The Social Security Administration (SSA) is introducing new policies aimed at reducing costs, especially when it comes to overpayments. The changes come under the direction of the Department of Government Efficiency (DOGE), a new agency created early in President Trump’s second term to prevent wasteful spending and improve accountability across the federal government.
The SSA is stepping up efforts to recover overpayments, which could lead to smaller checks for many retirees as soon as later this month.
What Happens When You’re Overpaid
Overpayments are more common than many people think. From 2015 to 2022, the SSA mistakenly paid out around $72 billion, mostly by giving recipients more than they were due. Overpayments may occur for various reasons such as processing delays or a beneficiary not reporting changes in personal information. When the SSA spots one, they send a notice telling you how much they say you owe. You then have 90 days to respond to this notice, and you may:
- Dispute the overpayment by filing a request for reconsideration (Form SSA-561).
- Ask for a lower withholding rate if repayment would cause financial hardship (Form SSA-634).
- Request a full waiver of repayment if they can’t afford to repay the balance at all (Form SSA-632).
Recovery Rate to Increase to 50% Starting Late July
When Biden was in office, the SSA was only trying to collect about 10% of overpayments to avoid hitting people too hard. But the new administration pushed to tighten things up, bumping the rate back to 100%. After some heat, they scaled it back to 50%.
The first notices about the new recovery rules went out on April 25, 2025, with the 90-day deadline wrapping up in late July. For anyone who hasn’t responded, that means their Social Security checks could soon be cut in half until the full overpayment is paid back.
Advocacy groups are raising red flags, warning that slashing benefits by 50%, especially for people living on fixed incomes, could seriously hurt. But the SSA says the tougher policy is needed to cut losses and hold the system more accountable.
Will This Help Save Social Security?
The SSA expects the new overpayment rules to save about $7 billion over the next 10 years. That might sound like a lot, but it’s just a tiny part of the bigger money problems they’re facing.
The Social Security trust fund that pays retirement and survivor benefits is still expected to run dry by 2033. If Congress doesn’t step in, benefits could be cut by around 23% because there won’t be enough tax money coming in to cover everything.
So, while the $7 billion helps a bit, it only covers a small fraction, about 0.2%, of the gap. Lawmakers will have to come up with much bigger fixes to keep benefits from getting cut.
A Commonly Overlooked Benefit Boost
Even though the SSA is tightening things up, retirees should still make sure they’re getting all the benefits they’re entitled to. Many don’t realize they might be leaving thousands on the table just because they haven’t planned when or how to claim.
For example, waiting to start benefits past your full retirement age can seriously boost your monthly checks, sometimes by as much as $23,760 a year.
Figuring out the best time to claim, how to handle spousal benefits, or using some lesser-known rules can make a big difference. It’s a good idea to chat with a retirement planner or use SSA’s online tools to find the best approach for your situation.
Final Thoughts
The SSA’s new rules show a tougher approach aimed at cutting government waste. But for many retirees, especially those on fixed incomes, these changes could hit hard. With July coming up, anyone who got an overpayment notice should look over their options and respond before the deadline.
At the same time, choosing the right time and way to claim benefits is still one of the best ways to safeguard your retirement income in uncertain times.