Social Security halts effort to collect old debts

FILE - In this May 31, 2013, file photo, acting Social Security Commissioner Carolyn W. Colvin, center, accompanied by Acting Labor Secretary Seth D. Harris, left, and Treasury Secretary Jacob Lew, speaks during a news conference about Social Security and Medicare in Washington. The Social Security Administration is suspending a program in which thousands of people were having their tax refunds seized to recoup overpayments that happened more than a decade ago. Colvin said Monday, April 14, 2014, she has directed an immediate halt to the program while the agency does a review. (AP Photo/Charles Dharapak, File)

FILE - In this May 31, 2013, file photo, acting Social Security Commissioner Carolyn W. Colvin, center, accompanied by Acting Labor Secretary Seth D. Harris, left, and Treasury Secretary Jacob Lew, speaks during a news conference about Social Security and Medicare in Washington. The Social Security Administration is suspending a program in which thousands of people were having their tax refunds seized to recoup overpayments that happened more than a decade ago. Colvin said Monday, April 14, 2014, she has directed an immediate halt to the program while the agency does a review. (AP Photo/Charles Dharapak, File)

WASHINGTON — The Social Security Administration is suspending a program in which thousands of people were having their tax refunds seized to recoup overpayments that happened more than a decade ago.

Acting Social Security Commissioner Carolyn W. Colvin said Monday she has directed an immediate halt to the program while the agency does a review.

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.

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

The Social Security Administration says it has identified about 400,000 people with old debts. They owe a total of $714 million. So far, the agency says it has collected $55 million.

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

In most cases, the seizures are tax refunds.

“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.

There are several scenarios in which people may have received overpayments as children. For example, when a parent of a minor child dies, the child may be eligible for survivor’s benefits, which are typically sent to the surviving parent or guardian. If there was an overpayment made on behalf of the child, that child could be held liable years later, as an adult. Also, if a child is disabled, he or she may receive overpayments. Those overpayments would typically be taken out of current payments, once they are discovered. But if disability payments were discontinued because the child’s condition improved, Social Security could try to recoup the overpayments years later.

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