Starting July 24, Social Security recipients with overpayments my see their monthly benefits cut by 50%. This stricter recovery policy, often due to SSA errors or unreported income, could significantly reduce checks for millions of seniors who don’t take action.
What is Happening and When
In April 2025, the SSA announced a new policy, which will automatically withhold 50% of monthly benefits from individuals identified as having been overpaid. This new garnishment rate applies to new overpayment notices issued on or after April 25, 2025.
According to an internal SSA message, “Any new Title II overpayment determinations will have the 50% benefit withholding automatically applied for overpayment notices sent beginning April 25, 2025.”
The 90-day grace period to respond to these notices ends on July 24, 2025. For those who receive a notice and don’t request a waiver, file an appeal, or negotiate a lower payment rate, the 50% garnishment will begin automatically on this date. Some individuals whose notices were sent before April 25 may already be experiencing reduced payments.
How Overpayments Occur
Overpayments occur when SSA pays a beneficiary more than they are intended to receive. This often happens because of incorrect information the SSA has, or because beneficiaries don’t update them about changes in their life. These changes can include updates to earnings, marital status, or living arrangements.
The SSA states on its 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.”
A recent analysis by the health policy organization KFF revealed that the SSA tried to get back overpayments from approximately 2 million individuals in the fiscal year that ended September 2023.
With this updated policy, the agency is now defaulting to a much higher 50% withholding rate for those who don’t respond to their notice within 90 days. The SSA further clarified that, “If an overpaid individual has a prior overpayment and incurs a new overpayment, all outstanding overpayments will default to 50% benefit withholding at the end of the approximately 90-day period.
Options for Seniors
Experts are advising seniors not to panic, but to act quickly. Shannon Benton, executive director of The Senior Citizens League, emphasized on July 9 that while overpayments should be recovered, this stricter process could have severe consequences for some.
Benton stated, “For some retirees, it wont matter if its 1% or 100%. Any amount of clawback could be catastrophic for the less financially stable retirees.
Shannon stressed that recipients have several options:
- Request a lower repayment rate: If you can’t afford the 50% deduction, you can ask for a smaller amount to be withheld.
- Appeal the overpayment decision: You have the right to challenge the SSA’s decision that you were overpaid or the amount they say you owe.
- Apply for a hardship waiver: If repaying the overpayment would cause you significant financial difficulties, you can apply for a waiver.
Benton added, “These options could provide relief and flexibility for individuals who struggle to manage their deductions.”
To appeal an overpayment decision, you can visit the SSA website to file a request for reconsideration form. You can also submit this form by mail or fax to your local SSA office. In certain situations, you might be able to request a hearing with an administrative law judge or explore their appeal options.
Preventing Garnishment
You can prevent the automatic 50% reduction of your Social Security benefits by directly repaying the SSA. This can be done conveniently through online bill pay, credit card, or by sending a check. The SSA typically requests that any overpaid amounts be repaid within 30 days of receiving an overpayment notice.
Conclusion
It’s essential to note that despite these new overpayment recovery policies, the regular July 2025 Social Security payment schedule will not change. Payments are still set for July 3rd, 10th, 17th, and 24th, depending on when you started receiving benefits or your birth date. If you’ve received an overpayment notice, act quickly to explore your options and potentially avoid or reduce the benefit cut.