Social Security Faces New Pressure After Seniors Get Shocking Bills

The Social Security Administration is facing increased pressure to fix its overpayment problem as millions of seniors find themselves with high bills due to the organization's mistakes.

Several lawmakers came together to urge the SSA to fix the system, which often leads to seniors getting hit with tens or hundreds of thousands of dollars in debt. Senators Gary Peters and Debbie Stabenow (Michigan) wrote in a letter that the overpayment issues are causing significant hardship for seniors who are unsure how they will ever pay the bills back.

"We have heard from numerous Michiganders regarding the impact unexpected overpayments that were sent by the SSA have caused on some of the most vulnerable beneficiaries of Social Security, who often include the elderly, disabled, retirees, and many who struggle to get by on limited income and resources," the letter reads.

In their letter, Peters and Stabenow requested the SSA look to solve the overpayment problems and find a strategy to prevent such errors in the future.

"Overpayments can pose incredibly difficult hardships on beneficiaries who've committed no wrongdoing and are now responsible for repaying improper payments," the senators wrote. "Because of their devastating impact, it is critical for the agency to improve its processes and controls to reduce the number of overpayments for beneficiaries who rely on these critical benefits."

Seniors, as well as those with disabilities and people living on fixed incomes, have reported anywhere from $37,000 to $100,000 and more in overpaid payments, 13 On Your Side reported. And once the SSA realizes its mistake, the seniors who were mistakenly overpaid are suddenly on the line to pay the checks back or end their benefits altogether until the amount makes up for the overpayments.

The SSA paid out more than $11 billion in Social Security overpayments in 2022, with the number of overpayment mistakes rising recently. More than 2 million Americans find themselves with an overpayment each year, according to 13 On Your Side.

Overpayments often happen over the span of several years, and by the time the mistake is revealed, it's accumulated to an amount that no recipient could feasibly repay.

"Each person's situation is unique, and the agency handles overpayments on a case-by-case basis," the SSA said in a statement last year. "In particular, if a person doesn't agree that they've been overpaid, or believes the amount is incorrect, they can appeal. If they believe they shouldn't have to pay the money back, they can request that the agency waive collection of the overpayment. There's no time limit for filing a waiver."

True Tamplin, the founder of Finance Strategists, said the senators' letter could put the pressure needed on the SSA for it to more adequately prevent further overpayment charges from coming to fruition.

"The letter from U.S. senators should definitely add pressure on the SSA to tackle the overpayment issue," Tamplin told Newsweek. "It shows that there's political will to address the problem and that it's on the radar of those who can push for changes."

Overpayments can happen for various reasons, whether it's that the SSA miscalculated your benefits or a recipient failed to promptly report an income or household change, according to Michael Ryan, a finance expert who found michaelryanmoney.com.

"If faced with an overpayment debt, the first step is not to panic," Ryan told Newsweek. "While the amounts can seem daunting, there are options to resolve the debt or establish affordable repayment plans."

Typically, SSA debts can be eliminated with a payment timeline based on your financial situation, he added. In some cases, the SSA will waive your debt if you were not at fault and the repayment would cause hardship.

"Submitting debt waiver requests quickly is critical," Ryan said.

The last option for those unable to manage their SSA debts is bankruptcy, but Ryan said there are ways to avoid your situation getting to that point.

"The best way to avoid SSA overpayments is through monitoring of your status as a beneficiary," Ryan said.

By reviewing your earnings records yearly for accuracy and immediately reporting any changes in dependents or income, you often are able to prevent any overpayment issue.