After Overpaying Billions, Social Security Demands Money Back, Much of it from Disabled People

Hundreds of thousands of Americans who have disabilities have been shocked in recent months by letters from the Social Security Administration (SSA) demanding the return of money they were paid in error.

According to a report by the SSA’s inspector general, the agency clawed back $4.7 billion of Social Security Disability overpayments in the last fiscal year, but a whopping $21.6 billion still remains outstanding, and the agency wants that money back.

The burden of these repayment demands has disproportionately fallen into the laps of those who receive disability benefits through Supplemental Security Income (SSI)—a program designed to help the aged, blind, and people with disabilities who have little or no income.

The SSI program has stringent eligibility requirements and limits on assets and income. Many of those who were overpaid ran afoul of these limits, and because the rules are complicated and hard to follow, in most cases recipients had no idea that their payments were wrong.

The situation gets worse because by the time the agency catches a mistake, years can pass. In the meantime, disability beneficiaries are likely to have spent the money, and the amount owed can balloon to burdensome proportions.

The SSA says the delay in identifying disability benefit overpayments happens because they don’t have enough staff to keep up with the workload, much of which is done by hand.

In some cases, the overpayments were mistakes made by the government, but the SSA wants the money back anyway.

This issue received national media attention on CBS’ 60 Minutes. In a statement, an SSA spokesperson said the agency is required by law to collect on overpayments. “While staffing losses and resource constraints have challenged our service delivery, our payment accuracy rates remain very high,” the statement says.

It is worthwhile to note that the maximum SSI benefit in 2023 is a paltry $914 per month for an individual, which is about 25% below the current federal poverty level.

The finances of SSI beneficiaries are subject to intense scrutiny by the government, including a requirement to give the government permission to monitor their bank accounts.

To be eligible for SSI, individuals must have $2,000 or less in savings and other countable resources which can be converted to cash. The resource limit is $3,000 for couples.

Had the asset limits been adjusted for inflation since 1972, when the program was created, the caps would be almost five times higher than they are today, according to a July 2023 report by researchers at the Center on Budget and Policy Priorities.

The Chicago Social Security Disability lawyers at Nash Disability Law strongly advocate for increasing SSI asset and income limits.