On Friday, March 7, at 5 p.m., President Donald Trump’s Social Security Administration (SSA) announced a policy change that could financially devastate seniors.
The agency intends to reinstate a strict rule that withholds Social Security payments from beneficiaries who receive overpayments until the full amount is recovered, even if the overpayment was the agency’s fault.
This change reverses a Biden-era policy that limited the withholding rate to 10% of a recipient’s payment.
According to the new rule, the SSA will withhold 100% of a beneficiary’s payment if they owe money due to an overpayment.
According to a 2024 Congressional Research Service report, this move may result in some seniors losing their income, despite the fact that overpayments are frequently caused by agency errors rather than fraud.
Sen. Rick Scott (R-Florida) previously warned that a 100% clawback rate would bankrupt many seniors in his state.
In 2023, Scott wrote to the SSA, saying, “Social Security, not Florida seniors, should be held accountable for these errors.” However, Scott and other Republicans have been silent since the SSA’s announcement.
The policy rollback will go into effect on March 27, undoing changes made by former SSA Commissioner Martin O’Malley during the Biden administration.
O’Malley reduced the clawback rate from 100% to 10%, claiming that the majority of overpayments were due to agency errors or minor reporting issues by beneficiaries, rather than fraud.
Seniors can only avoid repayment by requesting a waiver through an SSA hotline or visiting a field office, but many field offices are now closed.
Elon Musk’s Department of Government Efficiency (DOGE) has advocated for the closures as part of a larger effort to reduce the SSA’s workforce by 7,000 employees.
At least ten field offices have already closed, with 47 more in 24 states scheduled to close.
DOGE also proposed eliminating phone services for claims processing, but the agency abandoned the idea after a Washington Post report.
However, with reduced staff and office closures, seniors will find it even more difficult to navigate the repayment process.
The SSA estimates that the new policy will save $7 billion over the next decade. Interim SSA Chief Leland Dudek, who has been working with the Trump administration and DOGE, defended the change, arguing that the agency is legally required to recover overpayments.
O’Malley criticised the move, claiming it would cause significant hardship for seniors.
“What they’re saying is that the person can fight their way into a crowded 800 number, or fight their way with a cane and a walker into a field office that, oh by the way, might be closed,” according to O’Malley. “It’s cruel-hearted and contrary to good conscience.”
Congressional Republicans have previously opposed a 100% clawback rate. In 2020, several Republican lawmakers argued that seniors should not be required to repay overpayments caused by government errors.
Reps. Jason Smith (R-Mo.) and Mike Carey (R-Ohio) advocated for limiting repayment obligations and making waivers more accessible in 2024. However, they have remained silent on the most recent SSA policy shift.
Meanwhile, Democrats have expressed strong opposition. Rep. John Larson (D-Conn.) introduced legislation to prevent office closures and protect Social Security data, but House Republicans opposed both measures.
Larson accused the administration of utilising the clawback policy to fund tax cuts for the wealthy. “Last year, Republicans demanded relief from clawbacks. “Where do they stand now?” Larson said.
Musk has previously referred to Social Security as “the biggest Ponzi scheme of all time” and claimed that entitlement programs such as Social Security and Medicare waste up to $700 billion per year, a figure far higher than official estimates.
An inspector general report found that improper payments totalled $72 billion between 2015 and 2022, accounting for less than 1% of total benefits paid during that time period.
O’Malley contended that the SSA’s new approach would result in more overpayment errors due to staffing cuts and a lack of oversight.
“It’s going to take longer for a depleted and gutted staff to catch up with the few errors that they make,” O’Malley told reporters.
Despite previous Republican opposition to the 100% clawback rate, GOP lawmakers have largely remained silent on the policy change.
Meanwhile, DOGE has recently offered buyouts to thousands of SSA employees as it continues to downsize the agency.