The Social Security Administration announced Monday the suspension of a program to collect more than 10-year-old taxpayers' debts by seizing tax refunds.
Acting Social Security Commissioner Carolyn W. Colvin said in a statement that she directed the immediate halt to the program while the agency does a review of "our responsibility and discretion" under the current law.
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.
The effort to collect on the old debts began with a single line in the 2008 farm bill, lifting the statute of limitations on debts to the government that are more than 10 years old. The Treasury Department then set up rules that allowed the government to settle such debts by intercepting taxpayers' refunds. The action to stop collecting these debts was made after The Washington Post reported the government is seizing both state and federal tax refunds directed to an estimated 400,000 people who had relatives owing money to Social Security totaling $714 million. In many cases, the people whose refunds were intercepted had never heard of any debt, and the debts dated as far back as the middle of the past century.
Colvin said that anyone who received Social Security or Supplemental Security Income benefits and believes they have been incorrectly assessed with an overpayment should contact the agency to learn about options to resolve the overpayment.
There are several examples where people may have received overpayments as children. When a parent of a minor child dies, for example, 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 typically would 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.
Several members of Congress had argued that the government should not be holding children accountable for the financial acts of their parents, and the Federal Trade Commission advises that family members typically are not obligated to pay the debts of a deceased relative from their own assets.
