Latest news with #overpayments
Yahoo
01-06-2025
- Business
- Yahoo
President Donald Trump's Policy Is Set to Impact the Social Security Checks of Roughly 2,000,000 Beneficiaries -- Are You One of Them?
Between 80% and 90% of retirees rely on their Social Security income, to some degree, to make ends meet. A Trump administration policy change is expected to modestly reduce monthly Social Security payouts for beneficiaries who are delinquent on their federal student loan(s). Additionally, the Trump administration is ramping up efforts to collect Social Security overpayments from more than a million Americans, which can lead to steep benefit garnishment. The $23,760 Social Security bonus most retirees completely overlook › For the last 85 years, Social Security has stood as a financial pillar for America's aging workforce. Since 2002, national pollster Gallup has been surveying retirees to gauge how important their Social Security income is to their financial health. Consistently, between 80% and 90% of all respondents note the reliance on this all-important payout to cover at least some portion of their expenses. For the program's more than 69 million beneficiaries -- 52.6 million of which are retired workers -- nothing is more important than sustaining this payout and steadily increasing it through annual cost-of-living adjustments (COLAs) over time. But for approximately 2,000,000 beneficiaries, their Social Security income is anything but guaranteed at the moment. Due to two notable policy changes under President Donald Trump, select beneficiaries, including retired workers, may see their Social Security checks marginally, or meaningfully, reduced in the coming months. According to the U.S. Department of Education, some 42.7 million Americans have taken on a collective $1.6 trillion in outstanding federal student loans, as of April 2025. But what you might not realize is that, as of August 2024, nearly 3.59 million of these borrowers were aged 60 and above. Based on a January 2025 report from the Consumer Financial Protection Bureau, some 452,000 borrowers aged 62 and older that are likely receiving Social Security benefits were in default on their student loans -- and that's a potential problem. President Trump and his administration have placed great emphasis on weeding out perceived fraud and making the federal government more efficient. Among the many things on the Trump administration's agenda is collecting on defaulted federal student loans. The U.S. Department of Education hasn't collected on defaulted student loans since March 2020; but this COVID-19 era pause is coming to an end. Beginning as early as June 2025, Social Security beneficiaries who are in default on their federal student loans could see up to 15% of their monthly payout garnished until their federal student loan repayment is no longer in default. Note, this garnishment applies to all types of beneficiaries: retired workers, workers with disabilities, and survivor beneficiaries (which means the actual figure of Social Security beneficiaries in default may be larger than 452,000). Furthermore, the 15% Social Security check garnishment is based on your total benefit. For instance, if your Medicare Part B premium is automatically deducted from your monthly payout, the 15% will be reduced from this prededuction figure. The icing on the cake is that the Trump administration is somewhat expediting collection from delinquent federal student loan borrowers. Whereas warning letters concerning possible garnishment came 65 days in advance of such an event prior to the COVID-19 pandemic, the new warning letters offer just 30 days' notice prior to deductions commencing. The one caveat to this 15% offset is that a beneficiary can't be left with less than $750 per month. If, for example, you receive $800 per month from Social Security and are delinquent on your federal student loan, the maximum that you would be garnished is $50 per month instead of 15%. The other major policy shift that has the potential to impact in the neighborhood of 1.5 million Social Security recipients is benefit clawbacks. From time to time, the Social Security Administration (SSA) overpays beneficiaries. Sometimes this error is entirely the fault of the SSA. In other instances, it's due to a workers' disability status changing, or perhaps an unreported change/increase in income received. Regardless of the reason, this overpayment needs to be recouped by the SSA. We lack complete numbers on how many Americans fall into this group, but in 2023, then-acting SSA Commissioner Kilolo Kijakazi told members of the House Ways and Means Committee