The Social Security Administration said that it would boost the amount it would return to beneficiaries who got overpaid benefits from 10% to 100%.
Any future overpayments would be subject to modification.
The Social Security Administration projects that this move will result in overpayment recoveries, or savings for the program of about $7 billion over the next decade, citing the Office of the Chief Actuary.
In 2025, the projected benefit payment from Social Security is $1.6 trillion.
Interim Social Security Commissioner Lee Dudek said, “We have the significant responsibility to be good stewards of the trust funds for the American people” as he made the announcement. We must return the overpayment payback policy to full withholding, just as in the Obama and early Trump administrations, to adequately protect public monies.
Some recipients have been mistakenly compensated by the Social Security Administration (SSA) for a long time. The Social Security Administration (SSA) would deduct the amount—up to the full benefit amount—from the beneficiary’s paycheck if it was found out. Many individuals who were impacted were low-income, old, or crippled, and they had no idea they were being overpaid. It was difficult for them to lose their entire benefit. The withholding was decreased from 100% to 10% and the payback restrictions were altered in early 2024 during the administration of former Social Security Commissioner Martin O’Malley. It will now return to 100% in the majority of situations.
Overpayment notice recipients are unfairly penalized, even though they are often not at fault, for this supposedly cost-cutting measure implemented by the Social Security Administration. According to the National Committee to Preserve Social Security and Medicare, “many overpayments are the result of SSA’s part,” as reported by MarketWatch.
The news is made at a time when Social Security is experiencing financial difficulties; the program provides monthly payouts to around 69 million Americans. If the Social Security trust fund runs out of money by 2035, all recipients, present and future, will see a reduction in their income. Most individuals over the age of 65 rely heavily on Social Security for their income.
The so-called Department of Government Efficiency, which Elon Musk oversees, and President Trump have both been looking at Social Security. Claims that beneficiaries are receiving Social Security benefits on accounts related to persons who are 150, 200, or even 300 years old have been repeatedly disproved by both men, who have also maintained that there is fraud inside the SSA.
From fiscal year 2015 through fiscal year 2022, the Social Security Administration paid out $8.6 trillion in benefits. Of that amount, the inspector general determined that illegal payments amounted to about $71.8 billion, or less than 1%. Many of them were deemed overpayments according to the government.
Are Americans who claim to be 150 years old getting Social Security? And four other frequently asked questions about Social Security fraud.
Significant layoffs were among the several changes announced last week by the agency.
“The Social Security Administration should recover any overpayments and ensure that people receive the benefits they rightfully earned,” said Richard Fiesta, executive director of the Alliance for Retired Americans. But it’s harsh to return to a 100% payback rate. This is going to hurt people needlessly, and some of the most vulnerable Americans may have their monthly benefits cut in half until the payback is paid off.
The withholding rate will increase from 10% to 100% beginning on March 27, and the government will begin mailing letters about this change. Officials from the Social Security Administration have said that the increased withholding rate is solely applicable to newly paid overpayments of benefits.
“No action is required, and the withholding rate will not change for current beneficiaries with an overpayment before March 27,” the SSA stated. For overpayments of SSI, the withholding rate will stay at 10%.
Beneficiaries have the right to challenge either the decision or the amount of any overpayment. Ask the Social Security Administration for a waiver if you don’t think the overpayment was your fault or if you can’t afford to repay it. The government body has said that it would not seek reimbursements if an original appeal or waiver is still ongoing. The Social Security Administration advised beneficiaries who are unable to pay the “full recovery of their overpayment” to contact either their local office or the agency’s toll-free number, 1-800-772-1213, to inquire about a reduced rate of recovery.