Benefit Bulletin: March 2015

Benefit Bulletin: March 2015

Social Security Demanding Repayment For (Very) Old Debts

If one of your parents died when you were a child, and the other was paid more in Social Security survivors than you were entitled to, should you be held responsible for the overpayment as an adult? Should the federal government be allowed an indefinite amount of time to collect? The Social Security Administration says yes it can, at least under current law.

Last year the Social Security Administration set off an uproar when it was learned that the agency was seizing tax refunds to recover overpayments that occurred decades ago. The Washington Post reported that, without notice, the federal government intercepted tax refunds, totaling almost $3,000, of 58-year-old, Mary Grice. Her father had died in 1960 and her mother received survivor benefits for Mary, age 4 at the time, and her four other siblings. Social Security Administrations officials told Grice that six people, Grice, her four siblings, and her father’s first wife, whom she never knew, had received benefits under her father’s account. “The government was not sure who got the overpayment, but the policy is to seek compensation from the oldest sibling and to work down through the family until the debt is paid,” The Washington Post reported.

A federal program that allows Social Security and other federal agencies to use the Federal Treasury to seize payments to recover debts that are more than 10 years old affects Grice. Recently the Social Security Administration said it would not seize tax refunds from those affected but also said the debts won’t go away. Eventually, when the debtors start benefits, Social Security will deduct debts from their benefits.

TSCL feels it’s outrageous to penalize people for mistakes made by the Social Security Administration, or members of their families who acted as representative payees for minor beneficiaries, that occurred more than 10 years ago. The same standard does not apply to other agencies, like Medicare. The federal government has only five years to recover non-fraudulent Medicare overpayments it makes to providers. TSCL supports legislation that would prevent the Social Security Administration from seizing an individual’s tax refunds to settle overpayments more than 10 years old.


Source: “Social Security, Treasury Target Taxpayers For Their Parents’ Decades Old Debts,” Marc Fisher, The Washington Post, April 10, 2014.   “Social Security Won’t Seize Tax Refunds To Collect Old Debts,” Stephen Ohlemacher, The Associated Press, January 12, 2015.