Social Security chief vows 'top-to-bottom' review of $21.6B in payment clawbacks

The head of the Social Security Administration said Wednesday the agency has been sending about 1 million people a year notices that they were paid benefits to which they were not entitled, and she said she has ordered a “top-to-bottom, comprehensive review” of how the agency deals with such overpayments.

Kilolo Kijakazi, the acting commissioner, testified at a congressional hearing at which House members faulted the agency for issuing billions of dollars of payments in error and then, often much later, demanding that beneficiaries pay the money back.

“Ordinary citizens are being punished for a government failure,” said Rep. Greg Steube (R-Fla.), citing a recent investigation by KFF Health News and Cox Media Group.

Many of the people facing clawbacks are poor and disabled.

“Imagine living paycheck to paycheck with no savings as a result of an injury preventing you from working again and receiving a message from the federal government saying you owe them tens of thousands of dollars because of the government’s mistake, not your mistake,” Steube said.

Kijakazi said Social Security employees “work assiduously to pay the right person the right amount at the right time.”

Asked who at the agency was being held accountable for overpayment mistakes by the agency, Kijakazi said, “We are holding ourselves accountable.”

The agency had previously declined to say how many people were affected by overpayments.

At the hearing, in response to a question from Rep. Mike Carey (R-Ohio), Kijakazi said 1,028,389 people were sent overpayment notices in the 2022 fiscal year and 986,912 in fiscal 2023.

“Seems like an awful lot,” Carey said, adding that it helps explain why congressional offices are getting inundated with calls from constituents asking for help with overpayments.

The hearing by the Social Security Subcommittee of the House Ways and Means Committee was held in the wake of joint investigative reports by CMG and KFF Health News spotlighting the trauma many poor, disabled, and retired people experience when the government demands they repay benefits they have long since spent.

In many cases, years pass before the Social Security Administration determines someone has been overpaid and tries to recoup the money. In the meantime, the amount involved can balloon into tens of thousands of dollars or more.

The agency announced this month it was appointing a team to review its handling of overpayments.

At the hearing, Kijakazi said the review would examine causes of overpayments, the notices it sends beneficiaries — which have been criticized as both confusing and missing important information — and how to make the process more efficient.

Kijakazi said the agency recently simplified the form beneficiaries must complete to ask that an overpayment demand be waived.

The chair of the subcommittee, Rep. Drew Ferguson (R-Ga.), said the new form is “still really complicated, and we’re putting a tremendous burden on the beneficiary.”

Kijakazi and Democrats on the panel said the agency needs more funding to do a better job and accused Republicans of trying to underfund it.

Rep. Linda Sanchez (D-Calif.) said “years of underfunding has severely eroded the Social Security Administration’s customer service.”

Rep. Bill Pascrell (D-N.J.) called the hearing a “smokescreen.”

“It serves as a cover-up for an extremist agenda to gut Social Security,” Pascrell said.

Related: ‘The government’s got to fix this’: Social Security’s $20B overpayment problem

Republicans argued that the agency has been too slow to automate its work, such as collecting information on how much beneficiaries are paid or whether they receive workers’ compensation. Both can affect benefits administered by the Social Security Administration.

Kijakazi was asked when certain automation projects would be completed but did not say. She said she would follow up.

The agency estimated that, in the 2021 fiscal year, it overpaid people by $6 billion and underpaid people by $1.4 billion, according to a November report by the agency’s inspector general.

The agency ended the 2022 fiscal year with a cumulative total of $21.6 billion in overpayments uncollected, the report said.

At the hearing, lawmakers noted that beneficiaries are also harmed by underpayments.

For instance, a September report by the agency’s inspector general estimated that the agency did not issue timely payments totaling about $308 million to adults responsible for managing the benefits of about 50,000 children.

For more than 20 years, the agency’s inspector general, an internal watchdog, “has identified improper payments as a major management challenge,” said Tonya Eickman, an official in the IG’s office.

Overpayments can result when beneficiaries don’t keep the agency updated on their financial information, such as how much they are earning, how much support they get from others in the form of food and housing, and the value of their assets.

But many overpayments are caused by mistakes on the part of the Social Security Administration, the agency has reported.

After the CMG-KFF Health News investigation, Rep. Marc Molinaro (R-N.Y.) said the agency should “immediately stop seeking back overpayments.”

Sen. Sherrod Brown (D-Ohio), chair of a Senate panel that oversees Social Security, called on the agency to stop penalizing people who have been overpaid for years.

The Social Security Administration has wide latitude to waive overpayments or allow people to repay in installments. It also has an obligation not to waste taxpayer money and to recover payments to which people weren’t entitled.

The witnesses invited to testify at today’s hearing didn’t include anyone personally affected by an overpayment notice.

However, in interviews with KFF Health News and CMG, people have said the experience can be devastating. They have also said trying to work with the agency to resolve problems can be exasperating. They have said it can be hard to get through by phone and that the agency loses material they submit and have described getting different answers from different people.

Justina Worrell, who has a heart condition, an intellectual disability, and cerebral palsy, received a notice that she was overpaid more than $60,000. Worrell, who works part-time as a kitchen helper in a nursing home, has no way of repaying that amount, her aunt and caregiver Addie Arnold said.

Matt Cooper, who was shot in the face while working as a police officer, was called upon to repay $30,000. In the meantime, the government reduced his children’s benefits. Cooper’s wife, Kristen, said the agency failed to correctly account for his workers’ compensation.

Julia Greune, who is blind and has cerebral palsy, was called on to repay more than $6,000. Her father, Dave Greune, said that was because the Social Security Administration improperly counted the $3,200 in COVID relief payments the government automatically deposited in her bank account toward the $2,000 asset limit for people receiving Supplemental Security Income benefits.

Though Dave Greune has appealed, the agency cut off Julia’s monthly benefits, he said.

Like other people who say they were sandbagged by COVID stimulus payments, the Greunes’ problem was that, instead of immediately spending the money, they saved it — in Julia’s case, to buy a wheelchair.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.