Social Security Administration Halts Collection of Old Debts

Tuesday, 15 Apr 2014 01:24 PM

By Courtney Coren

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The Social Security Administration will no longer pursue taxpayer debts that are more than 10 years old.

The federal agency made the announcement Monday after The Washington Post published a story last week saying that the Treasury Department was withholding tax refunds from taxpayers over debts owed by their parents because of Social Security benefits collected on their behalf when they were children.

"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 to refer," Carolyn Colvin, acting Social Security Administration commissioner, said in a statement on the agency's website.

"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," she added.

The statute of limitations on the "collection of debt by administrative offset" was lifted in a revision to the 2008 Farm Bill.

That change gave authorities the ability to withhold tax refund money from over 400,000 individuals who had family members who owed debts to the Social Security Administration.

The news sparked a public outcry, a lawsuit and a response by lawmakers.

"Payment beneficiaries have to be accountable for overpayments from the government, but the government has to be reasonable and use common sense," Republican Sen. Charles Grassley of Iowa said in a statement, according to The New York Times.

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