Treasury Department Halts Collection of Old Social Security Debt
On May 12, 2017, the Social Security Administration (SSA) issued an Emergency Message regarding the Treasury Department’s ability to collect old Social Security debt from individual’s tax refunds. The message stated, “Effective immediately, we will not refer to TOP [the Treasury Offset Program] Title II, Title VIII, or Title XVI debts that have a delinquency of May 19, 2002 or earlier.”
Before the issuance of this Emergency Message, debts incurred after an overpayment by SSA to individuals or their relatives could be collected by having their tax refunds withheld. This practice began in 1996 when Congress first allowed SSA to garnish tax refunds and other administrative offsets to pay debt owed to Social Security due to overpayment. However, at that time, there was a ten year statute of limitations that prevented the Treasury Department from withholding tax refunds after 10 years. In 2008, Congress removed the statute of limitations and debts incurred more than 10 years ago could be referred to TRO.
Although the Emergency Message halts the collection of Social Security debt from before May 19, 2002, more recent debts can still be offset by withholding tax refunds. The Emergency Message also stated that the Social Security Administration will be issuing more instructions on how to implement this change in policy.
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