Federal Government Once Again Wants You to Pay It Backward

Here’s yet another example of the U.S. government squeezing the disadvantaged for back payments they don’t have.

From the Huffington Post:

Seniors Forced Into Poverty As Education Department Demands Payment

The Education Department is demanding so much money from seniors with defaulted student loans that it’s forcing tens of thousands of them into poverty, according to a government audit.

At least 22,000 Americans aged 65 and older had a part of their Social Security benefits garnished last year to the point that their monthly benefits were below federal poverty thresholds, according to the Government Accountability Office.

Education Department-initiated collections on defaulted federal student loans left at least another 83,000 Americans aged 64 and younger with poverty-level Social Security payments, GAO data show. Federal auditors cautioned that the number of Americans forced to accept poverty-level benefits because of past defaults on federal student loans are surely higher.

That reminds the hardworking staff of its time at the Social Security Administration when, in a much more egregious clawback, the Feds tried to recover excess money it had paid to welfare recipients through no fault of their own.

From our acid-free flashback, The Redemption Unit:

Pay It Backward

When the last claimant’s benefits had been redetermined and the government added up its losses, it immediately decided to recoup them by initiating the Overpayment Recovery Program. Letters went out – on green paper this time – telling claimants they had to come in to the DO [District Office]. And the whole kabuki dance started all over again.

Claimant plunks green letter down on desk. File comes out. Conversation begins.

“Mrs. Patterson, our records show that you were overpaid during the past two years by a total of $2162.”

“I never got no check for $2162.”

Conversation effectively ends.

In essence the Overpayment Recovery Program took people who’d just had their welfare checks cut, and cut them some more. One day my next-desk neighbor, Tricia McDermott, flipped a file across her desk and leaned back in her chair. Tricia was too compassionate for the job but too strait-laced not to do it by the book. She stared toward the windows and said to no one in particular, “What we need here is an overpayment recovery incentive. Do you think they’d ever consider giving us a cut of the take?”

“In this lifetime?”

“No, really – 10% off the top of any money we recover. We could limit it to refunds and exclude adjustments or returned checks.”

“Uh-huh.”

That there were three different ways to achieve a single result was pure SSA [Social Security Administration]. Back then the Social Security system was virtually all exceptions and no rules (it may still be – I’ll find out in a few years). SSI [Supplemental Security Income] wasn’t quite as bad, but it was still a contraption only Rube Goldberg could love. To make matters worse, the CRTs [Claims Representatives (Term)] received a steady stream of what were called “claims transmittals” – memos that were supposed to clarify, but more often complicated, SSI’s crazy-quilt regulations.

Representative sample: “Transmit payment status code of WO4, WO5, or WO9. However, because of systems limitations do not input these PSCs. Use force pay to pay correct amount.” (SSIH, 13515-2)

So nobody read the transmittals. Except me. I figured I needed something on the plus side of the ledger to offset being chronically late and generally out of step. Consequently I read every transmittal, which probably was why I got the computer to do things no one else could.

In the course of my reading I also discovered that two obscure SSI regulations, when combined, essentially allowed a claims rep to waive any overpayment.

So that’s what I did.

A claimant would come in, sit down at my desk and wearily hand over his green letter.

“Yes. Mr. Randolph. Our records show – let’s see here – that during the past two years you were overpaid by $846.”

“I never got no check for $846.”

“That’s right, Mr. Randolph. This is really just a bookkeeping thing. I need you to sign a couple of forms and you’ll be all set.”

I had decided to hand-write the two forms each time; if I had a stack of copies around, they might accuse me of premeditated overpayment waiving. Better to have a sort of eureka element involved. I’d scribble out the forms, turn them toward the claimant, and spend a good five minutes convincing him to sign them. The claimant would walk away looking slightly puzzled. Then someone else would come to my desk with a green letter.

For a while my waive-‘em-all policy stayed under the radar. But I ran into problems when people began asking for me by name. Apparently word had gotten around the claimant community that I was the guy to see with your overpayment letter. So they would come into the DO and – completely disregarding SSI’s sophisticated system of assigning claimants alphabetically – say they wanted to be interviewed by me. Suddenly I was very much on the radar screen.

The Operations Supervisor came by one day and sat on the corner of my desk, an exercise always fraught with peril.

“You’re an asshole, but you know the system better than the bosses do. They hate that. What if everybody did what you’re doing?”

“Then I’d be a fool not to, like Yossarian said in Catch-22.”

“Sometimes it’s not so smart to be so smart. Too bad you won’t be around long enough to appreciate that.”

I started to think he was right, especially when management decided to walk me up the ladder – from OS to ADM [Assistant District Manager] to DM [District Manager] to AD [Area Director]. The drill was the same each time: I’d be summoned to the manager’s office, I’d sit down, and he’d say, “You can’t waive overpayments the way you’re doing. This is money that the claimants were not entitled to, and it’s your job to recover it from them.”

Each time my response was the same.

“I’m doing this by the book. It’s all there in the transmittals. You don’t like it, change the system.”

That, of course, was like saying make the Gabor sisters stop getting married.

“There’s nothing wrong with the system – there’s something wrong with you. What are you thinking, writing all these waivers?”

“I’m thinking that these people were overpaid through no fault of their own. They didn’t cheat the government; the government cheated the government. Why should they pay for that?”

“Because that’s what the regulations say.”

“The regulations also say overpayments can be waived under certain conditions, at the discretion of the claims rep. I’m just exercising my discretion.”

“Very poorly, I would say.”

“Yes, a CRT’s pay is nothing if not minimal.”

“Get out of here.”

Sooner rather than later, I did. The seniors who can’t repay their loans aren’t quite so lucky.

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2 Responses to Federal Government Once Again Wants You to Pay It Backward

  1. Genuinely great to read that again, Nately.

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