Social Security recipients are facing potential reductions in their benefits this month, with some individuals seeing up to 50% of their monthly payments withheld. This follows a change in policy by the Social Security Administration (SSA) that begins in July 2025, aimed at recovering billions of dollars in accidental overpayments made to beneficiaries.
While overpayments have been a longstanding issue, the new policy marks a significant shift in how the SSA will reclaim these funds, potentially leaving millions of Americans with significantly lower benefits. For those affected, the process could be a financial burden, especially for those who have yet to arrange repayment plans.
The SSA’s New Approach to Overpayment Recovery
The Social Security Administration has recently begun taking a more aggressive approach to reclaiming overpayments. Starting in late July 2025, individuals who have been overpaid and have not repaid the funds will see 50% of their benefits withheld. This move is part of a broader effort to recover billions in uncollected overpayments.
According to records obtained via a Freedom of Information Act request, around 2 million people were targeted for overpayment recovery in the fiscal year ending September 2023.
While the SSA has not provided an exact figure for how many individuals will be affected this time, it is clear that a significant portion of Social Security and Supplemental Security Income (SSI) recipients will experience a reduction in their payments. Beneficiaries who received more money than they were entitled to, even through no fault of their own, are at risk.
Social Security payments for July will follow the usual distribution schedule:
- Thursday, July 3: For those who began receiving benefits before May 1997
- Wednesday, July 9: Birthdates between the 1st and 10th
- Wednesday, July 16: Birthdates between the 11th and 20th
- Wednesday, July 23: Birthdates between the 21st and 31st
What You Need to Know if Your Payment Is Affected
If you have been overpaid by the SSA, it’s essential to take action quickly to avoid significant financial strain. The SSA began issuing overpayment notices on April 25, 2025, and will begin withholding 50% of payments in late July, depending on when the recipient received their overpayment notice.
Repayment options include paying via online bill pay, credit card, or check. However, if repaying is financially unfeasible, recipients can request a waiver.
The SSA allows for waivers in cases where the overpayment wasn’t the fault of the beneficiary or if the repayment would cause undue hardship. Information about how to request a waiver or set up a repayment plan is available on the SSA website.
The SSA recommends that recipients who are awaiting payments allow up to three additional days for delivery before contacting them. This is especially relevant as the vast majority of beneficiaries (around 99%) now receive their payments electronically, reducing the chance of delays.