that north of 1 million Social Security beneficiaries were overpaid in fiscal year (FY) 2022 -- the federal government's fiscal year ends Sept. 30 -- and more than 980,000 recipients received too much in benefits in FY 2023. It's possible that some of the recipients Kijakazi referred to have repaid what they owed under the Joe Biden administration's 10% clawback rate -- a garnishment rate that was lowered from 100% during the pandemic. The SSA's Office of the Inspector General hasn't provided any updates on overpayments since FY 2023. Thus, I'm making the conservative estimate that around three-quarters of these prior overpayments are still outstanding (about 1.5 million beneficiaries) given the substantially lower clawback rate during the Biden era. These roughly 1.5 million overpaid beneficiaries, coupled with the 452,000 federal student loan delinquencies, equates to approximately 2 million people at risk of seeing their Social Security checks reduced. Prior to the pandemic, previous presidents, including Barack Obama and Donald Trump during his first term in the White House, featured 100% clawback rates. This allowed the entirety of a beneficiaries' Social Security check to be withheld until the overpayment was fully collected. In March, the Trump administration, via the SSA, stated plans to reinstate this 100% clawback rate on overpayments for retired workers, workers with disabilities, and survivor beneficiaries. But in late April, the administration backed off this aggressive collection rate and settled on a 50% garnishment of benefits until the overpayment is satisfied. While recovering all SSA overpayments would save the program about $7 billion over the coming 10 years, this new 50% recovery guideline has the potential to financially strap some of these roughly 1.5 million recipients who rely heavily on their Social Security income to cover their expenses. If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. President Donald Trump's Policy Is Set to Impact the Social Security Checks of Roughly 2,000,000 Beneficiaries -- Are You One of Them? was originally published by The Motley Fool
The Guardian
20-05-2025
- The Guardian
Guardian's Patrick Butler and Josh Halliday win Paul Foot award
The Guardian journalists Patrick Butler and Josh Halliday have won the Paul Foot award for their coverage of how vulnerable British carers were taking to court for accidentally claiming the allowance alongside part-time work. The pair uncovered how carers were prosecuted even though many had tried to report their earnings to the Department for Work and Pensions (DWP). Tens of thousands of carers have unwittingly fallen foul of earnings rules each year since the DWP permanent secretary Sir Peter Schofield promised MPs in 2019 that new technology would eradicate the problem by preventing overpayments 'in some cases before they happen'. In the five years after the verify earnings and pensions tool, known as VEP, was presented as a solution to the problems of carer's allowance, more than 262,000 overpayments totalling in excess of £325m were clawed back from carers, and 600 carers were prosecuted and received criminal records, according to the National Audit Office. In the case of one man, who was convicted for over-claiming 30p a week, the DWP has since acknowledged he made an innocent mistake. Labour has now set up an independent review of the allowance and raised the earnings limit for those claiming it. The 2025 awards ceremony on Tuesday was hosted at Bafta by Private Eye editor Ian Hislop, who said: 'Who cares? This is the big question in Britain at the moment and the winners wrote brilliantly about these very people.' Butler, the Guardian's social policy editor, told The Private Eye Podcast: 'This is a story about injustices in the benefits system. 'And how these injustices have inflicted debt, misery and untold stress on some of the most vulnerable and poorest people in our society who have dedicated their lives to looking after loved ones.' Halliday, the north of England editor, said: 'When you speak to these people it really affects you. 'This is devastating sums of money, people who are already living extremely difficult lives, trying to do their best, coping with the ongoing trauma of caring for a loved one.' Padraig Reidy, chair of the judges, said: 'This was an enraging and heartbreaking campaign on behalf of a group the government has called 'unsung heroes'. 'You couldn't read these articles without thinking of the Post Office scandal – another story of ordinary, decent people persecuted by an uncaring bureaucracy. It was in the best tradition of Paul Foot's work.'
