Social Security Overpayment Problem Swells to $23 Billion

The Social Security Administration (SSA) released a report revealing its overpayment problem worsened in October, now standing at $23 billion.

The newly released Agency Financial Report showed that the SSA made $11.1 billion in overpayments — accidentally paying beneficiaries too much — and $2.5 billion in underpayments to beneficiaries in fiscal year 2022, up from $6 billion in overpayments and $1.4 billion in underpayments in fiscal year 2021, as noted in the SSA Inspector General (IG) report.

Overpayments typically occur from late work reports or changes that affect benefits, or when a beneficiary continues receiving payments during an appeal. However, they can also occur due to miscalculations by the SSA, according to a September 15 report by KFF Health News. For example, KFF cited $2 billion in overpayments that the SSA made in fiscal year 2022 that included $1.5 billion that was “within agency control.”

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“Even the slightest error in the overall payment process can result in millions of dollars in improper payments,” the SSA IG report said. “Once SSA determines it has overpaid an individual, it attempts to recover the overpayment.”

Despite efforts that yielded $4.9 billion in recovered overpayments during fiscal year 2023, the SSA’s uncollected overpayments balance grew from $21.6 billion at the start of the year to $23 billion at the close of the year.

The SSA will pay about $1.4 trillion in Social Security and Supplemental Security Income benefits to almost 67 million Americans in 2023.

Lawmakers take notice of Social Security overpayments problem

The issue of overpayments caught the eye of lawmakers earlier this year, with many calling for a halt to the collection efforts.

“The Social Security Administration screwed up, and now they’re demanding that seniors pay for the administration’s mistakes,” U.S. Representative Marc Molinaro (R-NY) said in a September 21 statement. “Most victims will have no way of ever paying Social Security back. The Social Security Administration needs to stop aggressive prosecutions of seniors and focus on fixing their systems.”

SSA did not immediately respond to Kiplinger's request for comment.

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