Social Security To Reclaim 50% Of Overpayments Starting In July, Slashing Benefits For Some: What To Know

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Some Social Security recipients will see reduced benefits starting in July as the agency begins recovering the funds initially sent to Americans who received a boost in their monthly checks in recent years.

While the Social Security Administration has implemented several changes this year, its latest action aims to recoup overpayments made to millions of Americans in the past, according to USA Today.

What is an overpayment?

Overpayment can occur when a beneficiary fails to notify the agency of changes in their income, which prompts the SSA to overpay them or to miscalculate their monthly benefits.

Social Security paid almost $72 billion in improper payments to Americans who receive benefits from the government program during the 2015-2022 fiscal years, according to a 2024 report from the Social Security Administration’s Office of the Inspector General.

The report states that although the amount is less than 1% of total benefits paid, the Social Security Administration had $23 billion in uncollected overpayments by the end of 2023.

“Improper payments have been a longstanding challenge for SSA. While the Agency has taken actions to address this challenge, it needs to do more, and OIG’s recommendations can guide the Agency as it determines those corrective actions,” Michelle Anderson, assistant inspector general for audit and acting inspector general, said at the time, per Kiplinger. “Without better access to data, increased automation, systems modernization, and policy or legislative changes, improper payments will continue to be a major challenge for SSA into the future.”

What are the changes some recipients could face in July?

According to News Nation, some beneficiaries could see their benefits cut in half starting in July. This means that instead of collecting the entire benefits check, the agency will deduct 50% of the funds toward repayment, as announced in April.

The percentage is higher than the initial 10% being taken for overpayments. However, this changed in 2023 after the agency received negative feedback regarding the practice of deducting money from recipients’ benefits, according to Cox Media Group.

Former Social Security chief Martin O’Malley said at the time, “Innocent people can be badly hurt,” per the Detroit Free Press.

When did SSA notify recipients of the changes?

Overpayment notices were sent to recipients on April 25; those affected by the new policies would begin to see reduced benefits on July 24, according to the policy report on the SSA’s website.

The agency said that when a Title II beneficiary is overpaid, they’re notified to repay the full amount immediately and informed of their right to request a waiver, reconsideration or reduced withholding, typically within 90 days.

“If the individual does not request a lower rate of withholding, reconsideration, or waiver after the approximately 90-day period, we will recover the overpayment by withholding up to 50 percent of their Title II benefit payment (if there is no fraud or similar fault), until we fully recover the overpayment,” the SSA stated.

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