The Sun
20-05-2025
- Business
- The Sun
Warning for tens of thousands on benefits being forced to repay up to £20k due to DWP error
TENS of thousands on benefits are being forced to repay up to £20,000 due to DWP errors. Households on Carer's Allowance are having fork out huge sums after going over the benefit's weekly earnings limit. 1 The limit was previously £151 but was hiked to £196 in April - the biggest rise in almost 50 years. Anyone on the benefit that goes over this limit has to repay the amount they were overpaid. However, historic errors have seen the DWP fail to flag when carers have breached it. Now, new figures analysed by Carers UK and shared with The Guardian reveal at least £357million in Carer's Allowance benefit has been overpaid in error in the last six years. Emily Holzhausen, director of policy and public affairs at Carers UK, told the publication carer's "deserve better" and that the charity had asked the government to strike off debts of those who have been forced to pay back money after breaching the earnings limit. Tens of thousands on Carer's Allowance have unwittingly breached the earnings limit since 2019. The year before, new technology called the verify earnings and pensions tool (VEP) was introduced by the government designed to allow the DWP to check thousands of electronic alerts of potential earnings breaches by those on Carer's Allowance each month. However, the DWP decided to only investigate half of all VEP alerts, meaning some breaches went undetected for long periods. This led to carers unknowingly racking up huge overpayments and having to repay thousands and sometimes tens of thousands of pounds in overpaid benefits. One such case of someone having to pay back thousands of pounds was Vivienne Groom. Three key benefits that YOU could be missing out on, and one even gives you a free TV Licence In 2023, she was prosecuted for failing to declare her minimum wage Co-op job while caring for her mum, and forced to pay back £16,000. Last month, ministers confirmed they will invest £800,000 to ensure 100% of VEP alerts are reviewed moving forward, meaning overpayments are flagged earlier. A DWP spokesperson told The Guardian: "The Carer's Allowance overpayment rate is the lowest on record. "And we are going further by increasing funding and bringing in more staff to check 100% of alerts to help prevent carers falling into debt. 'We are absolutely clear that we want to eliminate waste and ensure people get the money they are entitled to, so we can invest in our public services as part of our plan for change." What to do if you breach the earnings limit If you have ever breached the earnings limit, you should try and proactively report it to the DWP as it is classed as a change in circumstances. You can report any change in circumstances online via the Government's website. But you'll need your National Insurance (NI) number to hand, details of the person you're caring for and details of the change. If you have been overpaid Carer's Allowance, you will have to pay it back in full or instalments via the DWP Debt Management platform. This is also on the Government's website. If you don't do this, the DWP can take deductions from your work salary, or even pass your case on to a debt collector. If you don't engage with the debt collector, it may then take your case to the county courts. You can dispute an overpayment if you don't agree with it, but you'll need evidence as to why you claim to not have overpaid. You can do this via what's known as a "mandatory reconsideration", which you can submit to the DWP online, via phone or by letter. The specific contact details you'll need to send any correspondence to will be on the decision letter you receive from the DWP. Once the DWP has received your mandatory reconsideration, you will receive a "mandatory reconsideration notice" informing you whether it has changed its decision. If you disagree with that outcome, you can appeal to the Social Security and Child Support Tribunal. A judge will listen to both sides of the argument before making a decision. Are you missing out on benefits? YOU can use a benefits calculator to help check that you are not missing out on money you are entitled to Charity Turn2Us' benefits calculator works out what you could get. Entitledto's free calculator determines whether you qualify for various benefits, tax credit and Universal Credit. and charity StepChange both have benefits tools powered by Entitledto's data. You can use Policy in Practice's calculator to determine which benefits you could receive and how much cash you'll have left over each month after paying for housing costs. Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for. .
The Guardian
19-05-2025
- Business
- The Guardian
At least £357m in carer's allowance paid out in error over past six years, charity finds
At least £357m in carer's allowance benefit was paid out in error over the past six years due to official failures, resulting in debt and misery being inflicted on hundreds of thousands of people. The bulk of the figure relates to minor breaches of earnings rules by carers which the Department for Work and Pensions (DWP) was alerted to but did not check, allowing carers to run up huge overpayments over months and years. Carer's UK, which used new official fraud and error data to calculate the £357m figure, described it as an unacceptable failure by the DWP, which had years ago promised new technology would almost entirely eradicate carer's allowance overpayments. 'Given that unpaid carers were falsely assured that the problem would be largely resolved in 2019, they deserve better, and we've asked the government to strike off debts where they could have told carers sooner,' said Emily Holzhausen, director of policy and public affairs at Carer's UK. Carer Guy Shahar, whose family is being pursued by the DWP for £10,000 in earnings overpayments , described the £357m figure as 'shocking'. He called for the sum to be 'written off' given the department failed to stop the overpayments as promised. 'The DWP's negligence and failure to follow even its own low standards have led to this ridiculous situation that they promised to have sorted out years ago,' he added. 'They are making criminals out of the vulnerable families they are supposed to be helping, and piling unnecessary debt, hardship, anxiety and massive adversity on to them in order to avoid taking responsibility for their own failures. It would be much fairer to write the whole thing off.' A Guardian investigation into carer's allowance over the past year has detailed the horrific financial and emotional impact on carers of overpayments, but the latest figures also highlight the extent to which official failures meant huge amounts of taxpayers money was needlessly wasted. Tens of thousands of carers have unwittingly fallen foul of earnings rules each year since the DWP permanent secretary Sir Peter Schofield promised MPs in 2019 that new technology would eradicate the problem by preventing overpayments 'in some cases before they happen'. The verify earnings and pensions tool, known as VEP, introduced in 2018, was meant to enable DWP to swiftly check thousands of electronic alerts of potential earnings breaches by carer's allowance claimants each month. However, the DWP decided as a matter of policy to only investigate half of all VEP alerts, meaning breaches could go unidentified for long periods. This led to carers unwittingly running up huge avoidable overpayments, and typically having to repay sums between £1,000 and £5,000 but in some cases as high as £20,000. In the five years after VEP was presented as a 'solution' to the problems of carer's allowance, more than 262,000 overpayments totalling in excess of £325m were clawed back from carers, and 600 carers were prosecuted and received criminal records, according to the National Audit Office. Ministers last month announced they would invest £800,000 to properly staff the carer's allowance section to enable 100% of VEP alerts to be reviewed. This would enable overpayments to be tackled 'when they arise' rather than 'waiting until carers have built up large debts'. Carers UK's calculations were based on fraud and error data published by the DWP last week. The DWP report claims VEP has helped the department reduce levels of fraud and overpayment on carer's allowance since they were last measured in 2020. A DWP spokesperson said: 'The carer's allowance overpayment rate is the lowest on record. And we are going further by increasing funding and bringing in more staff to check 100% of alerts to help prevent carers falling into debt. 'We are absolutely clear that we want to eliminate waste and ensure people get the money they are entitled to, so we can invest in our public services as part of our plan for change.'
