The Social Security Administration has once more changed its stance on critical adjustments that might significantly impact the monthly earnings of certain recipients.
The agency announced that beneficiaries who have received overpayments will see their monthly benefits cut by 50% until the owed amount is repaid. This change took effect on April 25. This 50% rule is a departure from a March policy that had allowed recipients to keep 100% of their checks until the issue of overpayments was settled.
During the Biden administration, the maximum repayment limit was previously capped at 10% of the beneficiary’s check.
Legally, the Social Security Administration must pursue refunds for any overpayments. Earlier, the agency indicated that the 100% withholding approach could potentially save about $7 billion over the next ten years.
Critics have claimed that shifting from a 10% to a 100% withholding has caused financial hardship for some beneficiaries, arguing that problems with overpayments often stem from agency errors rather than the recipients themselves.
The overpayment rate impacts Title II benefits, which include retirement, survivor, and disability insurance. For supplemental security income recipients, who are typically low-income seniors or individuals with disabilities, the withholding rate remains at 10%.
You should know if you’re overpaying
The Social Security Administration will inform individuals about overpayments and the demands for repayment. Beneficiaries then have 90 days to request a waiver or seek a lower repayment amount. If no waiver is requested or granted, the agency will begin withholding 50% of monthly checks until the overpayment is resolved.
According to recent reports, out of the total $8.6 trillion in benefits disbursed from 2015 to 2022, around $71.8 billion—less than 1%—were deemed improper payments, which include overpayments.
