Your tax refund is safe from Social Security -- for now

Social Security has stopped trying to settle debts that are more than 10 years old by seizing tax refunds.

By MSN Money Partner Apr 16, 2014 2:42PM

This post comes from Krystal Steinmetz at partner site Money Talks News. 

Money Talks News on MSN MoneyThe Social Security Administration is backing off the controversial practice of seizing tax refunds to collect on decades-old debt.

Social Security Card © Tom Grill/Photographers Choice RF/Getty ImagesActing Social Security commissioner Carolyn Colvin issued the following statement  Monday:

I have directed an immediate halt to further referrals under the Treasury Offset Program to recover debts owed to the agency that are 10 years old and older pending a thorough review of our responsibility and discretion under the current law.

Colvin added, "If any Social Security or Supplemental Security Income beneficiary believes they have been incorrectly assessed with an overpayment under this program, I encourage them to request an explanation or seek options to resolve the overpayment."

It's a big deal, reports The Washington Post, which broke the story about the program's irregularities.  The Post said:

The action comes after The Washington Post reported that the government was seizing state and federal tax refunds that were on their way to about 400,000 Americans who had relatives who owed money to the Social Security agency. 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.

Last week we shared the Post's story about Maryland resident Mary Grice, who had her tax refunds snatched this year to settle an overpayment of Social Security survivor benefits that someone (Social Security couldn't say who) in Grice's family received in 1977. Her father died in 1960, when Grice was 4 years old, and she, along with her siblings and her father's first wife, received survivor benefits after that.

Even though the overpayment was decades old and Grice was no longer getting survivor benefits when the overpayment was made, she was held liable to pay. She sued, the Post said.

According to the Post, the practice of collecting decades-old debts came about after a single line in the 2008 Farm Bill did away with a 10-year statute of limitations.

Now it appears that your tax refunds are safe from seizure, at least for the moment. We'll see what happens after the Social Security Administration completes its review.

But apparently this program hasn't been working the way it's supposed to. Says The Associated Press:

"We want to assure the public that we do not seek restitution through tax refund offset in cases when the debt in question was established prior to the debtor turning 18 years of age," Social Security spokesman Mark Hinkle said in an email. "Also, we do not use tax refund offset to collect the debt of a person's relative -- we only use it to collect the overpaid benefits the person received for himself or herself."

What do you think about Social Security's backpedaling on collecting old debts?

More from Money Talks News


Apr 16, 2014 8:10PM
So when is all the money "borrowed" from SS going to be paid back?
Apr 16, 2014 7:40PM

The legal statue of limitations to get back money overpaid or money owed is 6 years for people and business in the US.  Why does the government get 10 years.  They started out saying 40 years, now they say 10 years and everyone thinks "ohh, that's fair".  No it isn't.  They are going after the children making them work (pay money) off the debt of their parents that was incurred when the child was an infant goes back to feudal rule and plantations!  Contract law and courts require a signature, all the IRS requires is the suspicion

Apr 16, 2014 8:40PM






Apr 16, 2014 8:52PM
It looks like they lied. The said that they do not do it. But they are being sued for doing it.
Apr 16, 2014 10:23PM

There has to be a statue of limitations on this just like everything else.    If the person is still living that received the money....collect it,.  Otherwise go after the estate NOT children who were underaged at the time.


Is there any common sense left in this country?????    Food stamp, welfare and Disability fraud is rampant in this country....why go after decades old Social Security overpayments??

