Social Security to Reclaim Up to 100% of Overpaid Benefits

In a significant policy reversal, the federal government announced on Friday its decision to pursue the full recovery of overpayments made to Social Security recipients. This marks a departure from a 2024 policy that allowed beneficiaries to retain a larger portion of their benefits.

The Social Security Administration (SSA) confirmed that starting on March 27, it will increase the default overpayment withholding rate to 100% of an individual’s monthly benefit. This move anticipates recovering approximately $7 billion over the next decade.

The decision follows mounting criticism aimed at the SSA last year when some Americans were issued substantial repayment bills, often demanding immediate payment. Despite the agency’s legal obligation to recoup overpayments, the backlash led the Biden administration to reduce the recovery effort to just 10% of a beneficiary’s monthly benefit.

Lee Dudek, Acting Commissioner of Social Security, emphasized the agency’s responsibility to manage the trust funds effectively. He stated, “It is our duty to revise the overpayment repayment policy back to full withholding, as it was during the Obama administration and first Trump administration, to properly safeguard taxpayer funds.”

Notably, the new policy has stirred concerns, particularly highlighted by instances reported by 60 Minutes, where individuals received shocking bills demanding repayments of thousands of dollars within a short timeframe. Those unable to meet these obligations risked having their entire Social Security checks seized, plunging them into financial jeopardy.

Beneficiaries impacted by the forthcoming changes can reach out to the SSA at 1-800-772-1213 for assistance, whether to request a lower rate of recovery or to appeal the repayment process.