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Social security to deduct payments to recover outstanding debts

Facing a sudden cut to your Social Security benefits? A new policy allows the SSA to withhold 100% of payments to recover overpayments, leaving many retirees at risk. Learn how to appeal, request waivers, and protect your financial security before it’s too late.

Millions of Social Security beneficiaries face full payment withholding as the SSA enforces a new overpayment recovery policy. Photo: LR Composition/MARCA
Millions of Social Security beneficiaries face full payment withholding as the SSA enforces a new overpayment recovery policy. Photo: LR Composition/MARCA

The Social Security Administration (SSA) will implement a new policy starting March 27, 2025, to address overpayments made to beneficiaries. Under this policy, the SSA will automatically withhold up to 100% of monthly Social Security checks from individuals who have been overpaid, continuing until the full amount is recovered or the beneficiary contacts the SSA to arrange a repayment plan.

Social security overpayment recovery: 100% withholding policy sparks concerns among seniors

Overpayments can occur due to beneficiaries misreporting their situations or administrative errors in calculation. Previously, the default withholding rate for overpayments was reduced to 10% under President Joe Biden's administration. The reinstatement of the 100% withholding rate has raised concerns among advocates, who fear that withholding entire checks could lead to financial distress or even homelessness for some seniors. ​

Beneficiaries who have been overpaid will receive notices by mail detailing the amount owed. They will have 30 days to repay the full amount or contact the SSA to establish a payment plan. If no action is taken within this period, the SSA will proceed to withhold the entire monthly benefit until the debt is fully recovered. This policy emphasizes the SSA's responsibility to manage trust funds effectively and ensure the integrity of the Social Security program. ​

Social security overpayment appeals: How to protect your benefits from 100% withholding

Individuals who believe the overpayment was not their fault have the option to appeal or request a waiver for the debt. During the appeal or waiver process, the SSA will halt recovery efforts, meaning beneficiaries will continue to receive their payments until a decision is made. This provides an opportunity for beneficiaries to contest overpayment claims they deem incorrect or unjust. ​

The SSA's decision to revert to the 100% withholding policy underscores the agency's commitment to fiscal responsibility. However, it also highlights the potential challenges beneficiaries may face, particularly those who rely heavily on their monthly Social Security checks. Beneficiaries are encouraged to promptly address any overpayment notices to avoid complete withholding of their benefits and to explore available options for repayment or dispute. ​

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