NCPSSM Letter Senate SSA Overpayment Policy Finance

Committee on Finance
United States Senate
Washington, D.C. 20510

Dear Chairman Crapo and Ranking Member Wyden,

On behalf of the millions of members and supporters of the National Committee to Preserve Social Security and Medicare, I am writing to urge you to intervene in reversing the Social Security Administration's recent decision to automatically withhold 100 percent of monthly benefits from Social Security recipients to recoup benefits they were overpaid through no fault of their own. Members of the National Committee come from all walks of life and every political persuasion. What unites them is their passion for protecting and strengthening Social Security, Medicare, Medicaid, and the other programs that are so vitally important to older Americans.

During hearings held last year by the Senate Finance Committee (3-20-24) on the Budget of the Social Security Administration, as well as by the Senate Budget Committee (9-11-24) and the Senate Aging Committee (3-20-24), the Senate explored the problem of overpayments by the Social Security Administration. Senators on these Committees expressed concern that at the time, the default policy of the Social Security Administration (SSA) was to reclaim up to 100 percent of a beneficiary's benefit when an overpayment was identified, even in cases where the overpayments were not the fault of the recipient.

Historically low staffing levels, which made it impossible for SSA to identify overpayments or to adjust benefit levels in a timely manner, were responsible for the vast majority of overpayments, a situation guaranteed to become worse as staffing levels are cut and field offices shuttered. Many Social Security beneficiaries live payment-to-payment, with few if any additional resources to draw on. For them, losing their entire Social Security benefit is an extreme hardship - and one only exacerbated by the fact that they followed all the rules and did everything required of them to notify SSA of changes in their financial situation.

Former SSA Commissioner Martin O'Malley responded to the Senate's concerns by revising the Agency's policy and establishing a default withholding rate for overpayments of ten percent of monthly benefits to ease the financial burden on beneficiaries.

Unfortunately, SSA recently reversed this policy. Effective March 27, 2025, the Agency will revert to an automatic withholding of 100 percent of the monthly payment of beneficiaries who have been overpaid. We must point out that these are not cases of fraud or deceit on the part of beneficiaries, but the result of Congress's chronic underfunding of this critical agency.

To help prevent the financial crisis that will affect your constituents who may be facing an overpayment recoupment, we urge you to intervene and prevent SSA from confiscating the entire benefit of innocent Americans who may be caught in this financial nightmare.

Sincerely,

Max Richtman
President and CEO