Social Security Stops Collecting Decade Old Debts

Photo Credit: www.morguefile.com

Photo Credit: www.morguefile.com

The Social Security Administration had been participating in a program in which thousands of people were having their tax refunds seized to repay overpayments that happened more than a decade ago. Some people have had their refunds seized in order to recoup overpayments made by their parents when they were minors.

The program was authorized by a 2008 change in the law that allows Social Security and other federal agencies, through the Treasury, to seize federal payments to repay debts that are more than 10 years old. Previously, there was a 10-year limit on using the program.

The Social Security Administration claims it has identified about 400,000 people with old debts totaling to a grand total of $714 million. So far, the agency says it has collected $55 million. In most cases, the seizures are tax refunds.

On Monday, Acting Social Security Commissioner Carolyn W. Colvin said she was suspending the program while the agency conducts a review.

“I have directed an immediate halt to further referrals under the Treasury Offset Program to recover debts owed to the agency that are 10 years old and older pending a thorough review of our responsibility and discretion under the current law,” Carolyn Colvin said.

Democratic Senators Barbara Boxer of California and Barbara Mikulski of Maryland complained about the program in a letter to Colvin. “While this policy of seizing tax refunds to repay decades-old Social Security overpayments might be allowed under the law, it is entirely unjust,” the senators wrote.

Social Security recipients and members of Congress complained that people were being forced to repay overpayments that were sometimes paid to their parents or guardians when they were children.

“If any Social Security or Supplemental Security Income beneficiary believes they have been incorrectly assessed with an overpayment under this program, I encourage them to request an explanation or seek options to resolve the overpayment,” Colvin said in a statement.

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