Social Security Update: Thousands See Their Payments Reduced

Newsweek

6 days ago

Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
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Some Social Security recipients are to face steep benefit reductions this month, as the Social Security Administration (SSA) rolls out a new policy to recover billions in overpaid benefits.
Beginning in late July, the agency started withholding 50 percent of monthly payments from those with outstanding overpayment debts, a fivefold increase from the previous standard. The SSA announced the change in April, following years of scrutiny over its handling of overpayments.
Between 2020 and 2023, the SSA reported an estimated $32.8 billion in OASDI and SSI overpayments
How Do Overpayments Happen?
Overpayments are often caused by reporting delays, benefit miscalculations, or unreported income, particularly for those on disability or early retirement.
"Social Security overpayments tend to occur from errors in reporting, such as a time lag that naturally comes from reporting income via W-2, incorrect benefit calculations, failure to offset other government pensions, or changes in family status, i.e. divorce, death of a beneficiary, or children aging out of eligibility," Thomas Savidge, economist at the American Institute for Economic Research, told Newsweek.
Withholding is when the SSA keeps part of a monthly benefit payment back until the debt is paid off.
File photo of a Social Security card stacked between $100 bills and U.S. Treasury checks.
File photo of a Social Security card stacked between $100 bills and U.S. Treasury checks.
GETTY
In March, the SSA initially proposed withholding 100 percent of monthly benefits until debts were repaid, but later revised the plan. Under the Biden administration, the withholding rate was set to 10 percent following widespread reporting on the profound impact overpayment debts had on Social Security recipients, many of whom had no idea they were being paid too much money.
While the 50 percent rate is less severe, it still raises alarm among experts and advocates concerned about the policy's impact on low-income retirees and disabled individuals who rely on Social Security as their primary income.
"Collecting 50 percent of someone's Social Security benefits is very extreme. Most people on Social Security that has had an overpayment has no other income. Taking 50 percent of someone's income leaves them without the means to survive," Ashley F. Morgan, an attorney and owner of Ashley F Morgan Law, told Newsweek.
Morgan said her firm frequently sees these cases, particularly among people receiving disability benefits.
"If you earn more than allowed for a period of time, then your benefits have to stop," Morgan said. "Too often people earn money and fail to report the earnings to the Social Security Administration and the government only finds out after the overpayment has happened."
She also cautioned early retirees: "If you are currently 64 and collecting Social Security retirement and also working, you need to monitor your earnings. If you work too much, they will reduce next year's earnings to offset the overpayment."
For those struggling to manage repayments, both experts highlighted potential options.
"For those who feel that 50 percent withholding is unjust or causes severe hardship, there is legal recourse," said Savidge. "They can request a lower withholding rate, a waiver of recovery, and even appeal the overpayment decision."
Have you been impacted by a recent overpayment notice from the SSA? Get in touch at [e-mail]