Social Security benefit checks roll out on every second, third, and fourth Wednesday of the month. These monthly benefit payments are made to around 72 million individuals, however, some recipients may notice that their benefit checks will be slashed in half starting soon. This reduction in benefits will go into effect as the Social Security Administration (SSA) takes action to retrieve all overpayments made in the past by means of withholding from the recipient’s benefit.
Notices informing beneficiaries of any overpayment balances were sent out at the end of April and following this, the agency will soon begin withholding 50% of the monthly benefit until the beneficiary’s balance is cleared. Here is what you need to take note of if you have been notified of an overpayment.
Overpayments at the Social Security Administration
An overpayment of benefits can occur for several reasons, such as a miscalculation from the Social Security Administration, or if a beneficiary fails to report any changes to their income or living situation. “From FYs (fiscal years) 2015 through 2022, SSA estimates it made nearly $72 billion in improper payments, most of which were overpayments,” as per a report from the Office of the Inspector General of the SSA. Consequently, in March, it had been announced that the withholding rate for those with overpayment balances will be 100%.
This rate, however, sparked much criticism and as a result, in April, an emergency meeting was held at the SSA and it was then announced that the withholding rate would be capped at 50% of the monthly benefit until the balance is cleared. “Any new Title II overpayment determinations will have the 50 percent benefit withholding automatically applied for overpayment notices sent beginning April 25, 2025, which is the first day of COM 05. If an overpaid individual has a prior overpayment and incurs a new overpayment, all outstanding overpayments will default to 50 percent benefit withholding,” as per the emergency message.
Under the previous Biden Administration, the withholding rate was capped at 10% since many beneficiaries could potentially be sent into poverty if they lose their benefit checks. Additionally, according to a Freedom of Information Act request obtained by KFF Health News, “the SSA clawed back payments from over 2 million people in 2023, more than double the number the agency reported to Congress.”
Benefits slashed in half starting in August
Notices of overpayment were sent to the impacted beneficiaries on April 25th according to the SSA. Subsequently, upon receiving the notice, the recipient will then have a 90 day period during which they could take action against this. The first option available to recipients would be to submit a request for a waiver of repayment. However, this should only be done if the recipient can prove that they had not been overpaid, or if losing half of their monthly benefit would result in significant financial distress. Alternatively, the recipient could negotiate a lower rate of withholding.
Following this, if no action is taken during the 90 day window, the SSA states that it “will recover the overpayment by withholding up to 50 percent of their Title II benefit payment (if there is no fraud or similar fault), until we fully recover the overpayment.”
Since the notices of overpayment were sent out on April 25th, the 90 day window to take action will close around July 24th. This means that the SSA will begin withholding benefits beginning in August. The last Social Security benefit payment for July will be made on the 23rd as per the schedule, and as such, it is more likely that the first round of clawbacks will go into effect with benefit payments for August.
The Social Security benefit payment dates for August are as follows:
- Wednesday, August 13th – Birth dates between the 1st and 10th
- Wednesday, August 20th – Birth dates between the 11th and 20th
- Wednesday, August 27th – Birth dates between the 21st and 31st