Millions of Americans who rely on Social Security checks are at risk of facing financial turmoil as the Social Security Administration (SSA) enforces a strict rule that requires full repayment of any overpaid benefits. Starting March 27, SSA will withhold 100% of monthly Social Security checks from beneficiaries who received overpayments. This rule is a reverse of the previous policy that limited clawbacks to just 10% of a beneficiary’s monthly benefit.
This abrupt policy change means that retirees and disabled individuals could lose their Social Security checks until the overpayments are fully paid. Although the SSA argues that recovering overpayments is a crucial step to safeguarding taxpayer funds, critics have warned that many beneficiaries could face financial hardships.
Why Millions Could Lose Their Social Security Checks
According to the law, SSA has the mandate to recover overpayments but recently, the process has been accused of mismanagement and errors. Overpayments occur when the agency mistakenly sends more benefits than a beneficiary is entitled to due to missing records, outdated information, or clerical errors by SSA employees.
Previously during Joe Biden’s era, a reform introduced in March 2024 limited repayment deductions to 10% of recipients’ monthly benefit to avoid subjecting beneficiaries to financial distress. However, Trump’s administration reversed this policy and restored the 100% withholding policy that was in place before 2024.
How Serious the Overpayment Issue Is
Although Social Security overpayment has affected less than 1% of all beneficiaries, the financial impact is still massive. According to a 2024 report from the SSA’s Office of the Inspector General, the agency paid out $71.8 billion in improper payments between 2015 and 2022 and most of this amount was overpayments.
Between 2020 and 2023, $13.5 billion in overpayments were made to the Old Age, Survivors, and Disability Insurance program. According to SSA, the new 100% withholding policy will enable it to recover around $7 billion over the next decade.
Frustrations on Seniors and Disabled Americans
Some people only realize that they have been receiving overpayments when they receive a shocking letter from the SSA demanding repayment of thousands of dollars. Some beneficiaries have reported receiving up to $10,000 and above without suspecting any errors.
According to the president of Social Security Works, Nancy Altman, most seniors trust the government to send them the correct amount. Such people get frustrated and desperate when they later get a letter saying that they owe the SSA $10,000 which is money they have already spent.
Withholding 100% of monthly Social Security checks means that affected recipients will not receive even a dollar from SSA until they have fully repaid the overpayments. This could result in evictions and homelessness since most seniors and disabled individuals fully rely on Social Security as their primary income.
These beneficiaries could also lose Medicare coverage since most seniors pay their Medicare Part B premium directly from their Social Security checks. If SSA withholds 100% of monthly checks to repay overpayments, low-income retirees and disabled individuals are likely to go through severe financial strain.
Actions Beneficiaries Should Take if Their Social Security Checks are Withheld
Beneficiaries who face Social Security check cancellations due to the recovery of overpayments should;
- Request a lower repayment rate- if you cannot afford to lose 100% of your Social Security checks, you should contact the SSA at 1-800-772-1213 or visit a local office and request a lower repayment amount.
- Request a waiver- if the overpayment was not your fault and you cannot afford to pay it back, you can apply for a waiver using SSA Form 632. The SSA will not withhold monthly payments while a waiver is under review.
- File an appeal- if you believe the overpayment is incorrect, you can file an appeal using SSA Form 561 to challenge the SSA’s decision.
- Seek legal or financial assistance- you can get assistance from Social Security Works and local legal ID groups to challenge unfair overpayment claims.
Although SSA must recoup overpayments to ensure it can perform its functions and also reduce waste and mismanagement of public funds, critics have warned that enacting the 100% withholding policy will cause many beneficiaries into severe financial constraints.