It’s like a horror movie for your finances: Decades after spending thousands in benefits, some Americans are being asked to pay the government back.
The haunting phenomenon, dubbed “zombie debt” in a recent Guardian exposé, is the government’s attempt to recoup money it erroneously paid in public benefits — something that’s happening more and more to senior taxpayers.
But for many people, such as 72-year-old Dreama Richardson, the benefits were spent so long ago,they have no idea how they’ll fight the nightmarish debt.
In September 2018, Richardson received a concerning letter from the Illinois Department of Human Services (IDHS): In the late 1980s, she’d unknowingly been “overissued” $4,132 in cash assistance and food stamps.
Although she had been slowly paying it back in seized tax returns for years, now the state wants the remaining $1,323 — in the next 60 days — or part of Richardson’s only source of income, her Social Security check, will be withheld.
“I didn’t understand,” Richardson, a Steger, Illinois, resident, told The Guardian. “How do you argue with the government? How do you prove something from 30 years ago?”
In Richardson’s case, the government claimed the mother of three had received benefits she wasn’t eligible for, since her then-teenage daughter’s earnings from her part-time job at Taco Bell brought the household income beyond the public assistance earning cap. But Richardson’s daughter was not living with her mother while she was working for Taco Bell, the UK outlet reports.
A hearing officer still sided with the state, arguing that Richardson needed to appeal within what they contended to be 90 days of first notice — back in 1989, before she realized the debt even existed.
In recent years, rates of government zombie debt have increased exponentially. In 2010, IDHS sent out 7,699 overpayment notices; in 2017, they sent out 32,881.
According to the Guardian, the following three pieces of federal legislation, passed in 2008 and 2010, are largely the reasons why:
- The Farm Bill: allowed for overpayments more than 10 years old to be collected.
- The Claims Resolution Act: A provision within the law allowed for the “collection of past-due, legally enforceable state debts”; debts caused by unintentional errors could be referred to the US Treasury, in addition to ones due to fraud.
- The Affordable Care Act: required states to streamline and consolidate their processes for determining public assistance eligibility through digital programs.
The Guardian cites significant changes to the public assistance system in the mid-’90s that more broadly allowed overpayments to be considered debt, even if an agency was at fault. Technology is also to blame, for creating a faceless, automated, extremely efficient system excellent at identifying and charging individuals for debt in a Kafka-esque manner.
“It’s robbery,” Richardson’s daughter Star tells the Guardian, “from our most vulnerable people — our seniors. And it’s just not right.”
