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IPFS News Link • Government Debt & Financing

Social Security won't seize tax refunds to collect old debts

• http://www.foxnews.com-Associated Press

Social Security Commissioner Carolyn Colvin suspended a debt collection program last spring in which thousands of people had tax refunds seized to recoup overpayments that happened more than a decade ago. Members of Congress complained that some people were being forced to repay benefits they received decades ago as children.

Following a review, the agency said Monday it will continue suspending the program this tax season while officials explore possible changes.

"The commissioner is concerned about the public perception about the way we're running this program," said Pete Spencer, Social Security's deputy commissioner for budget, finance, quality and management.

There is a catch: The debts won't go away. Eventually, when the debtors start receiving retirement benefits, Social Security can deduct the debts from their payments.

"We are bound by federal law to collect these debts and they don't go away," Spencer said.

The collection program was authorized by a 2008 change in the law that allows Social Security and other federal agencies, through the Treasury Department, to seize federal payments to recoup debts that are more than 10 years old. Previously, there was a 10-year limit on using the program.