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Social Security Overpayments

Unfortunately, there is a group of people in Washington who want to radically alter or eliminate the Social Security Disability and Supplemental Security Income (SSI) programs.  One of them, Senator Orin Hatch of Utah, was in the news recently citing an in-house study on overpayments to recipients of these programs and suggesting that Social Security programs were in trouble because of the overpayments.  He further argues that Social Security is going to go broke unless benefits are cut.  This just isn’t true.

We have hundreds of payment letters come through our office each year.  We carefully examine each to determine whether our clients are being paid properly.  We find errors frequently, but we find underpayments as often as we find overpayments. I suspect that a similar study following underpayments would find a surprisingly large number of people are underpaid.  This would have to be included any real calculation of the cost of errors in Social Security.

Many problems regarding overpayments result from status changes of Supplemental Security Income (SSI) recipients.  When a recipient gets married, divorced or is widowed — or if she inherits a piece of property — she is supposed to let the Social Security Administration know.  However, frequently people do not understand this obligation.  A substantial percentage of people receiving these benefits are intellectually challenged and/or suffer from mental illness.  If they are not, they are frequently poorly educated.

 Our local Social Security offices in Hannibal and Quincy take their obligations seriously and try to address problems that arise.  They are required to be aggressive in collecting money that has been overpaid.  They are, however, understaffed and have a lot of work to do.   I am not surprised that one man of the 1532 people in the study was a crook.  More than ninety-nine.nine percent of Social Security Disability and SSI benefits are honest people.

There is a very simple fix for funding the Social Security Disability Insurance program. Congress can raise or eliminate the cap on maximum taxable earnings.  Right now, people who earn more than $118,000 per year pay nothing into Social Security on the amount they earn over that amount.  This results in a person earning a modest income of twenty thousand dollars a year paying a far higher percentage of his income into the system than a millionaire or billionaire.  This is not fair. Income from capital gains such as selling property or stocks and bonds are not subject to the tax.  They could and should be included.  You judge a society on how it treats the sick, poor, hungry, and those with limited abilities. Our Social Security system is an important part of our nation’s commitment to decency.

Nation Association of Consumer Bankruptcy Attorneys
The Missoui Bar
Illinois State Bar Association