The Social Security Administration (SSA) is reinstating a policy that could leave some Americans facing severe financial hardship—through no fault of their own. The agency will once again withhold 100 percent of overpaid benefits from recipients, reversing a recent change that had provided relief to those affected.
For decades, the SSA fully withheld benefits from individuals it determined had been overpaid. However, in March 2024, the Biden-appointed commissioner capped the withholding rate at 10 percent of a recipient’s monthly check, arguing that a sudden and complete loss of benefits placed an undue burden on older Americans. Many beneficiaries had been blindsided by unexpected demands for repayment, sometimes amounting to thousands of dollars due to SSA errors.
Now, as of March 27, 2025, the agency will revert to its previous policy. Recipients with overpayments will see their benefits entirely withheld until the SSA recovers the full amount.
“We have the significant responsibility to be good stewards of the trust funds for the American people,” said Acting SSA Commissioner Lee Dudeck in a statement.
Concerns Over Fairness to Seniors
While the SSA is legally required to recover overpayments, past enforcement of full withholding has sparked widespread concern. Some beneficiaries were ordered to repay tens of thousands of dollars within 30 days—even when the overpayment was due to SSA mistakes.
Senior advocates acknowledge the need for accurate benefits distribution but argue that reinstating full withholding will disproportionately harm older Americans already struggling with rising costs.
“Many beneficiaries may not be aware of an overpayment and could suddenly find themselves without a check,” said Shannon Benton, executive director of the Senior Citizens League, a nonpartisan senior advocacy group, in a statement to the Daily Mail.
Benton and other advocates are pushing for extended notification and repayment periods. They hope lawmakers will revive the Social Security Overpayment Fairness Act, proposed in May 2024. The bill, which had bipartisan support, would have granted a 120-day grace period before the government could begin withholding benefits for repayment. However, it has stalled in the House Ways and Means Committee.
Overpayment Recovery and Federal Cost-Cutting
The SSA’s overpayment policies have been a focal point in broader federal cost-cutting efforts. During a 99-minute congressional address, former President Donald Trump criticized the agency for alleged financial mismanagement, claiming it had been issuing payments to deceased beneficiaries.
“Now, we’re going to get fraud out of there,” Trump said. “We have people 250 years old and all, you know, tremendous fraud.”
However, SSA data suggests the issue is not as widespread as some claim. A July 2024 report from the SSA’s Office of the Inspector General found that between 2015 and 2022, the agency issued $71.8 billion in incorrect payments—less than 1 percent of the $8.6 trillion disbursed over that period.
As the SSA prepares to distribute $1.6 trillion in benefits in 2025, the debate over overpayment recovery policies remains a pressing concern for beneficiaries and policymakers alike.
Source: https://www.dailymail.co.uk/yourmoney/article-14482785/outcry-social-security-reinstates-policy-americans-shock-bills.html
