SSA Commissioner planning reforms to fix overpayments, poor customer service

The Social Security Administration’s new chief is promising to overhaul the agency’s system of clawing back billions of dollars it claims was wrongly sent to beneficiaries, saying it “just doesn’t seem right or fair.”

SSA Commissioner Martin O’Malley said that in the coming days he would propose changes to help people avoid crushing debts that have driven some into homelessness and caused financial hardships for the nation’s most vulnerable people who rely on monthly checks from the government safety net to survive.

O’Malley, who took office in December, spoke with KFF Health News by phone, and said that “addressing the injustice we do to too many Americans because of overpayments, the rather cruel-hearted and mindless way that we recover those overpayments,” is among his top priorities.

He said he has concrete steps in mind, such as shifting the burden of proof from beneficiaries to the agency, defaulting to reducing beneficiaries’ checks instead of stopping them completely, and limiting how far back the agency can go to identify overpayments and recoup debts. He did not disclose a specific number of years he plans on proposing.

“We do have the ability and we do have the authority to address many of these injustices,” he said, suggesting that the SSA won’t have to wait for congressional action.

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The pledge comes after our company-wide investigation in partnership with KFF Health News revealed that SSA routinely reduces or halts monthly benefit checks to reclaim billions of dollars in payments it sent to beneficiaries then later said they should not have received.

In some cases, years passed before the government discovered its mistake and then imposed debts that sometimes have reached tens of thousands of dollars on people who cannot afford to pay. KFF Health News and Cox Media Group discovered that more than 2 million people a year have been hit with overpayment demands.

The agency recovered $4.9 billion of overpayments during the 2023 fiscal year, with an additional $23 billion in overpayments still uncollected, according to its latest annual financial report. Nearly 74% of the money it recovered came from withholding all or part of people’s monthly checks.

O’Malley said the agency plans to cease efforts to claw back years-old overpayments and halt the practice of terminating benefits for disabled workers who don’t respond to overpayment notices because they did not receive them or couldn’t make sense of them.

“We’re not fulfilling congressional intent by putting seniors out of their homes and having them live under a bridge when they didn’t understand our notice,” O’Malley said.

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He wants to simplify the wording in the agency’s overpayment notices to make them easier for beneficiaries to understand. Internal agency records show only 12% of beneficiaries who received a notice last year took steps to challenge the overpayment.

“To be honest, a lot of problems [are caused by] our notices being hard to read,” O’Malley said. “In fact, one might argue that the only thing that’s really clear about the notice is to call the 800 number.”

O’Malley said fixing that hotline is also a top priority.

“When you call them, you’re on hold for hours and I don’t have hours to just stay on hold,” said Melissa Evans, a Social Security beneficiary.

AARP says issues with Social Security’s wait times and customer service are the number one complaint the organization hears from its members.

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“It’s really bad. The average wait time is about 35 minutes,” said Bill Sweeney, Senior Vice President of Government Affairs for AARP.

He says O’Malley has already met with the AARP leadership to hear their concerns.

“I think he’s doing all the right things that we would want a new commissioner to do in his first few days. And, and we’re really thrilled that he’s bringing this customer service focus to this agency that so badly needs it,” Sweeney said.

Sweeney says in addition to the agency making changes, Congress also needs to take action by making sure the Social Security Administration has enough funding.

“They have the lowest staffing levels now since 1972,” said Sweeney. “Their budget has gone down about 17 percent while the number of their customers has gone up by 22 percent… Congress is on the hook for this too, and they really do need to step up and provide the agency with the funding it needs.”

O’Malley did not offer a timeline for the proposed changes but says he does expect them to take effect this year. He is slated to testify before multiple congressional committees next week and will likely disclose more specifics about his plans.

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