Millions of Social Security recipients are at risk of seeing significant reductions in their monthly benefits due to a new policy introduced by the Social Security Administration (SSA). This policy, which is set to begin in April 2025, aims to recover funds from individuals who have previously received overpayments.
Recipients who have been notified of such overpayments will face a 50% reduction in their monthly payments if they fail to repay the outstanding amount. According to The Mirror, the SSA will allow recipients a 90-day window to resolve the issue before the reduction in benefits begins.
Why Are Social Security Payments Being Reduced?
The SSA is implementing a new policy aimed at recovering billions of dollars in overpayments. These overpayments are typically caused by errors in benefit calculations or failure by recipients to report changes in their income. Over the past decade, the SSA paid out approximately $72 billion in improper payments between 2015 and 2022, with the majority being overpayments.
While this represents less than 1% of the $8.6 trillion in benefits paid during that period, it highlights the scale of the issue.As of September 2023, the SSA had successfully recovered all but $23 billion of these improper payments.
When Will the Changes Take Effect?
The policy will officially begin on April 25, 2025, and recipients will be notified shortly after. If overpayments are not resolved within 90 days, the SSA will start withholding 50% of benefits.
The earliest reductions could start on July 24, 2025, marking a significant change from the previous practice of withholding just 10% of benefits.
Who Will Be Affected by the Benefit Reductions?
Anyone who has received an overpayment notice from the SSA is at risk of seeing their Social Security payments reduced. While the SSA hasn’t publicly disclosed the number of individuals impacted, it’s estimated that millions of Americans may be affected by this policy change.
What Options Do Recipients Have?
Recipients who have received an overpayment notice can repay the debt using checks, credit cards, or online payments through pay.gov.
If they cannot repay in full, they may be able to negotiate smaller monthly deductions from their benefits or set up a payment plan if they are no longer receiving Social Security benefits.
If Social Security recipients fail to repay the overpayments, the SSA can use other methods to collect the debt. These methods include withholding tax refunds, garnishing wages, or even seizing state payments.
In the case of a recipient’s death, the SSA may seek repayment from the recipient’s estate or beneficiaries. As stated by the SSA,
If you die before you fully repay an overpayment, we may seek repayment from anyone who receives benefits based on your record.
