The Social Security Administration (SSA) has announced a significant policy change that will impact millions of beneficiaries. Beginning March 27, 2025, the Social Security Administration will begin withholding 100% of monthly benefits to recover overpayments.
This decision returns the agency to its previous approach, which was modified in 2024 to a 10% withholding rate in response to widespread public concern.
Why is the SSA reinstating full benefit withholding?
The SSA defends the change by emphasizing its responsibility to ensure the integrity of Social Security trust funds. Acting Commissioner Lee Dudek stated that recovering overpaid benefits in full is consistent with the agency’s responsibility to manage these funds efficiently. According to SSA estimates, this policy change will result in a recovery of nearly $7 billion over the next 10 years.
How will this impact Social Security beneficiaries?
Starting March 27, 2025, any new overpayment cases will result in a 100% withholding of monthly benefits until the full amount is recovered. This means that some recipients may lose their entire Social Security check, which could cause financial hardship.
However, there are two major exceptions:
- Overpayments identified before March 27, 2025, will still adhere to the 10% withholding rate.
- Supplemental Security Income (SSI) recipients will continue to have only 10% withheld.
Can affected beneficiaries request a lower withholding rate?
Yes, if a beneficiary is unable to manage full withholding, they can request a lower recovery rate by calling the SSA at 1-800-772-1213 or visiting their local SSA office. Additionally, recipients can:
- Appeal the overpayment decision if they believe it was made in error.
- Request a waiver if the overpayment was not their fault and they cannot afford to repay it.
- Pause recovery efforts while an appeal or waiver is under review.
What led to the previous reduction in 2024?
The SSA reduced the default withholding rate to 10% in March 2024 in response to complaints about beneficiaries receiving unexpected bills demanding repayment within 30 days, sometimes totaling tens of thousands of dollars. If they were unable to pay, their entire monthly Social Security check was withheld, causing significant financial hardship (SSA Blog).
How common are Social Security overpayments?
Overpayments happen due to:
- Errors made by the agency in calculating benefits.
- Not reporting changes in income.
- Fraudulent claims from some recipients.
According to a 2022 report from the SSA Inspector General, incorrect benefit calculations resulted in 73,000 overpayments. Furthermore, from 2015 to 2022, the SSA issued nearly $72 billion in improper payments, an average of $9 billion per year (GAO Report).
What concerns do experts and advocates have?
Advocacy groups, such as the National Committee to Protect Social Security and Medicare, warn that withholding full benefits could cause serious financial hardship for seniors and disabled people, especially those who are unaware they have been overpaid.
Some beneficiaries have reported receiving unexpected overpayment notices for up to $40,000, with only 30 days to respond before their payments were suspended (CBS News).
What should beneficiaries do next?
If you get an overpayment notice, here’s what you can do:
- Check the accuracy of the overpayment claim by reaching out to the SSA.
- File an appeal if you disagree with the determination
- Request a waiver if repaying the debt would create undue hardship.
- Negotiate a lower repayment rate if full withholding is not feasible.