Federal Manager's Daily Report

The SSA likely will never fully recover nearly $1 billion in overpayments to beneficiaries because it has allowed overly long repayment schedules, an IG report has said.

When overpayments are found, the report said, SSA can enter agreements that provide for monthly installment payments. SSA’s general policy is to recoup any excess within 36 months, although its employees have discretion to approve longer periods. The IG sampled nearly 65,000 such agreements and estimated that 11 percent of beneficiaries will not pay back what they owe due to the length of the period the agency agreed to–an average of 55 years for them.

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It cited one beneficiary with an overpayment of $164,000 whose reimbursement agreement calls for paying off only $20 a month–a 684-year repayment period. Although agreements exceeding 36 months are supposed to be based on a determination of the beneficiary’s financial ability to pay, in this case the beneficiary had an income of nearly $8,000 a month, it added.

In another case, the agreement called for repaying only $1 a month, giving the beneficiary–who is receiving about $750 a month from SSA–1,281 years to pay off an overpayment of $15,000.

Based on the total number of outstanding overpayments across all SSA benefits programs, the IG estimated that nearly $1 billion of the $2.2 billion owed by beneficiaries will never be repaid.

In response, SSA said it is pursuing, either through law or regulation, increasing the minimum collection to 10 percent of the continuing benefit per month and said that it will review its policies “to determine where there may be opportunities to reduce long-term repayment agreements.” The SSA does have authority to collect after a beneficiary’s death under certain circumstances, although the report did not address how extensively that authority is used.