Social Security Reinstating 100 Percent Monthly Recovery Rate for Overpayments

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The SSA said its chief actuary estimates the change will save about $7 billion over the next decade.

The Social Security Administration (SSA), as of March 27, will again start holding back 100 percent of a beneficiaryโ€™s monthly benefits to recover overpayments.

Prior to March last year, when the SSA overpaid a beneficiary, the department withheld 100 percent of the recipientโ€™s monthly benefits until the overpaid amount was recouped. On March 29, 2024, the Social Security Administration said it was changing the withholding rate, with the agency only collecting 10 percent of monthly benefits or $10, whichever is greater, for recovering overpayments.

On March 7, SSA announced it is ending this policy and reverting back to the original policy.

The agency said it โ€œwill increase the default overpayment withholding rate for Social Security beneficiaries to 100 percent of a personโ€™s monthly benefit.โ€

The SSA said its chief actuary estimates the change will save about $7 billion over the next decade.

The updated withholding rate only applies to new overpayments. The withholding rate for overpayments made before March 27 will not be affected and will continue with the 10 percent or $10 policy.

Rep. John B. Larson (D-Conn.) criticized the SSA move, highlighting that overpayments are typically not the fault of beneficiaries. The new policy would result in many overpaid recipients losing their entire monthly benefits, he said.

โ€œMany Social Security beneficiaries already struggle to make ends meet. Their benefits are what allows them to put food on the table, keep a roof over their heads, and put gas in their cars.โ€

Lee Dudek, acting commissioner of Social Security, justified the policy reversal, saying the agency has a โ€œsignificant responsibility to be good stewards of the trust funds for the American people.โ€

โ€œIt is our duty to revise the overpayment repayment policy back to full withholding, as it was during the Obama administration and first Trump administration, to properly safeguard taxpayer funds.โ€

Beneficiaries Pressured

SSA said it mostly disburses the correct amount, but when overpayments are made, the agency is legally obliged to claw it back.

Those who cannot afford the 100 percent rate of recovery for overpayments can contact the department to request a lower recovery rate.

Beneficiaries are allowed to appeal overpayment decisions made by the SSA, including requesting a waiver if they are incapable of paying back and believe the overpayment was not their fault.

Byย Naveen Athrappully

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