Starting this month, a huge Social Security change will be rolled out, and soon millions of Americans will see the impact. Due to these changes, some beneficiaries will receive higher payments, while others might see reductions in their monthly Social Security benefits.
Beginning in July, recipients who received overpayments in the past may face a 50% cut in their monthly checks.
Overpayments Trigger 50% Benefit Reductions
To recover these improper payments, the agency approximates that on July 24, it will begin withholding up to half of monthly Social Security payments.
Overpayments are usually caused by miscalculated benefits or outdated records, especially when a beneficiary fails to report changes in income. Regardless of the cause, affected individuals were given 90 days to respond after receiving a notice. This time was to allow them to request a waiver or negotiate a lower payment amount.
Although these actions are mandatory for the integrity of the program, the SSA is committed to ensuring that those who were genuinely unaware of the overpayments or cannot afford to repay are treated fairly. Therefore, if you received an overpayment notice, you can apply for a waiver through the SSA website or arrange repayment via credit card, online banking, or check.
SSA Overpayment Review Reveals Rare Errors with Huge Financial Impact
According to an August 2024 report by the SSA’s office of the Inspector General, improper payments made up less than 1% of the nearly $8.6 trillion paid out between 2015 and 2022. However, that small percentage translates to a staggering $72 billion in overpayments.
As of September 2023, the SSA had recovered approximately $49 billion, meaning that there is an outstanding balance of $23 billion that the agency is planning to recover.
Big Boosts for Public Sector Workers
Not all changes will result in people losing a portion of their benefits. In fact, millions of public sector workers will receive increases in their benefits following the repeal of the Social Security Fairness Act on January 5, 2025. This legislation corrects past deductions in benefits for public workers whose jobs didn’t contribute to Social Security.
Eligible individuals include firefighters, police officers, public school teachers, and postal workers. Already, the SSA has sent some of the retired workers over 3.1 million retroactive payments, totaling $17 billion, with each individual receiving an average of $6,710 in back payment.
These changes are meant to eliminate inequities in how benefits were calculated for workers with non-covered employment. These beneficiaries may see their adjusted monthly payments beginning with the August 2025 payment.
What to Expect Moving Forward
According to the SSA, 92% of more than 278,000 new claims tied to the Social Security Fairness Act are already processed. However, some applications, particularly those submitted after the law took effect in January, are still pending.
If you believe you are eligible for additional benefits under the Fairness Act, you can apply online at ssa.gov/apply. If you are unsure, contact your local SSA office or review your account online.
Conclusion
These changes are already in the process, and Social Security recipients should carefully monitor their benefits and stay up to date with communications from the SSA. Whether you are facing a reduction due to overpayment or receiving a long-awaited boost from the Fairness Act, it is essential to take immediate action if needed.
Additionally, if you note a mistake in your payment amount, visit ssa.gov to explore options available and submit a claim. The faster or sooner you act, the better your chances of avoiding the disruption of your benefits.