The US Social Security Administration (SSA) is making it simpler for seniors and others to repay benefits they received in error. Beneficiaries who were mistakenly overpaid will see a reversal of a policy from March. Under this new rule, 50% of the excess amount will be deducted from their monthly payments until the amount is fully repaid, moving away from the previous 100% deduction per payment.
This change, which came into effect on April 25, reflects a shift from a policy enacted last year that allowed for 10% deductions per check. The stricter 100% rule was established during the administrations of Presidents Obama and Trump.
Interestingly, this update wasn’t formally announced; instead, it was mentioned in an “Emergency Message” posted for SSA employees on their website. A spokesperson for the agency hadn’t responded to inquiries about the changes as of Tuesday.
The committee responsible for overseeing Social Security and Medicare had previously criticized the 100% rule, pointing out that beneficiaries often ended up with little or no funds for months while sorting out overpayments.
Martha Shedden, the president and co-founder of the National Association of Registered Social Security Analysts, remarked, “50% is better than 100%, but I think 10% would be even better.” She advocates for older adults, noting that Social Security checks form a significant part of their retirement income. Losing a substantial amount due to overpayment can be quite tough, she added.
As for the scale of the overpayment issue, in the fiscal year 2022, overpayments amounted to around $6.5 billion, which is about 0.5% of all benefits. The SSA aims to pursue recovery of these payments, projecting approximately $7 billion over the next ten years.
Overpayments can arise from various errors within the SSA’s database, including beneficiaries failing to report life changes, like a spouse’s death. Bill Sweeney, Senior Vice President of Government Affairs at AARP, emphasized the need to address these mistakes fairly and supportively.
Who is affected by the 50% rule?
Importantly, this updated policy only impacts Social Security overpayments occurring after April 25, including retirement, survivor, family, and disability benefits. Previous overpayments will still adhere to the older 10% rule.
What should someone do upon receiving an overpayment notice?
Shedden advises that once a beneficiary receives an overpayment notice, they should respond immediately—whether to appeal or seek a hearing. Ignoring the notice isn’t a good idea. They can reach the SSA at 800-772-1213 or visit their local office.
Additionally, beneficiaries may request a waiver for the recovery of overpayments if they feel it wasn’t their fault or if they’re unable to repay. The SSA typically puts recovery efforts on hold while appeals or requests for exemption are pending.
Further information can be found on the SSA’s official site regarding this process.
