Social Security is bringing back a controversial plan to fix its mistakes by withholding people’s benefits. The agency had just sought 10% of funds it accidentally overpaid. Now it wants 100% repaid.
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If Social Security accidentally overpays you, be prepared to pay back the funds.
The Social Security Administration (SSA) will begin recouping 100% of overpayments to beneficiaries starting March 27, the agency said in a notice Friday. That’s a reversal of a March 2024 change to withhold only 10% of a recipient’s benefits in event of an overpayment to reduce “financial hardship on people with overpayments,” the agency said at the time.
That change came after the SSA faced criticism in 2023 – and disparaging media coverage from KFF Health News and Cox Media Group Television Stations and “60 Minutes” – about how it went about collecting overpayments, some of which happened more than a decade ago.
In some cases, people 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.
Now, the administration is reinstating the previous overpayment recovery strategy. That means as of March 27, any Social Security overpayments found will result in withholding of 100% of the recipient’s benefits until the overpayment is made up, the agency said.
The withholding rate will not change for those beneficiaries currently reimbursing an overpayment, the agency said. Also, the withholding rate for overpayments of Supplemental Security Income benefits will remain at 10%.
The change comes as President Donald Trump and the Department of Government Efficiency (DOGE), headed by Elon Musk, have sought to cut federal spending. The Social Security Administration (SSA) is planning reduce its workforce by more than 12%, cutting 7,000 employees, it announced on Friday.
As for the Social Security program, Trump has promised not to cut benefits. “Social Security won’t be touched, other than if there’s fraud or something. It’s going to be strengthened. But it won’t be touched,” he told Fox News’ Sean Hannity on Feb. 18.
Social Security: Fraud and overpayments
Trump and Musk have alleged widespread fraud in the Social Security program. During his speech to Congress on March 3, Trump mentioned “probable fraud,” with millions of benefit recipients over the age of 100 in the system.
But those claims are contradicted by a 2023 report from the nonpartisan inspector general for the Social Security Administration, which found about 18.9 million 100-plus aged people without death information in the agency’s records, but none were getting benefits.
Less than 1% of payments are improper and most are overpayments, found a July 2024 report from Social Security’s inspector general.
The agency is required to get back those overpayments, said Lee Dudek, the acting commissioner of Social Security, in the notice posted on the agency website. “We have the significant responsibility to be good stewards of the trust funds for the American people,” he wrote. “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.”
The change is expected to result in overpayment recoveries of about $7 billion in the next decade, according to The Office of the Chief Actuary, the agency said.
What is a Social Security overpayment?
Social Security pays out about $1.6 trillion in benefits each year to about 70 million people monthly. An overpayment involves a beneficiary getting more money than they should have gotten.
“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,” advises finance site NerdWallet. “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.”
During fiscal years 2015 to 2022, the agency paid out almost $8.6 trillion in benefits, but made $71.8 billion in improper payments, most of which were overpayments, according to the July 2024 inspector general’s report.
Another report by the agency’s inspector general, issued in 2022, found that 73,000 overpayments were the fault of the SSA due to lack of “effective controls over benefit-computation accuracy.”
If the agency determines a beneficiary has been overpaid, it will send them an overpayment notice.
If Social Security overpaid you, how do you pay it back?
Any beneficiary found to have been overpaid will “automatically be placed in full recovery at a rate of 100% of the Social Security payment,” according to Friday’s notice. 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 typically begins withholding from benefits about 60 days after notifying beneficiaries about 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 has said. 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.
How to avoid an overpayment of Social Security benefits
There are some steps you can take to avoid an overpayment, according to 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.
Contributing: Kinsey Crowley and Joey Harrison, USA TODAY and Susan Tompor, Detroit Free Press
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