The Social Security Administration (SSA) is making some major changes to how much it collects from beneficiaries that it has overpaid. If you’re among those affected by the changes, you’ll want to take action so that your wallet remains intact.
In a recent news release, the SSA says it will increase the default overpayment withholding rate for Social Security beneficiaries to 100% of a person’s monthly benefit, which will help recoup “about $7 billion in the next decade.”
Social Security To Reclaim 100% of Monthly Benefit Overpayments
The move comes about a year after the agency announced that it would be reducing its recovery rate to 10% of monthly benefits after reports that some people were made homeless after the harsh repayment demands.
Here are some things to know about Social Security’s efforts to change their overpayment recovery rate back to 100%, including steps you need to take if affected.
1. When Do 100% Social Security Overpayment Recoveries Begin?
According to the news release, “As of March 27, the agency will begin mailing notices about the new 100% withholding rate, rather than the recent adjustment of just 10%.”
2. Who Will the 100% Social Security Overpayment Recoveries Affect?
The resumed 100%-rate overpayment recoveries, which the agency calls “a withholding rate change,” apply to new overpayments of Social Security benefits.
“The withholding rate for current beneficiaries with an overpayment before March 27 will not change and no action is required,” the agency says in the news release. “The withholding rate for Supplemental Security Income overpayments remains 10%.”
3. How Do Social Security Overpayments Happen?
Social Security overpayments occur due to a variety of reasons. Here are a few:
Incomplete Information
“Benefits are overpaid when we can’t accurately calculate your benefit amount because our information is wrong or incomplete. It can happen if you don’t share updates with us about what’s changed in your life, like your ability to work, living situation, marital status, or income,” it says on SSA.gov.
Work Not Reported
They can also occur “when someone does not timely report work or other changes that can affect benefits or when an individual chooses to continue receiving payments during an appeal,” the agency says.
SSA Miscalculations
In other cases, the SSA might just screw up in calculating your benefits, causing an overpayment.
That latter reason is why Money expert Clark Howard advises that people open an SSA.gov account and check it periodically to ensure that things are correct.
“The crazy thing is that you can see how much Social Security thinks you earned in a year,” Clark says. “That’s important because if they have the wrong figures, it could end up reducing the Social Security benefit you get forever.”
4. I’ve Received a Notice of Overpayment From Social Security. What Are My Options?
You have several options if you’ve gotten a letter from the SSA informing you that you were overpaid by the agency and that they want to recover the funds. But the first thing you want to do is read the notice very carefully. Here are the options that will be presented:
Do Nothing
If you’ve been overpaid Social Security benefits, you might choose to just sit tight and let the agency recoup its money. Just remember that as of March 27, 2025, new overpayments will be at a 100% recovery rate, which means your check could potentially be withheld, depending on the amount. That’s how it had been until about a year ago.
It will likely be a blow to your bottom line, but again, that is assuming, of course, that the notice is correct and you have the means to withstand that kind of repayment. Then again, there are other options like:
Work Out a Payment Plan
Social Security says it has flexible repayment options, which means they’re willing to work with you to reduce your rate or accept payment installments —but you’ll need to request them.
“If someone cannot afford full recovery of their overpayment, they can contact Social Security at 1-800-772-1213 or their local office to request a lower rate of recovery,” it says in the recent SSA news release.
Submit a Waiver Request
According to SSA.gov, you can also ask Social Security to waive collection of the overpayment, if you believe it was not your fault and you “can’t afford to pay it back,” it says in the recent news release.
Submit form SSA-632 Request for Waiver of Overpayment Recovery, which you can get online or by calling Social Security.
Here’s what the agency says online: “If you think you are not at fault and your overpayment is $1,000 or less, please request a waiver by calling 1-800-772-1213 or your local Social Security office. We may be able to quickly process your request by phone.”
“We examine every waiver request to determine if the person caused the debt and their ability to repay,” the agency says on its website.
Appeal
You also have the right to appeal the overpayment decision or the amount.
To start the process, here are your options, which must be done 60 days from the date you received the notice:
- In-person: Download and print out form SSA-561 Request for Reconsideration and bring the completed form to your local Social Security office.
- Online: Visit secure.ssa.gov/iApplNMD/start and begin the process, which requires that you have all supporting documents including forms, legal documents, and written statements on hand.
When you put your appeal in writing, remember to include an explanation on why you think you have not been overpaid, or why you think the amount being asked back is incorrect.
Final Thoughts
Social Security beneficiaries who are overpaid after March 27 will automatically be placed in full recovery at a rate of 100% of the Social Security payment, says the SSA.
That means you’ll need to do something if you don’t want to possibly have your whole Social Security check taken related to overpayment. Again, your options are:
- Agree to a payment plan
- Ask for a waiver
- Submit an appeal
If you have an online account at SSA.gov, all your notices and information about claims will appear there.
Clark recommends that Americans on the road to retirement have an SSA.gov account before they stop working.
“Most people won’t pay attention to this until age 50,” Clark says. “But I want you to have an account by age 30.”
Read our guide on how to open an SSA.gov account.
The post Big Changes Are Coming To Some Social Security Beneficiaries appeared first on Clark Howard.
