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Can the Government Recoup Parents’ Social Security Overpayments from Kids?

Friday, April 18th, 2014

Since 2008 the Social Security Administration, as well as certain other federal agencies, has been authorized to seize federal payments to recover debts more than ten (10) years old.  Previous policy had prevented the government from seeking repayment on any debt older than ten (10) years.  This opened up an additional roughly Four Hundred Thousand (400,000) old debts totaling over Seven Hundred Million ($700 MM) Dollars.  While on paper this authorization seems like a no brain way to increase revenue for the government without increasing taxes, the real world effect brought both sides of the aisle together.

The Washington Post broke the story (Read more here), where a fifty-eight (58) year old woman, whose father passed when she was four (4) years old in 1960, had her federal and state tax refunds intercepted to repay a debt the Social Security Administration claims was over paid in 1977.  The SSA collecting on a thirty-seven (37) year old debt isn’t even the worst part of the story; the worst part is the SSA may not even be collecting it from the right family member…and the SSA didn’t care!

Ultimately, a week after this story broke, enough pressure was placed on the SSA “suspended” the policy; however, the law is still on the books so next spring if you don’t get the refund you expected the government may have finally caught up with you!