The Social Security Administration (SSA) just announced a new rule for overpayments that could slash monthly checks for many beneficiaries without warning. This change affects recipients of Social Security Disability Insurance (SSDI) and Old-Age and Survivors Insurance (OASDI), and it began taking effect on March 27, 2025. Initially, the agency could withhold 100% of a beneficiary’s monthly benefit to recover an overpayment, regardless of whether it was the agency’s mistake.
What is an Overpayment and How Does it Occur?
An overpayment occurs when the SSA sends an amount of money that exceeds what an individual is entitled to receive. These errors result from a recipient’s failure to report changes in income or living situations and from SSA miscalculations and system issues. According to a 2022 report from the SSA’s inspector general, about 73,000 overpayments were due to the agency’s miscalculations.
The 100% Clawbacks Rule and the 50% Adjustment
Until March 2024, the SSA could take up to 100% of a recipient’s monthly check to recover overpayments. Due to public backlash, the agency capped that at 10% to offer financial relief to low-income individuals and people with disabilities. In March 2025, the Acting Commissioner Lee Dudek reinstated the 100% clawbacks following a directive from the Department of Government Efficiency (DOGE) to recover billions of dollars lost through overpayments and fraud.
Who’s at Risk?
The recipients at risk are those who receive SSDI because most of them earn below the threshold and are unaware that they must report even minor changes in income or work activity. If their income exceeds $1,620 per month and they fail to report it, it can trigger retroactive overpayments, which can be discovered years later.
What Can You Do to Protect Yourself?
If you receive OASDI or SSDI, here are the actions to take to avoid being at risk of overpayments;
- Review all SSA notices carefully and look for any payments that look off. Sometimes the error might be on the SSA end, especially following the shortage of workers.
- Appeal any overpayment notices that you are certain that they are wrongly sent by filling a “Request for Reconsideration” (Form SSA-561)
- Request a waiver if the overpayment was not your fault and if repaying it in full could cause financial hardship. To request a waiver, you can file form SSA-BK or call SSA directly if the amount is below $2,000.
- Negotiate the repayment plan by asking the SSA to reduce the amount they can take from your check by completing Form SSA-634.
- Report changes in your work or life to avoid overpayments. Some of the changes you should report are:
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- changes in income and unearned income search us inheritance,
- workers’ compensation or unemployment benefits,
- significant changes in wages or work hours,
- changes in address or living arrangements
- Track your payments and report any sudden increase in your monthly benefits
While the change from 100% to 50% withholding is a financial relief to those affected, it still puts millions of beneficiaries at risk of experiencing financial distress. To avoid losing part or the whole of your monthly benefits, stay vigilant and track the benefits you receive every month.
For more updates, visit the SSA’s official website or contact their helpline at 1-900-772-1213.