Senators Convince Social Security to Stop Seizing Tax Refunds for Decades-old Overpayments
A pair of senators have called on the Social Security Administration to end the policy of seizing taxpayers’ refunds to hold them accountable for decades-old errors made by the agency that led to the overpayment of benefits, and the agency has agreed to do so.
Senators Barbara Boxer, D-Calif., and Barbara Mikulski, D-Md., highlighted a story on the front page of the Washington Post last Friday morning that detailed the case of Mary Grice, whose tax refund was seized by the U.S. government to repay an overpayment of benefits made to an unknown member of her family in 1977.
“While this policy of seizing tax refunds to repay decades-old Social Security overpayments might be allowed under the law, it is entirely unjust,” the senators wrote in a letter Friday to the Acting Commissioner of the Social Security Administration, Carolyn Colvin. “Grice and other families like hers are unfairly being held responsible for decades-old errors at the Social Security Administration – even though many of these taxpayers were children at the time the error was made. Too many of these families are now finding themselves trapped in a mess of paperwork and red tape that is both costly and time-consuming.”
These garnishments are possible because of a provision in the 2008 Farm Bill, which allowed the Social Security Administration to pursue claims owed to it for overpayments beyond what had previously been a ten-year statute of limitations. However, the law gives the Social Security Administration the discretion not to pursue repayment of the debt in cases where doing so would be “against equity and good conscience.”
“Garnishing taxpayers’ refunds to pay for debts that are more than a decade old – and incurred through no fault of their own – is a policy that cannot be continued in good conscience,” the senators wrote. “Therefore, we ask you to immediately use the discretion granted to the Social Security Administration under the law to waive recovery of overpayments more than ten years old if the beneficiary is not at fault.”
Senators Boxer and Mikulski also asked the agency to provide a summary of its efforts to recover overpayments that are more than a decade old, and to detail how many of the cases involve individuals who were minor children at the time the mistake was made.
On Monday, the Social Security Administration announced an immediate halt to the practice.
“I have directed an immediate halt to further referrals under the Treasury Offset Program to recover debts owed to the agency that are 10 years old and older pending a thorough review of our responsibility and discretion under the current law to refer debt to the Treasury Department,” said Colvin in a statement. “If any Social Security or Supplemental Security Income beneficiary believes they have been incorrectly assessed with an overpayment under this program, I encourage them to request an explanation or seek options to resolve the overpayment.”
Senator Charles Grassley, R-Iowa, had also sent letters to the Social Security Administration and the Treasury, asking about how they interpreted their authority to pursue old debts. He also welcomed the change in policy Monday.
“Payment beneficiaries have to be accountable for overpayments from the government, but the government has to be reasonable and use common sense,” he said in a statement. Is it fair and reasonable to pursue debts from the surviving children for payments to the parents, no matter how long ago any overpayment occurred? The agency is right to revisit that point. However, it shouldn’t take embarrassing media coverage and lawsuits for this step to take place. Agencies should be able to apply common sense and fairness without a public firestorm. And Congress needs to be careful about legislating one line in an unrelated bill that an agency then develops into something possibly beyond what Congress intended. The statute of limitations language didn’t give the agency permission to collect debts where the debtor is deceased. It’s not clear where that authority came in. There’s a difference between collecting decades-old debt from the debtors and decades-old debt from their kids. I still expect responses to my letters.”