The Social Security Administration (SSA) has recently changed its policy regarding the recovery of overpayments. The agency will now withhold 100% of a beneficiary’s monthly check until any overpayment is fully repaid. This is a significant shift from the previous policy, which withheld only 10% of each check to recover overpayments.
Lee Dudek, the acting commissioner of Social Security, stated that the new policy is intended to ensure the integrity of the SSA’s programs and the responsible use of taxpayer funds. “We are dedicated to recovering overpayments while providing individuals with the necessary information and options to address their debts,” he said. The new withholding rate will only apply to new overpayments identified after March 27, 2025.
Overpayments identified before this date will continue to be repaid at the 10% withholding rate. Additionally, the withholding rate for Supplemental Security Income (SSI) overpayments will remain at 10%. SSI beneficiaries typically include individuals living with disabilities or low-income senior citizens.
Federal officials estimate this change will save approximately $7 billion over the next decade. The agency reported that between 2015 and 2022, about $71.8 billion in improper or overpaid benefits were paid, representing less than 1% of the $8.6 trillion paid to beneficiaries.
Withholding full benefits for overpayments
Beneficiaries who face an overpayment have options. They can appeal the overpayment amount or repayment decision or request a waiver if they believe the error wasn’t their fault or if repaying it would cause undue hardship. During an appeal or waiver process, repayment withholdings are paused, allowing individuals to continue receiving their benefits until the issue is resolved.
Beneficiaries can also contact the SSA at 1-800-772-1213 to request a lower withholding rate, though approval is not guaranteed. U.S. Representative Emilia Sykes has called on the SSA to reverse this policy change. In a letter addressed to Acting Commissioner Dudek, Sykes requested that the overpayment recovery rate be restored to the previous level of 10%.
“Social Security payments are often a recipient’s only source of income, and denying someone their monthly income means they may be forced to skip meals, forgo buying essential medicine, or lose their housing,” Sykes wrote. “To hold seniors responsible for mistakes made by the Social Security Administration is a cruel and inhumane response.”
Sykes highlighted that the SSA contacts over 1 million Americans annually to recoup mistakenly disbursed funds. She stated that the agency has not provided Congress with sufficient data on the total number of people affected by this change.
In response to these issues, Sykes introduced the Protecting Americans from Social Security Clawback Act last year. This bipartisan legislation aims to prevent the SSA from collecting overpayments made more than three years before notifying the beneficiary. This policy change reminds beneficiaries to be vigilant about their benefit payments and immediately address any discrepancies to avoid potential financial difficulties.
Image Credits: Photo by Towfiqu barbhuiya on Unsplash
