Changes to Social Security Payments Due to Overpayment Recovery

Many Americans are now facing cuts to their Social Security payments by as much as 50% due to a new overpayment recovery policy.

Starting in late July, the Social Security Administration (SSA) will begin withholding up to 50% of monthly benefits from beneficiaries who were previously overpaid.

These overpayments typically happen when beneficiaries don’t report changes in their income, leading to adjustments in their monthly benefits.

The agency will keep withholding this amount until the entirety of the overpayment is recouped.

This policy was reinstated after a temporary halt during the pandemic when overpayment withholdings were suspended, but the previous 10% rate was much less impactful.

In March, the SSA announced plans for a 100% withholding rate, meaning that those overpaid would see no benefits until the debt was cleared. However, in April they revised this to a 50% withholding rate.

When to Expect Payments

Monthly benefit checks vary based on the recipient’s birth date.

For those born between the 1st and 10th, benefits will be available on the second Wednesday of each month. If you fall between the 11th and 20th, you’ll receive your check on the third Wednesday. And for those born between the 21st and 31st, it’s the fourth Wednesday.

For instance, in July, some recipients got their checks on July 9, while others will collect theirs on July 16 or July 23.

However, there are exceptions. Those who have been receiving Social Security benefits since before May 1997 and those receiving both Social Security and supplementary security income will get their checks earlier in the month.

Members of these groups typically receive their SSI on the first of each month, followed by Social Security benefits a few days later.

The SSA publishes a detailed schedule of 2025 benefits available on their website.

Benefit Increases for 2025

In October, the SSA revealed a 2.5% cost-of-living adjustment (COLA) for 2025, resulting in an approximate $50 increase in monthly benefits for millions of Social Security recipients.

This increase is the smallest since 2020, when monthly benefits rose just 1.3%. Generally, adjustments have been more consistent in the past.

The COLA is calculated based on the consumer price index for urban wage and clerical workers (CPI-W), using average data from July, August, and September.

The inflation during these three months is averaged and compared to the third quarter of the previous year, determining the COLA rate for the following year.