Starting next month, some Americans will see a significant reduction in their Social Security checks as part of an effort by the Social Security Administration (SSA) to rectify overpayments that have been occurring since 2015. The reduction will increase the current withholding percentage from 10% to 50% for individuals who were overpaid. The overpayments were attributed to miscalculations and instances where recipients failed to report changes in their income.
This new measure is part of the SSA’s ongoing attempts to recover funds that were distributed in error. An August 2024 report from the SSA’s Office of the Inspector General revealed that nearly $72 billion in improper payments were made during the fiscal years 2015-2022. The withholding increase aims to address these financial discrepancies and ensure the integrity of the Social Security program.
Some Americans will start receiving smaller payments in July due to Social Security changes aimed at reclaiming overpayments. The Social Security Administration (SSA) will begin withholding 50% of benefit payments to overpaid recipients. Overpayments can occur when beneficiaries fail to report changes in income or when the SSA miscalculates benefits.
Withholding adjustments for overpayments
Social Security paid out nearly $72 billion in improper payments between fiscal years 2015-2022, most of which were overpayments. As of September 2023, the SSA had $23 billion in uncollected overpayments.
Previously, the SSA withheld only 10% of a recipient’s benefits to recover overpayments, but it faced criticism over its collection process. Negative media coverage in 2023 highlighted how some people lost their homes after benefits were cut off to recover overpayments. In response, the SSA initially planned to withhold all of a recipient’s benefits but later reduced the amount to 50%.
Under the new policies, the SSA will begin issuing overpayment notices on April 25, 2025, and will start withholding 50% of recipients’ benefits about 90 days later, around July 24. Beneficiaries can repay overpayments by credit card, online bill pay, or check. Additionally, recipients can request a waiver if they believe the overpayment was not their fault or if they cannot afford to repay it.
For more information on the repayment of overpaid benefits, recipients are encouraged to contact the SSA directly.