Some Social Security recipients might soon face financial trouble due to a new policy that advocates say could harm many older Americans.
Starting today, the Social Security Administration (SSA) will begin taking back overpayments from retirement benefits by withholding 100% of a recipient’s monthly check until the debt is repaid.
This is a significant increase from the previous 10% withholding rate. The new policy applies to overpayments identified on or after March 27, while those who were overpaid before that date will still face the 10% rate.
SSA Acting Commissioner Lee Dudek announced the change earlier this month. He has been working with Elon Musk’s Department of Government Efficiency (DOGE) to cut costs at the agency by laying off thousands of workers and closing field offices.
Dudek says the 100% recovery rate is necessary to ensure overpaid funds are recovered, but advocates argue that it will create financial hardship for seniors who depend on Social Security as their main source of income.
Dan Adcock, director of government relations and policy for the National Committee to Preserve Social Security and Medicare, said the policy could leave many seniors without money for essentials like food and housing.
About 40% of Social Security recipients rely on the program for 90% or more of their income, making the clawback especially difficult for them.
A 2022 report from the SSA’s inspector general revealed that many overpayments are caused by the agency’s own mistakes, with about 73,000 overpayments that year linked to inaccurate benefit calculations.
Under the Biden administration, the SSA had capped the clawback rate at 10% in 2024 after reports showed that higher recovery rates were pushing some seniors into financial distress and even homelessness. Now, the agency is returning to the previous 100% rate.
Can You Avoid a Social Security Overpayment?
Overpayments can result from SSA errors or outdated beneficiary records. Beneficiaries are advised to report changes in income and other personal information to the SSA promptly to prevent overpayments.
However, the complex Social Security system can make it hard for seniors to realize they’re being overpaid.
Shannon Benton, executive director of The Senior Citizens League, recommends that beneficiaries monitor their benefits closely and contact the SSA immediately if they notice any unexpected changes.
Keeping records of payments and any discrepancies can help prevent issues.
Challenges Due to DOGE Cuts
Job cuts and field office closures under DOGE have made it harder for seniors to contact the SSA for help. Adcock noted that long wait times and disconnected calls are common issues.
During a recent Senate confirmation hearing, Frank Bisignano, President Trump’s nominee for Social Security commissioner, acknowledged that only about 46% of calls to the SSA are answered because many people hang up due to long hold times.
Sen. Steve Daines of Montana shared that one of his staffers was disconnected three times while trying to reach the agency, once after waiting for an hour.
Plans to Improve Social Security
Bisignano said he plans to reduce “improper payments,” which include both overpayments and underpayments.
About 1% of Social Security payments are currently considered improper, but he aims to reduce that rate significantly.
However, Benton said meaningful progress will require major investments in the SSA’s technology and systems, which could take years to implement.
For now, beneficiaries are advised to monitor their benefits, report income changes, and respond to any overpayment letters from the SSA. They can also request a waiver using SSA form 632.
Benton stressed that while recovering overpayments is important, beneficiaries need more time to plan and shouldn’t face immediate 100% cuts to their benefits.
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