In about 20 days, some Social Security recipients may notice changes due to a higher Social Security benefit adjustment.
According to KFF and Cox Media Group, around 2 million Americans found themselves overpaying this year to the Social Security Agency (SSA). Starting July 24th, the new wage adjustments will take effect until all overpayments are cleared up.
Why does this matter?
President Trump is implementing various reforms within the SSA.
One significant change involves phasing out paper checks by October. Trump has appointed Frank Vignano, the former CEO of Fiserv, to lead the SSA. Additionally, the agency has been tasked with reducing its workforce by 7,000 employees.
For those beneficiaries who have accidentally overpaid, the potential loss of Social Security benefits can severely impact their ability to cover basic needs.
The SSA estimates that roughly 21% of married couples and 45% of individual beneficiaries depend on Social Security for over 90% of their income.
What’s the deal?
In certain instances, the SSA mistakenly overpays Social Security recipients due to calculation errors or because recipients fail to report updated income information.
Back in March, the SSA announced a 100% recovery plan for beneficiaries who were overpaid. Under Biden’s administration, this recovery rate was initially set lower at 10%, which increased costs for many seniors.
However, this rate was adjusted to 50% in April.
The SSA stated in April, “If we find that there has been an overpayment on your Title II benefits, we’ll send a notice asking for full repayment and inform you of your right to request a reconsideration or waiver.” They typically allow 90 days for individuals to request reconsiderations or exemptions.
This 90-day window from the SSA’s April 25th statement closes on July 24th, affecting over 1 million recipients.
Those who have been overpaid can apply for an overpayment exemption.
Form SSA-632BK can be filled out to request forgiveness for overpayment if it causes financial strain. You’ll need to provide proof that repaying the money would result in serious hardship.
Beneficiaries can also submit Form SSA-561 to contest a claim of overpayment.
Newsweek reached out to SSA for additional comments.
What are people saying?
Kevin Thompson, CEO of 9i Capital Group and host of the 9innings podcast, mentioned to Newsweek: “Most recipients don’t realize they’ve been overpaid until they get that letter from the SSA. They might not even know about it, as they haven’t reviewed their financial history or benefits regularly. If the mistake wasn’t their fault, they shouldn’t have to repay it.”
What’s next?
For many Social Security recipients, losing income can be devastating, especially when most of their income relies on these benefits.
A recent Gallup report highlighted that 86% of individuals count on Social Security as a “major” or “minor” source of income.
Thompson added, “This outcome is particularly crucial for retirees. With inflation continuing to rise, a 50% reduction in benefits could seriously affect expenses related to housing, food, and healthcare. For many, Social Security is their sole income source, and these overpayments can turn into major issues.”
