Starting in July, some Americans will notice a decrease in their Social Security payments. But it’s not due to any crisis—though many individuals are understandably concerned. The Social Security Administration (SSA) is working to recover overpayments made in the past.
Overpayments can occur if beneficiaries fail to report income changes, leading to excess payments from the SSA. Sometimes, the agency may miscalculate a person’s benefits, too. According to a report from the SSA’s Office of Inspector General from August 2024, the agency issued nearly $72 billion in erroneous payments between 2015 and 2022.
These inappropriate payments constituted less than 1% of the near $8.6 trillion in total benefits disbursed. As of September 2023, the SSA reported $23 billion in overpayments that had yet to be recovered.
What changes are coming to Social Security payments in July?
Beneficiaries who were overpaid may see their monthly Social Security benefits cut by half beginning in late July. In April, the SSA announced that it would withhold 50% from those receiving overpayments. This is a shift from an earlier plan to withhold all benefits until overpayments were paid back, which had drawn significant criticism.
Before this change, the agency only withheld 10% of benefits for repayments, a rate they adopted in 2023 following negative media portrayals of their collection methods. Former Social Security Director Martin O’Malley remarked that “innocent people can get seriously hurt” in the process.
In the fiscal year ending September 2023, the SSA embarked on attempts to recover overpayments from around 2 million individuals.
How can you repay an overpayment to Social Security?
Under the new policy, starting April 25, 2025, the SSA will issue overpayment notices and begin withholding 50% of benefits roughly 90 days after that date, which would be around July 24.
Repayment can be made through various methods, including credit cards or checks. More information about the repayment process can be found on the SSA’s official website.
Additionally, if you believe the overpayment was not your fault or if repaying poses a financial hardship, you can apply for a waiver to avoid repayment.
