Social Security Clawback Promises: Bold Pledges, Lingering Problems You Need to Know About

In March, Social Security Commissioner Martin O’Malley vowed to address systemic injustices in the Social Security Administration’s (SSA) overpayment recovery process.

A Call for Change in Overpayment Recovery

Responding to a KFF Health News and Cox Media Group investigation, O’Malley acknowledged that aggressive efforts to claw back alleged overpayments had harmed millions of beneficiaries, including low-income individuals, the elderly, and disabled people.

O’Malley pledged to make significant changes, including ending the practice of withholding 100% of monthly benefits to recover overpayments. Advocacy groups, such as Justice in Aging, have called this change “life-changing.” The number of beneficiaries facing full withholding dropped from 46,000 in January to 7,000 by September. However, the SSA has yet to implement a key reform: shifting the burden of proof from beneficiaries to the agency in overpayment disputes.

Ongoing Challenges and Legislative Hurdles

One critical issue remains unresolved: the lack of a statute of limitations on recovering overpayments. Beneficiaries can be held accountable for errors made decades ago. For example, Barbara Hubbell’s mother was forced to repay $43,000 for an SSA error dating back 19 years, leaving her nearly destitute. O’Malley initially indicated that establishing a time limit could be done via regulation, but no action has been taken. SSA officials now say legislative action is the fastest solution.

Meanwhile, beneficiaries continue to struggle with SSA’s communication and customer service. Letters often contain errors or contradictory information, leaving recipients confused and overwhelmed. In one case, a beneficiary received a demand for $31,635 in overpayments, despite records showing payments totaling a fraction of that amount.

Steps Forward, But a Long Road Ahead

O’Malley’s reforms have made some progress. The agency reduced the number of beneficiaries facing more than 10% withholding by nearly 20% and improved call response times, cutting average wait times from 42 minutes to 11 minutes. However, issues persist. Beneficiaries report delays in resolving disputes and a lack of awareness about their right to request reduced withholding.

For beneficiaries like Lorraine Davis, a 72-year-old from Houston, the system’s shortcomings are devastating. Davis, who needs a kidney transplant, has been left without Social Security payments since June due to an alleged $13,538 overpayment. Despite repeatedly requesting reduced withholding, Davis has seen no resolution.

As O’Malley’s term nears its end, advocacy groups acknowledge his efforts but argue that more must be done to address systemic flaws. Shifting the burden of proof to the SSA and establishing a statute of limitations remain critical steps to prevent beneficiaries from bearing the brunt of administrative errors. While the SSA has made strides in addressing overpayment recovery, significant gaps remain. A combination of policy updates, regulatory action, and legislative support is needed to ensure fair treatment of beneficiaries and restore public trust in the agency’s processes.