The Independent
15-05-2025
- Business
- The Independent
‘Staggering' number of DWP overpayments slammed by minister
Over £9 billion in benefits are estimated to have been overpaid over the past year due to fraud and error, a figure one government minister has called "staggering." Official statistics reveal the total overpaid benefit expenditure reached £9.5 billion in the year ending March, with fraud accounting for the majority. Meanwhile, an estimated £1.2 billion was underpaid during the same period, according to Department for Work and Pensions (DWP) figures. Fraudulent claims contributed £6.5 billion to the total overpayments, a decrease from £7.3 billion the previous year. However, overpayments due to claimant error rose to £1.9 billion, up from £1.6 billion, while official errors also increased, reaching £1 billion from £0.8 billion. Overpayments specifically related to Universal Credit saw a slight decrease, falling to £6.35 billion from £6.41 billion. DWP said people under-declaring their earnings remained the main cause of fraud overpayments, followed by benefits claimants failing to declare living with a partner, and thirdly people under-declaring their financial assets or capital. The department said it was able to recover some £1.1 billion of overpayments in the past year – £0.4 billion in housing benefit and the same amount in universal credit. While the overall figure fell from £9.7 billion in the previous year, it was still described as 'staggering' by minister Andrew Western. In a written statement published alongside the figures on Thursday, he said: 'This Government made a manifesto commitment that it will safeguard taxpayers' money and not tolerate fraud or waste anywhere in public services. 'With welfare benefits paid to around 24 million people, the welfare system is a deliberate target for both organised crime groups and opportunistic individuals and it is vital that the Government continues to robustly tackle fraud to ensure support goes to those who need it most. 'We are taking further steps to minimise error, ensuring the right people are paid the right amount at the right time.' The figures came as the Public Authorities (Fraud, Error and Recovery) Bill moved to the House of Lords for its second reading on Thursday. Its proposed reforms have been billed as delivering the 'biggest ever crackdown on fraud against the public purse'. The Bill seeks to curb multibillion-pound benefit fraud and includes allowing the DWP to recover money directly from fraudsters' bank accounts. It would also allow the DWP to have the power to obtain bank statements from people they believe have enough cash to pay back welfare debts but are refusing to do so. Courts could also suspend fraudsters' driving licences after an application by the DWP, if they owe welfare debts of more than £1,000 and have ignored repeated requests to pay them back. In the Commons, a group of Labour MPs rebelled to support an amendment designed to curb Government powers to verify a person's benefit eligibility and the Liberal Democrats warned the Bill could result in 'Orwellian levels of mass surveillance of those who have means-tested benefits'. The DWP figures also show that fraudulent claims for Personal Independence Payments (PIP) 'remained at 1 in 100 claims' in 2025, which was the same as in 2024. The health-related benefit is at the heart of Labour's recently announced welfare reforms, making up £4.1 billion of the £6.4 billion savings. Disability advocate and founder of Purpl, Georgina Colman, said the statistics 'show how misdirected the cuts are.' 'It's clear that the majority of people claiming benefits like PIP are in need, so it's frustrating to see the harshness of the welfare cuts. PIP and other benefits are for the most vulnerable in society and taking away these lifelines could be counterproductive and leave people worse off.'
