The Social Security program has been providing millions of vulnerable Americans with a stable source of income during their years of retirement for close to a century now. For a fair number of these households, their monthly Social Security checks acts as the main source of income enabling them to cover their living expenses such as housing or food. As such, losing even a fraction of this amount could cause these individuals to face financial burdens, and it appears that this may just be case for some beneficiaries starting at the end of July.
Due to having been overpaid in the past, some Social Security beneficiaries could lose up to half of their monthly benefit soon, since the Social Security Administration (SSA) has begun the process of recouping all overpaid balances by means of withholding from the monthly benefit. Here is what you need to know.
The Social Security Administration takes action regarding overpayments
“Improper payments have been a longstanding challenge for SSA. While the Agency has taken actions to address this challenge, it needs to do more, and OIG’s recommendations can guide the Agency as it determines those corrective actions,” Michelle L. Anderson, Assistant Inspector General for Audit and Acting Inspector General explained in a report from the Office of the Inspector General. “Without better access to data, increased automation, systems modernization, and policy or legislative changes, improper payments will continue to be a major challenge for SSA into the future.”
In March, the Trump Administration announced that it would be reinstating the 100% withholding rate for those found to have been overpaid. This decision sparked major backlash and criticism from Social Security beneficiaries and advocates alike, however. Under the previous Biden Administration, the withholding rate was capped at 10%. Subsequently, an emergency meeting was held at the SSA a few weeks later in April and it was decided that the withholding rate would be dropped to 50% of the monthly benefit.
“When we determine an individual receiving Title II benefits is overpaid, we send them a notice requesting a full and immediate refund and inform them of their right to request reconsideration or a waiver of recovery,” the SSA outlined in its emergency notice.
These notices were sent out on April 25th, 2025. Following this, the recipient of the overpayment notice will have had a 90 day window to take any sort of action regarding the notice. July 25th, 2025 marks the end of this 90 window and if the beneficiary did not take any action with regards to their overpayment notice, their benefit checks will be subject to the 50% withholding rate going forward from July 25th, up until their overpayment debt is paid off.
What to do if you receive an overpayment notice
An overpayment of benefits can occur for varying reasons, the fault of which can lie with either the SSA or the beneficiary themselves. According to the SSA website, “benefits are overpaid when we can’t accurately calculate your benefit amount because our information is wrong or incomplete. It can happen if you don’t share updates with us about what’s changed in your life, like your ability to work, living situation, marital status, or income.”
As such, if you have received an overpayment notice, there are some options available so as to avoid losing half of your benefit. Within 90 days of receiving the notice, you can submit a waiver of repayment if you believe that you had not been overpaid or if forfeiting half of your benefit would cause severe financial burdens. Alternatively, you could negotiate a lower rate of withholding by submitting a request of reconsideration.
Social Security beneficiaries with an overpayment balance need to act fast in this regard, however, as July 25 is less than a month away, meaning that the 90 day window to take action is soon coming to a close.