Social Security is reinstating its controversial plan to withhold 100% of people’s benefits if the agency has overpaid them. Last year, it began withholding 10% of funds it accidentally overpaid.
Changes to Social Security are on the horizon
Social Security recipients must brace for new changes on the horizon regarding updating their banking information. (Scripps News)
Scripps News
- The Social Security Administration (SSA) will resume withholding 100% of benefits from individuals who were overpaid until overpayments are recovered.
- The change reverses a temporary policy that limited withholding to 10%.
- For those beneficiaries currently reimbursing an overpayment, the withholding rate will not change, the agency said.
A new Social Security rule goes into effect this week.
No, not the change that may require you to go to a Social Security Administration office in person to enroll in benefits. That one kicks in later this month.
But starting on Thursday, March 27, the SSA will reverse its policy involving overpayments to recipients. Sometimes Social Security, which pays benefits to about 70 million people monthly, totaling about $1.6 trillion in 2025, pays a beneficiary more money than they should have gotten.
An overpayment can happen when a beneficiary fails to update a change in income, for instance. Or the SSA can incorrectly calculate benefits.
In an August 2024 report, the Social Security Administration’s Office of the Inspector General estimated the agency made nearly $72 billion in improper payments – mainly overpayments – during fiscal years 2015-2022. That accounted for less than 1% of all benefits paid during that period, but as of September 2023, the agency had $23 billion in uncollected overpayments, according to the report.
What’s the change coming this week?
For any Social Security overpayments that occur after March 27, 2025, the recipient’s future benefits will be withheld until the overpayment is reimbursed.
What if I’m already reimbursing an overpay?
For those beneficiaries currently reimbursing an overpayment, the withholding rate will not change, the agency said.
What about SSI overpayments?
The withholding rate for overpayments of Supplemental Security Income benefits will remain at 10%.
Social Security discontinues its more-lenient overpayment withholding plan
Last year, the SSA had opted to begin withholding only 10% of a recipient’s benefits to recoup overpayments as a way of “significantly reducing financial hardship on people with overpayments,” the agency said at the time.
The move came after Social Security faced negative media coverage in 2023 from KFF Health News and Cox Media Group Television Stations, as well as “60 Minutes” about how the agency went about collecting overpayments, some of which happened more than a decade ago.
Some beneficiaries lost their homes as benefits were cut off to make up an overpayment. “Innocent people can be badly hurt,” then-Social Security chief Martin O’Malley said, according to the Detroit Free Press, part of the USA TODAY Network.
The Social Security Administration sought to reclaim overpayments from about 2 million people in the fiscal year that ended September 2023, according to KFF and Cox Media Group, which acquired information about SSA overpayments in a Freedom of Information Act request.
If Social Security overpaid you, how do you pay it back?
Moving forward, any beneficiary found to have been overpaid will “automatically be placed in full recovery at a rate of 100% of the Social Security payment,” the SSA says. That means benefits will be docked until the overpayment amount is met.
“If someone cannot afford full recovery of their overpayment, they can contact Social Security at 1-800-772-1213 or their local office to request a lower rate of recovery,” the agency said in the notice.
The SSA says it will wait at least 30 days (plus five mail days) from the date it has sent an overpayment notice before starting to collect the overpayment.
You can repay the overpayment by credit card, online bill pay or check. For more information on repayment of overpaid benefits, visit the SSA website.
The SSA can also take money from your federal tax refund or garnish your wages if you were overpaid and are not getting benefits anymore or become delinquent in a repayment agreement, the agency has said. Delinquencies will be reported to credit bureaus.
Can you appeal a Social Security overpayment?
If you are sent an overpayment notice, you can appeal the decision or the amount, the agency says. Beneficiaries can also also ask Social Security to waive collection of the overpayment, if they believe it was not their fault and can’t afford to pay it back.
Why is Social Security changing its overpayment recovery process?
Consider it part of the overall plan President Donald Trump and the Department of Government Efficiency (DOGE), headed by Elon Musk, have to reduce federal spending. The Social Security Administration (SSA) has said it plans to cut its workforce by more than 12%, cutting 7,000 employees.
These “significant workforce reductions,” as the SSA described them, along with the closing of some offices could result in people facing a slowdown in the processing of benefits applications and longer waits for help from Social Security personnel.
The SSA’s switch to withholding up to 100% of a recipient’s benefits until it has recovered any overpayments will result in about $7 billion in overpayment recoveries over the next decade, the agency says.
“We have the significant responsibility to be good stewards of the trust funds for the American people,” acting Social Security commissioner Lee Dudek said in a statement. “It is our duty to revise the overpayment repayment policy back to full withholding, as it was during the Obama administration and first Trump administration, to properly safeguard taxpayer funds.”
How to avoid an overpayment of Social Security benefits
There are some steps you can take to avoid an overpayment, according to finance site NerdWallet:
- Stay up to date: Report your monthly income, marital status and any available resources that may affect the amount of your benefits. You can call the agency to update your information or access your my Social Security account online.
- Be alert: If your benefit increases and you do not know why, contact the agency. You can also call to ask how your benefits are calculated.
“Overpayments happen for several reasons, such as a beneficiary neglecting to update their income, marital status or work situation, or the SSA miscalculating how much it should pay,” NerdWallet advises. “Regardless of who is at fault, beneficiaries who receive overpayments from the Social Security Administration usually have to give back the money. Because taxpayer money funds Social Security benefits, the SSA is legally required to recover overpayments.”
Contributing: Kinsey Crowley, Joey Garrison and Medora Lee, USA TODAY and Susan Tompor, Detroit Free Press
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