BARNSTABLE, MASS. (WHDH) - The American dream turned into a nightmare for Katalin Parkas.
It started when she received a letter from the Social Security Administration (SSA) that informed her they had overpaid her around $41,000 over the last five years.
“I was in shock. I was angry. I was like, this is not happening. How could this happen?” she said.
The letter demanded she pay back the $41,000 within 30 days or she’d be cut off from her monthly benefits.
This didn’t sit right with Parkas, who immigrated as a child from Hungary in search of a better life. She’s started a family and worked hard to earn her retirement on Cape Cod; now she fears that is in jeopardy.
“I lost so much sleep, it was awful. I felt terrible; physically and mentally. It takes a toil, it really does,” she said.
Parkas has received social security benefits since 2015. Her monthly checks increased after her husband passed away in 2018. Unknown to Parkas, SSA was supposed to reduce the benefits she received from her late husband because she also receives a government pension. The agency failed to make this reduction. This led to Parkas’ check to be around $700 higher a month.
She hired a lawyer and filed an appeal. Parkas said SSA told her that the mistake wasn’t her fault but that she is still responsible for paying the money back.
“I couldn’t believe it. I said, ‘I knew I wasn’t at fault. I hadn’t done anything wrong,’ and so I just found it so unjust; totally unjust,” she said.
The monthly checks are what she relies on to pay her mortgage. She isn’t sure what this income reduction will mean for her and her home.
“You have a fear of everything because of the cost of living today. We’re in a totally different time. The cost of living, the cost of maintaining my home, everything has just gone up tremendously, so it’s very scary,” Parkas said.
She isn’t alone. It’s estimated millions of Americans are impacted by these overpayments.
“It is so wrong. It is not the American way. It’s just not,” Parkas said. “It’s devastating. It’s devastating to people.”
Last year, SSA reported it needed to get back $23 billion dollars from overpayments.
“It’s outrageous that this is happening,” said Laurence Kotlikoff, a Boston University economics professor.
Kotlikoff has handled dozens of stories related to social security issues and wrote the book ‘Social Security Horror Stories.’
“This is a government agency financially abusing the American public day after day for decades,” Kotlikoff said.
He explained that often the mistakes are the government’s fault and impact some of the most vulnerable Americans. Kotlikoff has fought for changes on how this money is paid back for years.
At the end of 2023, the administration also received pressure from Congress to make changes.
“We have been deeply concerned by stories from our constituents and recent reports of the extreme financial hardship placed upon beneficiaries who are asked to quickly repay in full or whose payments are halted, reduced, or reclaimed as the agency attempts to correct improper payments, many of which occurred due to agency error,” wrote Senators Margaret Hassan and Billy Cassidy to SSA in November 2023.
This past March, SSA Commissioner Martin O’Malley also called out the agency’s process and decided to make changes.
“We overpay them and then claw back in a rather brutal way 100% of their check,” O’Malley told Congress during a hearing on March 20.
He drew attention to the underfunding of SSA and staff shortages that both contributed to delays in catching overpayments.
O’Malley also announced the agency would change how it collects overpayments. Those changes include reducing monthly benefits by people who were overpaid by 10% instead of 100%, extending the repayment time frame, and making it easier for individuals to request a waiver.
Kotlikoff applauded these changes but would like to see the agency go further and enact a statute of limitations on overpayments and review past clawback cases. He urges people to reach out to their Congressmen, file an appeal and a waiver.
While the recent changes may lessen the burden, Parkas still thinks the process is unfair.
“It’s not right that they can put the elderly in this position,” she said.
SSA declined to comment on Parkas’ case. The agency told 7 Investigates that it issues correct payments in most cases but does admit there is room to improve.
“We will continue examining programmatic policy and making regulatory and sub-regulatory changes to improve the overpayment process,” a spokesperson for SSA said in a written statement.
Expert recommend to avoid being impacted by overpayments you should verify the information that SSA has on record for you. You can also use an online program to estimate how much you should be getting from the government. If you have a government pension make sure the agency knows about it and if you spot a mistake anywhere let the agency know immediately.
“I don’t want to see anyone else go through this nightmare; it’s awful; puts your whole life in turmoil,” Parkas said.
She filed another appeal but SSA told her it would start reducing her benefits next month.
“I haven’t figured it all out yet and believe me I lose sleep over it every night and I know it has affected me physically, emotionally. It’s been a grueling year, it’s just not right,” she said.
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