Apr 16, 2014 10:12PM
If they make a mistake, how are we citizens who are receiving the payment supposed to know???  They are the ones who figure out the amounts and all!!!  What a crock!  If they made the mistake, then they need to eat it.  Stop taking people's money.  This is getting ridiculous.  You pay into social security for years and years and then they screw up and expect you to pay back their mistake.  Boo hoo for them.  The government needs to pay back all the money they borrowed from social security to pay for something else.  They have no right to backpeddle. 
Apr 16, 2014 7:58PM
If monies are due they should be collected, I agree.  I also, firmly believe that monies borrowed should be collected, this should be equally enforced by those that monies are owed, be they private citizens or the Government of The United States. As in the money due the Social Security Fund. 
Apr 16, 2014 10:13PM
Social Security is digging in the couch cushions, so to speak.  Probably have a computer program going through old records automatically sending collection letters.  So if the Social Security administration overpaid 50+ years ago, and the person didn't knowingly do anything wrong, it seems extreme for SS to be able to collect.  If a citizen finds that he or she, or even Mom or Dad, overpaid 40 years ago, do we get to send a collection letter?  

Apr 16, 2014 8:50PM
I was told by the VA that my dads det. died with hem they did not pay his hospital bill. So if he was in det. to the GOV. it died with hem!!!!!!!!
Apr 16, 2014 4:22PM
If the debts are legitimate debts, then don't backpedal.   Just collect on the debt like anyone else.
Apr 16, 2014 9:27PM
Interesting fact. Social security benefits are paid for the previous month and you are not due a benefit for the month that you pass away. There is no pro ration. if you pass away even on the 30th of the month and you receive a check three days later  on the 3rd of the month you must return it. Just curious how many spouses or beneficiaries do not
Apr 17, 2014 12:53AM
My father passed away when I was not very old, he was a veteran, he had worked and paid into the social security system.  The way the system is set up the surviving parent can receive death benefits for minor children.  I realize that the way our government works this is a bad assumption but I will make the assumption anyway that when the child/children turn of legal age the government would have on record and stop making payments to the surviving parent.  Now assuming the surviving parent somehow gets an over payment and this money is paid to the parent how would or should it be the obligation of the child to pay this money back if discovered years later.  I am not saying it would be right for the parent to take an overpayment what I am saying is that the child was or is in all probability not handed the money it goes to pay things like clothes, food necessities. If you intentionally accept or apply for funds not due you yes you should pay it back with interest but someone who was a minor child at the time of the overpayment should not be held accountable for their parents mistake.
Apr 16, 2014 5:08PM
If the money is owned, they should continue to collect. Otherwise, it's just more of my money that's going to get taken.
Apr 17, 2014 12:27AM
what everyone should do is set their w4 so they do not get a refund. first of why should you give uncle Sam a no interest loan. second there is a scam where someone will file and take your refund from you before you file. a friend on mine had this happen to him, took over a year to get his money back. Third jf they decide to get your refund and you don't have one coming they can't get it. this goes for Obama care fines.
Apr 17, 2014 8:48AM
If a private company ran a retirement program like the Government runs Socialist Insecurity, most would demand that the CEO of that company be arrested and the company be destroyed.  I fail to understand why so many believe the solution to government incompetence is more government incompetence.  I say dismantle these socialist programs and let people be responsible for their own retirement funds.
Apr 16, 2014 7:27PM

Your big brother continues to stick it up your backside knowing that all you can do as an individual is say, "Thank you, Dear Mayor, may I have another?"


Welcome to Obamaville.  mmm, mmm, mmm.  What will the working poor do when our Dear Mayor shorts them yet another stamp in the weekly food allotment booklet?

Apr 17, 2014 9:11AM
SS is a Piggy Bank for government and it really belongs to the people that put money into it those same people deserve a fair earning on investment...No one else has ownership...PERIOD!.
Your tax refund is safe from Social Security -- for now

Translation:  The Democratic Party is clawing for ways to steal your tax refund to fund the lazy, entitled, and illegal's.

Apr 17, 2014 10:15AM
Another fine example of the government sticking a nail studded bat up the average Jo's AS !  
Apr 17, 2014 11:18AM
Statute of limitations aside, the huge issue should be the ssa trying to recoup money THEY incorrectly gave out from relatives of the recipient. What's next? Will it be punising family members for crimes commited by another person? This whole bs the ssa is trying to pull off to cover their own sorry a*ss is outrageous! And what does this have to do with the farm bill?
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