November 28, 2007 - The Social Security Administration is an agency that is tasked with looking after the financial interests of retired and disabled Americans. For many, Social Security offers their only source of income. Therefore it may come as a surprise to learn that the agency appears to be routinely misleading the heirs of Social Security recipients into believing that money already paid to someone who is deceased has to be paid back to SSA. They are counting on the idea that heirs don't know how Social Security actually works.

You may assume that if you retire on your 65^th birthday that you are immediately eligible for Social Security. That is not the case at all. In fact, you are not eligible to receive Social Security payments for your birthday month in the year that your payments begin.

You may also assume that Social Security payments are made at the beginning of each month. They are not. Social Security recipients are actually for the prior month. In order to understand this, here is an example.

Let's say that your birthday is on December 3, 2007 and that you intend to file for Social Security on your birthday.  Although existing Social Security recipients will receive their December payment around the 1^st of January, you will not receive any payment. This is because your birthday is in December. Therefore you do not qualify to be paid for that month. Instead, January will be your first month of eligibility. This means that you won't receive your first Social Security check until February. It also means that Social Security is always a month behind in its payments.

The Social Security Administration knows all of this. Even so, ACCESS has learned that the agency routinely sends out letters to the heirs of Social Security recipients telling them that they have to return the money's paid to the deceased in the month that they died. But because the agency makes payments a month late - as previously noted - any monies already paid should not be returned.

One of the people interviewed for this article who asked that her name not be published told me that when her father died, her mother received a form letter from the Social Security Administration telling her to give back the monies paid in the month her husband died. When she contacted the SSA and told them to hold their horses - that the check cashed before his death was actually for the prior month - the SSA representative asked her how she knew that? The SSA backed down.

Three years later, when her mother died, the SSA tried again to have the last payment they made to her returned. In this case, the agency actually charged the money back through her bank account. They eventually had to return it.

The SSA appears to routinely charge bank accounts directly for funds that have already been deposited. These funds are only returned when the agency is challenged by heirs. The key is that anyone receiving a demand letter or who is dealing with a bank account that has already been charged back is to know how Social Security actually works and to challenge the SSA using their own rules.

It should be noted here that Social Security recipients are not eligible to receive a payment for the month they die in. For instance, if you were to die in December but still receive a check in January (after your death), that check would have to be returned.

Perhaps not surprisingly, a call made by ACCESS to the SSA for comment on this story was not returned.  Simply put, the SSA appears to be stealing. The fact that the agency is sending out form letters demanding repayment of monies which are not owed to them indicates that the practice is widespread.

ACCESS is advising anyone responsible for the estate of a Social Security recipient to challenge demands from the SSA for repayment. While some repayment claims are legitimate, clearly others are not. By the same token, you can't simply ignore a letter from the SSA demanding repayment. Doing so could result in having the funds charged back directly out of the deceased's bank account.

by Jim Malmberg

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