The Social Security Administration (SSA) has recently undone a Biden-era policy put in place by the previous Social Security Commissioner that dealt with the matter of benefits that had been overpaid for a number of various reasons.
An announcement from the SSA in early March revealed that the agency would begin withholding100 percent of a recipient’s benefit if they were found to have an overpayment balance. This could, of course, spell major trouble for the retirees and disabled individuals who are reliant on these monthly checks to make ends meet.
Subsequently, it appears that the agency has decided to back off from making such a harsh change to its system and will instead only withhold 50 percent of the benefit if there is an overpayment balance.
Social Security benefits slashed in half under Trump Administration
According to an “emergency message” to staff made on April 25, the agency will now default to withholding “50% of old-age, survivors, and disability insurance benefits.”
It has long been standard practice for the SSA to halt benefit payments so as to offset the billions of dollars that go out by mistake. Individuals reliant on Social Security are already quite vulnerable and often live quite close to the poverty line, and as such, under the Biden Administration, a policy to provide relief to beneficiaries was put in place which had the clawbacks capped at 10%.
This revision is another in a string of changes being enacted within the SSA under the new Trump Administration which includes mass cutbacks resulting in a downsizing of the SSA workforce, and a threat from the current acting commissioner to essentially shut down the agency entirely.
As such, this emergency message related to the SSA’s practice of sending beneficiaries more money than the stipulated claim amount and then — often years later — they would demand the money (which would have now ballooned to thousands of dollars per person) back. This leaves an already vulnerable individual in debt through no fault of their own.
Beneficiaries are struggling
Some news organizations have found that these clawbacks have left some recipients homeless. A 2023 investigation by KFF Health News and Cox Media Group further found that “millions of beneficiaries, including people struggling to get by on monthly checks, have received overpayment notices.”
After discovering these reports, Martin O’Malley, backed by President at the time, Joe Biden, made a move to end what he described as “grave injustices that left people in dire financial straits.”
Subsequently, in March 2024, O’Malley stated that the agency would end “that clawback cruelty” of a 100 percent withholding and as such the 10% cap was put in place. Now, a year later in early March 2025, the Trump Administration moved to revert the policy back to a 100% withholding rate for overpaid benefits.
“It 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,” acting Commissioner Lee Dudek stated in a March news release.
Now, the administration is reversing this decision partly, and as a result, only 50% of the recipient’s benefits will be withheld. No press release regarding this secondary change has been issued, however. The emergency message also stated that the new policy will apply to overpayment notices sent on or after April 25.
“I think that we had the policy right before,” O’Malley lamented in an April 28 interview. “We looked at the various break points, and if you would depend entirely on your Social Security check, having half of it interrupted means what? That means you go without paying your heating bill for the month; that means you’d go without your medicine instead of buying medicine and food.”
“So it was a cruelhearted policy before,” he added. “At 50%, it’s half as cruel, but it’s still cruel.”