As the nation reeled from COVID-19, the federal government sent many Americans a financial lifeline.
But some recipients say the COVID relief payments have triggered financial distress by jeopardizing their Social Security benefits.
The government has demanded they repay much larger amounts — thousands of dollars in benefits for the poor and disabled distributed by the Social Security Administration.
“The government gave this money to them with one hand. They should not be trying to take it back with the other,” said Jen Burdick, an attorney at Community Legal Services of Philadelphia who has helped many people contest repayment demands.
Jo Vaughn, a disabled 63-year-old in New Mexico, received $3,200 in federal COVID relief. Then came a letter from the Social Security Administration dated Aug. 25, 2023, saying she owed the government $14,026.
“They are sending me to a very early grave,” Vaughn said.
The COVID clawbacks show the trauma the Social Security Administration can cause when it claims to have overpaid beneficiaries, many of them highly vulnerable, then calls on them to pay the money back.
And the collection efforts illustrate the limitations and dysfunction that have come to define the agency.
Social Security Administration spokesperson Nicole Tiggemann declined to comment for this article or to arrange an interview with the agency’s acting commissioner, Kilolo Kijakazi.
In the wake of a recent investigation by KFF Health News and Cox Media Group, House and Senate members have called for action on problems at the Social Security Administration. The agency has announced that it is undertaking a review of its own, and a House panel is scheduled to hold a hearing on Oct. 18.
Vaughn and other recipients didn’t ask for the COVID money. The checks, known as economic impact or stimulus payments, landed automatically in their mailboxes or bank accounts in three installments in 2020 and 2021. The payments, which were based on the recipient’s income, totaled as much as $3,200 per person.
The payments pushed some beneficiaries’ bank balances above the $2,000 asset limit for individuals on Supplemental Security Income (SSI), a program for people with little or no income or assets who are blind, disabled, or 65 or over. The limit, which hasn’t been adjusted for inflation in decades, can discourage people from working or saving more than a perilously small amount of money.
In some cases, when the Social Security Administration belatedly noticed the higher bank balances, it concluded the beneficiaries no longer qualified for SSI, according to people affected. Then the agency set out to recapture years of SSI benefits it alleged they shouldn’t have received.
Even as recipients appealed the actions, the agency stopped sending monthly benefit checks.
The ripple effects can disrupt health care, too. In most states, receiving SSI makes someone eligible for Medicaid, so halting SSI benefits can jeopardize coverage under the public health insurance program, said Darcy Milburn of The Arc, an organization that advocates for people with disabilities.
Vaughn, who suffered a disabling injury while working as a cook at a truck stop, said she depends on the $557 she was receiving from SSI each month. It hasn’t come since August, she said.
Her only remaining income, she said, is $377 in monthly Social Security retirement payments.
“I’m afraid of being homeless,” she said by phone. “I don’t want to end up on the street.”
Or even worse, she said in an email: “If I don’t start receiving my money back, well let’s just say I have my will ready.”
Actions Defy Agency’s Own Policy
The COVID stimulus payments aren’t supposed to trigger Social Security clawbacks.
Early in the pandemic, the Social Security Administration said that, when assessing people’s eligibility for SSI, it would exclude the payments for 12 months. Later, it said it would exclude them indefinitely.
But what the agency says and what it does — indeed, what it is capable of doing — are often very different, people who study the agency said.
“It’s not clear SSA knows where money in beneficiaries’ accounts is coming from,” said Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities.
“As far as we can tell, SSA simply doesn’t have the tools to implement a permanent exclusion from the resource limit,” Romig said.
The number of people who have received Social Security clawback notices due to COVID relief payments is unclear.
What’s more, beneficiaries might not realize stimulus payments could be at the root of alleged overpayments. As a result, they may be ill-equipped to challenge any clawbacks.
“A lot of people have been caught up in inaccurate or improper” overpayment notices “because of stimulus money,” said Burdick, the legal aid attorney in Philadelphia. She estimated that her office alone had seen about a hundred such cases.
Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee, asked the Social Security Administration in September 2021 how many people had their SSI payments reduced or cut off on account of the stimulus payments. In its written response, the agency didn’t say.
