On Friday, March 7, at 5 p.m., Donald Trump’s Social Security Administration (SSA) announced a policy change that could financially devastate senior citizens.
The agency plans to reinstate a strict rule that withholds Social Security payments from beneficiaries who receive overpayments until the full amount is recovered — even if the overpayment was due to the agency’s own mistake.
This change reverses a Biden-era policy that capped the withholding rate at 10% of a recipient’s payment.
Under the new rule, the SSA will withhold 100% of a beneficiary’s payment if they owe money due to an overpayment.
This move could leave some seniors with no income, even though overpayments are often caused by agency errors rather than fraud, according to a 2024 Congressional Research Service report.
Sen. Rick Scott (R-Fla.) had previously warned that a 100% clawback rate could bankrupt many seniors in his state.
In 2023, Scott wrote a letter to the SSA, saying, “Social Security needs to be held accountable for these errors, not Florida seniors.” However, Scott and other Republicans have remained silent since the SSA’s announcement.
The policy rollback will take effect on March 27, undoing changes made by former SSA Commissioner Martin O’Malley during the Biden administration.
O’Malley had lowered the clawback rate from 100% to 10%, arguing that most overpayments resulted from agency errors or beneficiaries’ minor reporting issues, not fraud.
The only way for seniors to avoid repayment is to request a waiver by calling an SSA hotline or visiting a field office — but many field offices are now being closed.
Elon Musk’s Department of Government Efficiency (DOGE) has pushed for these closures as part of a broader effort to reduce the SSA’s workforce by 7,000 employees.
At least 10 field offices have already been shut down, and 47 more in 24 states are listed for closure.
DOGE also proposed eliminating phone services for claims processing, though the agency dropped the idea after a Washington Post report.
Still, with reduced staff and office closures, navigating the repayment process will become even harder for seniors.
The SSA says the new policy will save $7 billion over the next decade. Interim SSA Chief Leland Dudek, who has been working with the Trump administration and DOGE, defended the change, saying the agency is legally required to recover overpayments.
O’Malley criticized the move, saying it would cause severe hardship for seniors.
“What they’re saying is that the person can fight their way into a crowded 800 number, or fight their way with a cane and a walker into a field office that, oh by the way, might be closed,” O’Malley said. “It’s cruel-hearted and contrary to good conscience.”
Congressional Republicans have previously opposed the 100% clawback rate. In 2020, several Republican lawmakers argued that seniors shouldn’t be forced to repay overpayments caused by government errors.
In 2024, Rep. Jason Smith (R-Mo.) and Rep. Mike Carey (R-Ohio) supported limiting repayment obligations and making it easier to get waivers. However, they have been silent on the latest SSA policy shift.
Meanwhile, Democrats have voiced strong opposition. Rep. John Larson (D-Conn.) introduced bills to prevent office closures and protect Social Security data, but House Republicans blocked these measures.
Larson accused the administration of using the clawback policy to fund tax cuts for the wealthy. “Last year, Republicans called for relief from clawbacks. Where do they stand now?” Larson said.
Musk has previously called Social Security “the biggest Ponzi scheme of all time” and claimed that up to $700 billion is wasted annually in entitlement programs like Social Security and Medicare — a figure far higher than official reports suggest.
An inspector general report found that improper payments between 2015 and 2022 totaled $72 billion — less than 1% of total benefits paid during that period.
O’Malley argued that the SSA’s new approach would increase overpayment errors due to staffing cuts and lack of oversight.
“It’s going to take longer for a depleted and gutted staff to catch up with the few errors that they make,” O’Malley said.
Despite previous Republican opposition to the 100% clawback rate, GOP lawmakers have largely remained quiet about this policy change.
Meanwhile, thousands of SSA employees were recently offered buyouts as DOGE continues its effort to downsize the agency.
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