Millions of Americans rely on Social Security as their financial lifeline to afford essentials like food, medication, and housing. However, a new rule from the Social Security Administration (SSA) could put many in a difficult situation. The government now has the power to seize up to 50% of your monthly benefits to recover overpaid funds.
While your Social Security checks remain safe during the ongoing government shutdown, this aggressive new overpayment collection policy could see some seniors lose up to half of their monthly benefits, even if the error wasn’t their fault.
The SSA Can Now Take 50% of Your Check to Recover Overpayments
The SSA’s new overpayment recovery policy is the most concerning update for many seniors. Under this policy, the agency can withhold up to half of their monthly benefits to recover overpaid money.
Overpayments usually occur when the SSA isn’t promptly notified of income changes, living arrangement adjustments, or marital status updates. All these factors can alter benefit eligibility.
During the COVID-19 pandemic, the SSA temporarily suspended overpayment collections. When they resumed, the withholdings were capped at 10% and later increased to 100%. However, this drew immediate backlash, and the SSA decided to settle on a 50% withholding rate.
The current overpayment recovery policy means that a retiree receiving the average benefit of about $2,000 could only receive $1,000 until the alleged overpayment is recovered.
Payments Continue During Shutdown, But Services Are Reduced
Besides the 50% overpayment withholding policy, the SSA has confirmed that monthly Social Security and Supplemental Security Income (SSI) payments will be disbursed as usual, despite the government shutdown. However, operations at local offices will be limited.
Only essential services, such as appealing a decision, applying for benefits, or replacing a Social Security card, will remain available. Other tasks, such as updating earning records, replacing Medicare cards, or requesting benefit-proof letters, which are considered less urgent, will be suspended until the shutdown ends.
Recipients are advised to visit ssa.gov/agency-shutdown to track any service changes and find ongoing updates.
Social Security Payment Schedule 2025 Based on Your Birthday
As mentioned earlier, the Social Security Administration (SSA) will continue sending benefits as usual following its staggered payment schedule tied to your date of birth. Here is the schedule:
• Birthdays on the 1st–10th are paid on the second Wednesday of each month.
• Birthdays on the 11th–20th are paid on the third Wednesday.
• Birthdays on the 21st–31st are paid on the fourth Wednesday.
A Modest 2.5% COLA for 2026
Although the current government shutdown hinders the confirmation of the 2026 cost-of-living adjustment (COLA), estimates suggest that it will be around 2.7%. This will be slightly higher than the 2025 COLA of 2.5%. The estimates suggest that a retiree who received the average monthly benefit of about $2,008 would get an increase to $2,062 per month starting January 2026.
The official COLA announcement will be delayed due to the ongoing federal government shutdown. This is because the Bureau of Labor Statistics (BLS), which is mandated to calculate the inflation data used for the adjustment, was forced to pause operations, delaying the release of September’s Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
What Recipients Can Do
Retirees who receive an overpayment notice should not ignore it. Beneficiaries have the right to appeal the decision or request a waiver if losing 50% of their monthly benefits would cause financial hardships. Beneficiaries can find instructions on how to file both appeals and waiver requests on the SSA’s website.
Conclusion
Despite the government shutdown that limits certain Social Security services, you will still receive your monthly payments. However, the government has the right to withhold up to 50% of your benefits to recover overpayments. To avoid being a victim of the new policy, retirees are advised to report any income or household changes promptly.