Two months ago, I wrote a column telling the story of an older woman, a widow recovering from heart surgery, who was being harassed by the Social Security Administration demanding a “clawback” of more than $88,000 in benefits she had received over the years — all because the agency had made a mistake in calculating her benefits. Social Security threatened to stop paying future benefits until that huge amount was recouped!
Now, the eminent economist Laurence Kotlikoff, creator of the MaximizeMySocialSecurity.com calculator and co-author of the best-selling “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” and I have created the Social Security Horror Story project.
We have been swamped with similar stories, and are now soliciting more. (Read some on the link on my home page at TerrySavage.com.) It’s a big undertaking, given that the Social Security annual report lists some $8.6 billion in “receivables” it claims are owed by Social Security and disability beneficiaries.
Alone, people feel helpless. But some very powerful people have expressed an interest in helping us tell the story and resolve the problems. Many of these “clawbacks” involve miscalculations of public pension offsets (commonly known as WEP — the windfall elimination provision). Others demand repayment of SSDI (disability benefits) once people qualify for Medicare.
Some Social Security horror stories demand repayment of benefits given to young children of disability recipients. Read this horror story:
“I received a letter from Social Security back in 2019, when I was 20, saying that I owed them $12,163. And that I had 60 days to pay them, or else. I was a college student, working a retail job and living with family.
“Apparently, Social Security has a benefit for the children of disabled workers, which my mother was and my dad became. So, as their child, ‘I’ received a benefit for being their child, as they were disabled. Which they gave directly to my mother to spend. And which I was never informed of and knew nothing about. She did whatever paperwork to get the money, got the money put directly in her bank account, and got to spend it however she deemed appropriate. That’s how other government benefits involving children work.
“Makes sense, right? Well, Social Security doesn’t think so. Instead, they claim it was my benefit.
“See, it says it right there, in the 700-page policy handbook: It’s your benefit, your parent is just the representative payee. And we need a representative payee because, obviously, as a child, you can’t be expected to know anything about money.
“To anyone of sound mind, this logic is clearly contradictory, deeply immoral, and working against the goal of having these benefits exist in the first place. If you have to appoint a representative payee for someone because they don’t have the competence to be given the money directly, you cannot hold them responsible for paying any of it back if there’s an overpayment.”
And, yet, Social Security is still demanding repayment from this now 24-year-old young man!
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It’s difficult to prove the mistakes because there is no way to track the bad advice given to people who inquire about their benefits. Most lawyers won’t go up against the faceless Social Security system.
But we aren’t giving up. And if you have a Social Security horror story that you’d like to add to our collection, please send an email to Terry@TerrySavage.com (with SS Horror Story in the subject line) or post on my AskTerry blog at TerrySavage.com. Please include your full name, telephone number for contact, city of residence, and as detailed an explanation as you can provide, as well as permission to post your story using your first name and last initial. We are hoping the “weight of the evidence” will help us in our quest.
Our goal
We have a simple solution in mind: If Social Security doesn’t discover its own mistake within 18 months, Congress should direct them to eat the loss. Period. Demanding repayments as long as 20 years after the fact, when people are old and retired (or young and powerless), is horrifying.
Please help us by submitting your story. You’ll find a link to all of them at TerrySavage.com. Together we vow to try to fight the faceless Social Security bureaucracy. And that’s The Savage Truth.
(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)
