HomeFinance NewsPersonal financeSocial Security Savior Unveils Plan to Banish Overpayment 'Clawbacks'

Social Security Savior Unveils Plan to Banish Overpayment ‘Clawbacks’


Social Security commissioner vows to end ‘clawback cruelty’ with new plan for benefit overpayments


New Social Security Commissioner Martin O’Malley has unveiled a four-part plan to address overpayment issues that have resulted in some beneficiaries receiving unexpected demands for repayment, sometimes reaching tens of thousands of dollars.

The plan is intended to address concerns that the agency’s current policies of intercepting 100% of benefits and shifting the burden of proof to the beneficiary have caused financial hardship and stress.

Starting March 25th, the agency will reduce the default withholding rate to a “more reasonable” 10%.

This means that smaller portions of monthly benefits will be withheld for repayment.

Additionally, the onus will be shifted to the agency to demonstrate that the overpayment was the beneficiary’s fault.

This removes the unfair burden of proof from individuals who may not have been responsible for the error.

The maximum time frame for beneficiaries to establish repayment plans has been extended from 36 months to 60 months, providing greater flexibility in managing repayment obligations.

Finally, the process for requesting waivers from repayment has been simplified, allowing beneficiaries who are not at fault or lack the means to repay to avoid financial hardship.

O’Malley emphasized that these changes aim to create a fairer and more compassionate approach to overpayment issues.

He also acknowledged the need for additional funding and support to improve the overall customer service provided by the agency.

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    ““We are no longer going to have that clawback cruelty of intercepting 100% of a payment if people do not respond to our notice,” O’Malley told the Senate Committee on Aging on Wednesday.”


    “Some beneficiaries have received notices demanding repayment of benefits, sometimes for sums totaling tens of thousands of dollars.”

    “One overpayment notice for $58,000 was recently sent to a Savannah, Georgia, resident “through no fault of her own,” Sen. Raphael Warnock, D-Georgia, noted during the hearing.”

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