A former student who works for Social Security responds to yesterday’s post:
I read your blog post today on Social Security overpayments and wanted to respond briefly (in my personal capacity, of course, and so my opinions don’t necessarily represent Social Security’s official policy on the matter). I think you’re seriously mistaken about the source of the agency’s claim to recoup alleged overpayments. Rather than a common-law argument of unjust enrichment, the Social Security Act and implementing regulations offer specific authority to collect overpayments using a variety of methods, including tax refund offsets.
The source of authority for collecting overpayments from claimants who received Title II benefits lies in Section 204 of the Social Security Act (codified at 42 USC 404). That statute allows Social Security to prescribe regulations to implement the overpayment process. 20 CFR 404.502 details the specific means by which the agency may collect overpayments. 20 CFR 404.502(b) covers situations when the individual overpaid dies before the adjustment is made, and 404.502(b)(3) specifies that such adjustment can be made by “withholding a lump sum or monthly benefits due any other individual on the basis of the same earnings which were the basis of the overpayment to the deceased overpaid individual”. In the case of the Post story, both Sadie Grice and Mary Grice were entitled to benefits based on the father’s earnings record (some combination of widow’s benefits, mother’s benefits, or child’s benefits, I would guess, though I don’t know for sure and have no personal knowledge of the case other than what’s in the Post article). Therefore, 404.502 would arguably allow collection of the overpayment from Mary because she received benefits on the same earnings record as Sadie did, and Sadie was mistakenly overpaid. 20 CFR 404.520 then permits the overpayment to be referred to the Treasury if the debt is certain in amount, past due, and legally enforceable, for a tax refund offset.
If the benefits in question were child’s benefits that Mary was entitled to solely because she was a minor child of an insured individual (20 CFR 404.350), that’s her entitlement, not her mother’s even though her mother acted as her representative payee because she was 4 years old when she gained the entitlement. I’m a little more unclear on how it would work if Sadie was receiving mother’s benefits (20 CFR 404.339) because of the minor children, but that presumed she wasn’t entitled to widow’s benefits in her own right. In any case, while the propriety of trying to collect such old debts is arguable and the agency should certainly be held to prove the overpayment occurred on the stated earnings record in the specified amount, I feel certain the agency is not relying on a common-law theory of unjust enrichment to do so.
Point taken, but I still believe that this program would not be upheld in court (and perhaps the author of the email agrees in part). I haven’t look at the regulations, but the regulations must be consistent with the statute, and 42 USC 404(b) contains this provision:
In any case in which more than the correct amount of payment has been made, there shall be no adjustment of payments to, or recovery by the United States from, any person who is without fault if such adjustment or recovery would defeat the purpose of this title or would be against equity and good conscience. In making for purposes of this subsection any determination of whether any individual is without fault, the Commissioner of Social Security shall specifically take into account any physical, mental, educational, or linguistic limitation such individual may have (including any lack of facility with the English language).
So the common law (or technically, equity) is relevant after all. And this means, among other things, the doctrine of laches would apply (even if Congress has suspended the statute of limitations); and equity would frown on (as they say) recovery from Mary on account of payments that Sadie may not have no turned over to her, may have spent on herself or the other kids, and so on. Clearly, as a four-year old, Mary was without fault; and the last sentence of the provision would seem to further strengthen her argument. Finally, consider again the policy of going after the oldest child alone for overpayments that benefited all the children if at all; this too is not explicitly authorized by the statute, and would, I am fairly certain, not be considered equitable by a court.