At the time, Wyden said the agency’s decision to indefinitely exclude stimulus payments from the asset limit “may have come too late for many struggling families.”
The Consortium for Citizens with Disabilities, an umbrella group for advocacy organizations, flagged the problem as early as May 2021. In a letter to the Finance Committee, the group said it was concerned that some people would have their benefits reduced “in order to recover overpayments that never should have been assessed.”
Vaughn said she saved her COVID stimulus funds to leave herself some money to fall back on.
When the Social Security Administration told her she had been over the asset limit for more than two years, the agency didn’t mention the stimulus payments. But Vaughn reviewed her bank records and concluded the COVID payments were the cause.
Lost in the System
Dave Greune of North Carolina said that, in the case of his disabled 43-year-old daughter, Julia, the cause of an overpayment notice was clear.
The reason her assets exceeded the limit, Greune said, was that $3,200 in stimulus payments had been deposited directly into her bank account by the same government now demanding she repay almost twice that amount.
How does he know?
The only funds that flowed into Julia’s account were her SSI payments and the COVID stimulus payments, Greune said.
In April 2023, two years after Julia’s last stimulus payment, the agency notified Greune that it had been overpaying her since September 2020.
First it said she owed $7,374.72. Later, it revised that to $6,253.38.
Julia is blind with cerebral palsy and a mental disability, Greune said, leaving her “totally disabled.” The family was saving the stimulus money to buy her a new wheelchair, he said.
In correspondence, the agency pointed to checking account balances as the basis for its finding that Julia exceeded the $2,000 asset limit. It noted that the agency doesn’t count the value of a home, one vehicle, or “a burial fund of up to $1,500.” But it didn’t alert Greune that, according to its own policy, COVID stimulus payments shouldn’t count toward the limit. He figured that out himself.
Greune said he immediately filed an appeal online.
In July, at the direction of an agency representative, he drove 45 minutes to a Social Security office in Raleigh and delivered a stack of bank statements and an appeal form.
Greune, 64 and retired from a career in real estate, logged many unsuccessful efforts to follow up by phone. Left on hold for 15 minutes until the call dropped. Left on hold for 46 minutes until the call dropped.
Ultimately, he said, he reached a person who told him she saw no record of the agency having received the appeal he filed online — or the documents he delivered by hand.
In the meantime, Social Security stopped sending Julia’s monthly benefits. The last payment, of $609.34, arrived six months ago, he said.
Late last month, the county government sent Julia a notice that, because the Social Security Administration was stopping her SSI checks, the county was reviewing her eligibility for Medicaid.
“And if we don’t have Medicaid that’s going to be a big problem,” Greune said. “Now I’m really pissed off.”
‘Angst, Lots of It’
In early 2021, about a year after the first economic impact payments, known as EIPs, were distributed, the Social Security Administration issued what it called an “Emergency Message.”
It instructed staff on how to handle the payments and contained information that could have been useful to SSI beneficiaries.
“Develop and exclude the EIP from resources” — in other words, assets — “only when an individual alleges receiving and retaining an amount that may affect eligibility,” it said.
It also told staff to take beneficiaries at their word. “Accept the individual’s allegation,” it said.
Martin Helmer of Denver, 77, said that, when the Social Security Administration made a mistake involving his son’s benefits, the burden fell on him to speak up.
He said he felt he was treated as guilty until proven innocent.
“It was angst, lots of it,” Helmer said, “especially when I saw how hard-ass they were being about everything.”
Helmer manages the benefits for his 40-year-old son, Quinn, who has a mental illness. In July, the Social Security Administration sent a letter alleging in part that, since May 2021, Quinn had received more than $17,000 for which he was ineligible.
Going forward, the agency said, it would reduce his benefits.
Helmer concluded that the main issue was the COVID stimulus payments; other than Social Security benefits, that was the only money that flowed into Quinn’s account, he said.
Helmer, a retired auditor and IRS agent, spent several days studying an agency manual. He contested the agency’s action and won.
He worries how other people would fare — and how his son would manage without him.
“I think disabled people and their caretakers have maybe less energy than the average person to deal with something like this,” he said, “when they’re already dealing with a lot.”
Madison Carter of WSOC-TV in Charlotte, North Carolina, contributed to this report.
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.
