The Social Security Administration has announced the claw back of overpayments from 27 March 2025 with 100% withholding of beneficiaries’ checks. Before this, SSA will only withhold 10% of the previous rate for overpayments. This situation will result in financial hardship for many seniors beneficiaries, such as recipients who are on Medicare Part B Premium.
By implementation of this policy, SSA is trying to recover $7 billion over the next decade. Beneficiaries can use Form SSA-634 to request a change in overpayments recovery rate, request a waiver, or request a reconsideration if you believe you have not been overpaid or your overpayment amount is incorrect.
Social Security Overpayments
Social Security overpayments occur when beneficiaries receive benefits exceeding their eligibility. These repayments can be the result of various factors such as outdated income details, changes in living arrangements and marital status, and administrative issues.
The Social Security Administration has announced a policy change which will take 100% of a beneficiary’s monthly check to claw back the overpayment. This 100% figure is higher and a cause of financial stress because it’s up from the current 10% rate.
This change aims to expedite the recovery of overpaid benefits, but it’s a shocking surprise for some seniors who find themselves caught up in the overpayment issue. Many people are unaware of whether they have been overpaid until they do not receive a notice from SSA.
Understanding the Reasons Behind Social Security Overpayments
There can be several changes, but the two main changes include outdated information of beneficiaries due to the failure of reporting or miscalculation of benefits, or delays in updating records from the administrative side.
Some time after the medical evaluation, SSA determines the person is ineligible for disability benefits but continues to pay. This can also lead to overpayments.
According to the recent webcast about this issue, Weir has noted that many seniors who are under full retirement age but still working have doubts about whether they will reach the $23,400 earning cap or not.
They even don’t know social security holds back $1 for every $2 over this earning limit. To avoid Social Security Overpayments in the future, beneficiaries have to inform SSA regularly with their updated information.
When will SSA begin collecting Social Security Overpayments?
The SSA has announced that it will begin collecting overpayments from 27 March 2025. Previously, SSA withheld only 10% of the beneficiary’s monthly check to recover overpaid payments, but it will withhold 100% of the monthly social security benefits for individuals who have been overpaid after this date.
Recently, recipients of Medicare social security benefits are unclear about the deductions because many seniors pay for their Medicare part B premium based on the automatic deductions from their monthly checks.
Altman of Social Security Works has said that it’s not clear yet to recipients whether they have to arrange another payment system to pay medicare expenses or SSA will allow them to pay their health care before clawing back the remaining money. Weir has said that if you are enrolled in Medicare, then you can lose your coverage as a result of not paying it automatically.
How many people are impacted by Social Security Overpayments?
We know that the overpayments collection requires high effort, but the policy change has faced debate about its impact on seniors and others who have fixed incomes, and the fairness of withholding entire benefits checks.
While the 1% overpayments are the small share of the overall $1.6 trillion benefits paid each year, SSA is trying to recover $7 billion in the next decade by implementation of this new policy.
Nancy Altman, president of Social Security Works, an advocacy group for the benefit, told CBS MoneyWatch that usually people don’t realize they are overpaid because they assume that the government is giving them the proper amount. But if they get a letter from the government saying, ‘You owe $10,000’ that they don’t have, they will be really concerned.
How can beneficiaries waive Social Security Overpayments?
Although the social security overpayment policy change is challenging for many recipients, you have several options to handle overpayment issues, such as appealing the decision, requesting a waiver, or if they believe the overpayment was not their fault, they can ask for a lower payment rate of their bills.
The forms to take all these actions are available on the official website of SSA https://www.ssa.gov/manage-benefits/repay-overpaid-benefits. You can also use the social security assistance number at 1-800-772-1213 or visit their local office to request lower payment rates or waive your overpayments.