Getting supercharged by Social Security will soon come at a high cost, and the agency says it will be on Friday Reviving the plan Get 100% of the beneficiary's monthly check and refund money from the current 10% fee.
Policy changes highlight the issues that have caused Economic difficulties For some beneficiaries in the past few years, the Social Security Administration has urged under the Biden administration to limit clawbacks to 10% of people's monthly benefit checks.
But the Trump administration's reversal could lead to a deep financial burden for some older people who have been caught up in the overpayment issue. Overpayments are rare, but often it can come as a surprise to the beneficiaries, considering that it is often the result of a social security miscalculation and it is difficult to know if you are overpayment.
“People generally don't know that they're overpaying — you were receiving benefits, assuming the government was giving you the right amount,” the president of Social Security Works, an advocacy group for its profits, told CBS MoneyWatch. “When people get a letter from the government saying, 'You're not borrowing $10,000,' people are really desperate. ”
The Social Security Administration did not respond to requests for comment.
Here's what you need to know.
How many people get overpaid from Social Security?
Less than 1% of Social Security Agency payments are what government agencies call “inappropriate,” which can include both over-wage and under-wage. 2024 Report From that inspector. As the report noted, that's a small share of $1.6 trillion in benefits each year, but still billions.
Between 2015 and 2022, the Social Security Administration paid about $72 billion in inappropriate payments. Most of it was overpaid, the report says. This represents 0.84% of total Social Security payments over that period.
How do overpayments occur?
Agents say that it is usually caused by two problems.
- Beneficiaries do not update revenue data or warn agents about other changes
- Social Security employees do not update beneficiary records in a timely manner
Beneficiaries may not understand that due to the complexity of the Social Security system, they need to update their agents with new information. 20,000 pages ruleThe inspector said in his 2024 report.
Also, SSA employees who sometimes have to manually calculate complex benefits, make mistakes, the report added.
However, seniors may receive “strategic overpayments,” said Ed Weir, former Social Security manager who runs the YouTube channel.
In a recent webcast on the issue, Weir said that older people who are exposed to full retirement age but still work after claiming Social Security may not be sure they will hit the $23,400 revenue limit. Under that rule, social security is provided. Please reduce your $1 benefit For every two dollars of revenue above that threshold.
Some seniors decided, “I'll put it on because I don't know if it'll pass until November or December.”
However, seniors who currently choose to “strategic overpayment” could end up losing a month or two profit due to the new clawback policy, Weir added.
When will the new policy come into effect?
The SSA said it will begin claiming 100% of benefit checks to cover new cases of overpayments that begin on March 27th.
Withholding rates for those who were supercharged by March 27 remain at 10%, similar to the rate of supplementary security income overpayment, a program for low-income seniors and disabled Americans.
What happens to Medicare if your Social Security Checks go backwards?
Medicare coverage could be another pitfall for older people whose benefits checks are eligible for 100% clawback, experts said. That's because most seniors pay Medicare Part B premiums by automatically deducting them from Social Security monthly checks.
The Social Security Administration did not respond to requests for clarification on the issue.
It is unclear whether seniors will have to arrange for Medicare Premium payments through a separate payment system or whether they will allow the SSA to pay medical bills first before regaining the remaining money, said Altman of Social Security.
“If you're using Medicare, you could lose Medicare because it means you might not pay Medicare,” Weir said. “It's a trickle-down effect.”
What if clawback causes financial difficulties?
Before the Biden reforms, before plastering clawbacks on 10% of people's benefits checks, some Americans faced financial difficulties after receiving the shock bill. Thousands of dollars. There were some people there I'm driven by homelessness KFF reported in 2023.
Beneficiaries are entitled to request through exemption from overpayment recovery SSA Form 632Weir pointed out.
“To give up payment you have to meet two things: No. 1, that's not your fault.
You can also sue for overpayment in case you think the overpayment amount is wrong or you don't agree that it is overpayment. SSA Form 561.
Finally, if you are unable to meet your living expenses to pay back, you can also request a different payment amount, says SSA.
“In Social Security, if you do not agree to the decision, please appeal,” Weir said on the webcast. “Always show everything.”
