If you are a beneficiary of Social Security, the Social Security Administration (SSA) has just sent a new message that you can’t afford to ignore. The emergency message from the SSA could have a major impact on millions of beneficiaries who received overpayments. These beneficiaries risk losing their monthly checks until the overpayments paid to them are recovered in full.
Why Social Security Issued an Emergency Message
The government is on a mission to recover all overpaid Social Security benefits, and the process will be aggressive and fast. Between 2015 and 2022, the government lost nearly $72 billion in Social Security benefits, and this money has to be recovered. To achieve this, the SSA announced earlier this year that it could begin withholding up to 100% of a recipient’s benefits to recover those funds.
However, due to public outrage and media attention, the SSA walked that back slightly by temporarily capping the withholding rate at 50% instead of 100%. This is still a significant increase from the prior standard of 10%, and many could lose substantial amounts of their monthly checks.
The new withholding rule applies to Old-Age, Survivors, and Disability Insurance (OASDI) benefits. The withholding rate for Supplementary Security Income (SSI) will remain at 10%.
SSA’s New Overpayment Collection Process Explained
Starting April 25, the SSA began to send notices to beneficiaries who received overpayments. The notice explained how much one owes the agency and offered 90 days to either appeal the overpayment, request a waiver, or ask for a lower withholding rate.
After the end of the 90-day window, the agency may start to withhold up to 50% of monthly checks until the debt is cleared. Many Americans find this punitive since losing half their monthly checks could mean the difference between paying rent and facing eviction.
Advocates argue that the 50% overpayment collections could hurt the most vulnerable individuals, many of whom live on fixed incomes and rely solely on Social Security benefits.
How You Can Avoid Overpayments
There are many ways of avoiding overpayments, but at the top of all is to stay informed and proactive. Based on expert recommendations, you can avoid overpayments by:
- Checking your earnings history regularly
Now that the SSA is withholding 50% of monthly checks, the amount you receive in the future depends on the accuracy of your earnings record. It is important to check your earnings regularly by logging into your My Social Security account.
- Understand the Rules for Disability Benefits
If you are a beneficiary of Social Security Disability Insurance (SSDI) and return to work even part-time, you must track your earnings carefully. If you exceed the annual limit for Substantial Gainful Activity of $1,470 per month for non-blind recipients, you could become ineligible for SSDI benefits and face repayment.
- Report Changes Promptly
To avoid overpayments, report any changes in assets, income, or living arrangements to the SSA promptly, especially if you receive SSI, which has strict asset limits. Surprisingly, even sleeping on a friend’s couch could affect your eligibility because it is considered in-kind support.
- Keep Copies of All SSA Correspondence
It is important to keep all copies of all SSA correspondence documents, such as benefit statements, letters, and other written communications you have had with agency representatives, so that you have records whenever you need to challenge an overpayment.
In addition to the above cautionary actions, it is important to know your rights. If you receive an overpayment, you have the right to appeal, request a waiver, or ask for a reduced payment plan. In some cases, you might qualify for a $10 per month repayment plan, but only if you contact SSA, appear, and request it.
Conclusion
Although the current withholding cap has been reduced from 100% to 50%, that rule could change again soon. With over $4.7 billion recovered in overpayments in just one year (2022), the government will be more aggressive in recovering the remaining amount.
If you are a beneficiary of Social Security, avoid being caught off-guard by monitoring your checks, staying alert, and advocating for your rights.