Social Security is meant to offer financial stability for Americans in retirement or during tough times, but what if the system that's supposed to protect us actually causes harm?

According to a leading economist, that's exactly what's happening. They've accused the Social Security Administration (SSA) of misleading practices that have left some vulnerable people in financial ruin.

The GrayVine is here to unravel the tangled web of Social Security's overpayment debacle and offer guidance on how you can safeguard your hard-earned benefits.

The Shocking Case of a $304,000 Clawback
Imagine dedicating your life to work, only to have your safety net yanked away when you need it most.

This nightmare scenario became a harsh reality for one woman, who, after a debilitating industrial accident left her paralyzed, was pursued by the SSA for a staggering $304,000 in alleged overpayments.

The woman, who had responsibly inquired about earning potential while on disability, was initially told her income from writing children's books and speaking engagements was permissible.

Yet, a decade later, the SSA demanded repayment, leaving her financially crippled.

Leading economist Larry Kotlikoff has criticized the Social Security Administration for clawing back overpayments from vulnerable individuals. Image source: Pexels.

The economist raising the alarm is none other than Larry Kotlikoff, a respected Professor of Economics at Boston University and a Fellow of the American Academy of Arts and Sciences. Kotlikoff, who has penned a book titled “Social Security Horror Stories,” has witnessed firsthand the devastating impact of the SSA's aggressive clawback policies.

He contends that the agency's actions are not only unjust but also indicative of a systemic shift from benevolence to malevolence.

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The Overpayment Crisis: A Growing Concern​

Overpayments by the SSA can occur due to various factors, including agency errors, beneficiary misunderstandings, and failures to accurately record earned income. These mistakes can lead to the retroactive cessation of benefits, often years after the fact.

According to an SSA Inspector General report, nearly $72 billion in improper payments were made between 2015 and 2022. With the agency issuing around one million overpayment notices annually, the financial and emotional toll on recipients is mounting.

The SSA's defense? Less than 1% of all payments are overpayments.

However, this statistic offers little comfort to those who find themselves in the crosshairs of a clawback.

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The Future of Social Security: A Balancing Act​

The SSA's financial sustainability is also under scrutiny.

With the Social Security Board of Trustees projecting the program to deplete its funds by 2035, the aging population and shrinking payroll tax base pose significant challenges.

Without intervention, beneficiaries could face reduced payments, receiving only 83% of their full benefits.

Amidst these concerns, the Biden Administration appointed former Baltimore Mayor Martin O'Malley as the new Social Security Commissioner, tasking him with addressing overpayments, processing delays, and customer service complaints.

Protecting Your Social Security: Steps to Take​

In light of these revelations, it's crucial to be proactive in protecting your Social Security benefits. Here are some steps you can take:

1. Stay Informed: Keep abreast of changes in Social Security policies and understand how they may affect you.

2. Keep Records: Document all communications with the SSA, including inquiries about income while on disability benefits.

3. Seek Expert Advice: If you receive an overpayment notice, consult with a Social Security expert or attorney who can help you navigate the appeals process.

4. Advocate for Transparency: Support efforts to simplify the Social Security system and make it more user-friendly for beneficiaries.

Key Takeaways

• Leading economist Larry Kotlikoff has criticized the Social Security Administration for clawing back overpayments from vulnerable individuals, stating the practice is putting people on the streets.
• A report from the SSA Inspector General highlighted nearly $72 billion in improper payments between 2015 and 2022, yet overpayments account for less than 1% of all payments.
• There is increasing concern about the financial sustainability of the Social Security program, which is projected to run out of money in 2035, potentially leading to retirees receiving only 83% of their full benefits.
• Kotlikoff is calling for the government to reconsider its collection methods in light of equity and good conscience, while others highlight the need for transparency and simplification of the system to help recipients understand the rules.

Have you or someone you know been affected by Social Security overpayments? Do you have tips for dealing with the SSA or stories of navigating the system? Share your experiences and advice in the comments below.

 

[jeannemariamlady]

Yes the SSA makes people homeless, they are taking $100 a month from me, I only get 940 a month and I can't make it on that now it's less, this is how the SSA makes people homeless

 

[Rifca]

My response of overpayment
was that I could not afford the monthly amount to be taken from my check. I suggested a very minimal amount, less than $50.00 per month, the amount was accepted. I believe the total amount will never be reached before I pass. Perhaps because my request for a copy of the proof of overpayment was never supplied? My income and the state of Massachusetts could not provide for an attorney.