- Social Security cuts begin in July as the agency moves to recover billions in past overpayments.
Half of some beneficiaries’ monthly checks will be withheld, up from the previous 10% recovery rate.
$72 billion in improper payments were made between 2015-2022, with $23 billion still uncollected.
Starting late July, some Americans will see smaller Social Security checks as the federal agency moves to reclaim billions of dollars mistakenly paid out in past years.
The Social Security Administration (SSA) confirmed it will begin withholding 50% of monthly benefits from recipients who were overpaid—a significant increase from the previous 10% clawback rate. The change, announced in April, is a partial retreat from an even more aggressive plan floated in March to seize entire benefit payments until debts were repaid.
Overpayments total billions
The SSA has struggled with overpayments for years. Between fiscal years 2015 and 2022, the agency distributed nearly $72 billion in improper payments, most of them overpayments, according to an August 2024 report from the SSA’s Office of the Inspector General. Despite the eye-popping total, these errors accounted for less than 1% of the almost $8.6 trillion in benefits paid during that period.
As of September 2023, the SSA reported $23 billion in uncollected overpayments.
Overpayments can occur when beneficiaries fail to report income changes—such as returning to work—or when the agency incorrectly calculates benefits.
Agency responds to criticism
The SSA’s debt collection practices have drawn sharp criticism in recent years, especially after reports surfaced in 2023 of some beneficiaries losing their homes or facing severe financial hardship after abrupt benefit suspensions.
“Innocent people can be badly hurt,” then-SSA Commissioner Martin O’Malley told the Detroit Free Press.
Facing public pressure, the agency scaled back its collection efforts last year, reducing the standard withholding from 100% to 10% of monthly benefits. However, with billions still outstanding, the SSA has now opted for the middle ground of a 50% withholding rate.
Roughly two million people were targeted for overpayment recovery in the fiscal year ending September 2023, according to data obtained by KFF and Cox Media Group through a Freedom of Information Act request.
What beneficiaries need to know
The SSA began issuing new overpayment notices in April, and the larger deductions will begin after about 90 days, placing the start date around July 24 at the earliest.
Those affected have options. Overpaid beneficiaries can repay their debt by credit card, online bill pay, or check. They can also request a waiver if they believe the overpayment was not their fault or if repayment would cause financial hardship. Waiver applications are available on the SSA’s website.
Beneficiaries unsure of their status are urged to check their Social Security account online or contact the SSA directly.
While the upcoming reductions won’t affect everyone, the ripple effects of the agency’s push to recover overpayments will be felt by thousands of retirees, disabled Americans, and others relying on Social Security benefits as their primary income.