are particularly vulnerable to overpayment issues, Kemp said.

The Social Security Administration said it is working to reduce the burden on affected beneficiaries.

“We will no longer be cruel enough to withhold 100% of payments if people don’t respond to our notices,” Commissioner Martin O’Malley said during recent testimony before the Senate.

When the new repayment threshold applies to new overpayments, beneficiaries who currently have an overpayment withholding rate of more than 10% can contact the Social Security Administration to reduce it, the agency said.

All affected beneficiaries should call the agency about the 10% payment rate, but they need to approach the process with patience, Kemp said. The Social Security Administration doesn’t have enough staff to answer the high volume of calls, so beneficiaries should expect hold times, Kemp said, as well as processing times.

The Social Security Administration is also implementing other new policies to address overpayments, including removing the burden of proof from Social Security claimants when determining who is at fault for an error.

The maximum period for repayment plan is being increased from 36 months to 60 months. It will also be easier for the beneficiaries to request a waiver so that they do not have to repay the amount.

“Most claimants never request a waiver, although many of them may qualify,” Kemp said.

That’s especially true for beneficiaries who are struggling to meet their basic needs or who are at risk of being kicked out because they’re paying Social Security, he said.

“Claimants should know that if it’s not their fault and they can’t afford to pay, they can ask not to pay at all,” Kemp said.

To request a waiver, the beneficiary must be Fill out a form.

Since O’Malley was sworn in as commissioner in December, he has taken some “very aggressive steps” toward addressing issues of overpayments to beneficiaries, said Max Richman, president and CEO of the National Committee to Preserve Social Security and Medicare.

“They’re so reasonable, it makes you wonder why no one has done this before,” Richtman said, referring specifically to the end of the policy of withholding all monthly payments from a beneficiary until the entire overpaid amount is paid.

“It’s a huge burden on most beneficiaries who live on Social Security or have Social Security as the majority of their income,” Richman said.

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