Kotlikoff: How Social Security is Conning Seniors

A Social Security Application Mistake Or A Malicious Policy With Frightening Consequences?

Richard has spent over 80 hours trying to fix this problem. He has other concerns. His wife is seriously ill. The stress of Social Security’s “mistakes” is taking a major toll on both him and his wife.

I received an email from Richard C Klesse, of 4 Christy Wayy, Neshanic Station, New Jersey, 08853 who was born on November 28, 1949 and turned 70 this past November. In September, Richard called Social Security and spoke to the Clifton, NJ office to a Ms. Tennell. He asked Ms. Tennell to initiate his retirement benefit when he turned 70, i.e., starting last November. Ms. Tennell tried to bribe Richard to take his retirement benefit early, offering to provide him a six month retroactive payment. Richard firmly said no. He realized that this was a high class government con job (my term, not his), which would entail getting more money in the short run, but reducing his lifetime benefits.

I use the word con job because Social Security had a policy and, as far as I know still has a policy, of calling people close to 70 and making them an “offer” to start their benefits retroactively. Doing so saves Social Security money, but hurts the recipients. The bribe comes packaged with suggestions that if they die they won’t get their checks, so why not grab six months of benefits for sure.

I don’t know precisely what Ms. Tennell told Richard. But, presumably, there is a recording. If she pushed him to do this and knew not to, she should be fired. Social Security is not supposed to give people “advice.” I presume Ms. Tennell was just telling Richard his options. In any case, Richard struck to his guns, insisted on having his retirement benefit begin November 2019 (with the first check to be received in December 2019 as Social Security pays a month in arrears).

Ms. Tennell got off the phone and immediately specified the opposite of what Richard had requested. She specified his retirement benefit should begin not six months before he turned 70, not six months before he called in September, but nine months before he called, namely all the way back to January 2019. If Ms. Tennell has made this “mistake” in the past, she should be fired immediately. It’s easy enough for Social Security to check its records. It’s also easy enough for Social Security to issue a warning to its staff, “Two strikes and you’re out.”

Thanks to Ms. Tennell incompetency or malevolence or presumption that she knew better than Richard, he entered Social Security hell, which he’s spent weeks trying to climb out of. The Social Security hell morphed into Medicare hell and, will, not doubt, morph into federal income tax hell and then state income tax hell.

Thanks to Ms. Tennell’s mistake, Richard received a lump-sum payment in October for 9, not six months of past benefit but for since months. The check was directly deposited into his bank account. He immediately realized this was wrong. Yes, the check felt nice, but he realized it came with permanently reduced benefits for the rest of his life.

Richard went to the Bridgewater, New Jersey office on October 8th and asked what to do. He filed a form to withdraw his initial benefit application, indicating in the form to start his “new” retirement benefit as of November 2019. They said he needed to repay the lump sum, but to wait to get a letter from the Mid Atlantic Program Service Center in Philadelphia. The letter arrived December 3rd. On the same day, Richard mailed Social Security a check for precisely the lump sum amount including a copy of the letter.

Social Security made no payments to Richard apart from the lump sum. But in October, Social Security stopped automatically deducting Richard’s Medicare Part B premium from his checking account. Had he not realize this and began sending Medicare the premium directly, he would have lost his benefit.

It took Social Security till January 10th to cash Richard’s check. Social Security doesn’t talk to Social Security. This ensures the system can wreak maximum havoc on people’s lives. On February 20th, Richard received a letter from Social Security indicating they could pay him the right amount. The letter didn’t say they would pay him. It didn’t ask for any response. Richard wrote back the same day telling Social Security to immediately initiate the correct payment and to send him a corrected 1099, since he had received a 1099 indicating he owed federal and NJ taxes on the lump sum he’d incorrectly received.

Meanwhile, Richard received no retirement benefits or any other payments from Social Security. On March 31st, Social Security wrote telling Richard that he’s received an overpayment of $16,082. This corresponded to the lump sum less four months of the correct benefit amount. There was no indication that he’d repaid the lump sum. Instead, the letter said he’d been overpaid. It also said they’d would pay him his full check for two months (April and May) less the Medicare Part B premium for two months and then stop making payments to Richard until the overpayment amount had been cleared. The letter never mentioned Richard’s needing to pay his Medicare Part B premium on his own while his “overpayment” amount was being cleared.

In sum, Social Security tried to rip off Richard, whether Ms. Tennell did this innocently or intentionally. He was smart enough to catch this. They have now screwed up their payments to him of his correct benefits. He received no Social Security benefit for November, for December, for January, for February, or for March. They have screwed up their reporting to the IRS. He now owes far more federal and NJ state income taxes for 2019 than is correct. Social Security has not sent either entity corrected 1099s. And Social Security has put him at risk of losing Medicare coverage, which would have happened had he not realized they had told Medicare to stop withdrawing his Part B premium automatically from his checking account.

I’m hoping that someone senior at Social Security reads this, checks on Ms. Tennell’s recent and past actions, comes up with a system to make sure this NEVER happens to anyone else again, stops its officially-sanctioned con job, and, at long last, fixes all aspects of Richard’s case. They owe him a phone call and assigning him someone who he can contact and who will fix all aspects of his case.

Richard is not special. These problems are happening all the time. Talk to any member of Congress. They will tell you they have hired full-time staff just to deal with Social Security’s gross incompetence on behalf of their constituents.

Richard has spent over 80 hours trying to fix this problem. He has other concerns. His wife is seriously ill. The stress of Social Security’s “mistakes” is taking a major toll on both him and his wife. Older people have enough to worry about these days. They shouldn’t have to face bureaucratic torture at the hands of Social Security staff who should learn loud and clear that they’ll be fired if they continue to make “minor” mistakes, which produce massive damage to the lives of people who pay their salaries.

Read the original article on Forbes.com