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Social Security reverses on overpayment

Benefits to be withhold until funds reimbursed

By: Mike Snider
USA Today

..... A new Social Security rule goes into effect Thursday. [03/27/2025]
..... No, not the change hat might require people to go to a Social Security Administration office in person to enroll in benefits. That one kicks in later this month. [03/31/2025]
..... But starting Thursday, [03/27/2025] the Social Security Administration will reverse its policy involving overpayment to recipients. Sometimes Social Security, which pays benefits to about 70 million people monthly, totaling about $1.6 trillion in 2025, pays a beneficiary more money than they should have gotten.
..... For any Social Security overpayment that occur after Thursday, [03/27/2025] recipient's future benefits will be withheld until the overpayment is reimbursed. For those beneficiaries currently reimbursing an overpayment, the more lenient withholding are will not change, the agency said.
..... The withholding rat of overpayment of Supplemental Security Income befits will remain at 10%
..... An overpayment can happen when a beneficiary fails to update a change in income, for instance, or the SSA incorrectly calculates benefits.
..... In an August 2024 report, the Social Security Administration's Office of the Inspector General estimated the agency made nearly $72 billion in improper payments - mainly overpayment - during fiscal years 2015-2022. That accounted for less than 1% of all benefits said during that period, but as of September 2023, the agency had $23 billion in uncollected overpayment, according to the report.

Lenient policy discontinued

..... Last year, [2024] the SSA had opted to begin withholding only 10% of a recipient;s benefits to recoup overpayment as a way of "significantly reducing financial hardship on people with overpayment," the agency said at the time.
..... The move came after Social Security faced negative media coverage in 2023 from KFF Helaht News and Cox Mada Group Television Stations, as well as "60 Minutes" about how the agency went about collecting overpayment, some of which happened more than a decade ago.
..... Some beneficialness lost their homers as benefits were cut off to make up an overpayment. "Innocent people can be badly hurt," then-Social Security chief Martin O'Malley said, according to the Detroit Free Press, part of the USA Today Network.
..... The Social Security Administration sought to reclaim overpayment from about 2 million people in the fiscal year that ended September 2023, according to KFF and Cox Media Group, which acquired information about SSA overpayment in a Freedom of Information Act request.

Repayment options

..... Moving forward, any beneficiary found to have been overpaid will "automatically be placed in full recovery at a rate 0f 100% of the Social Security payment," the SAA says. That means benefits will be docked until the overpayment amount is met.
..... "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," the agency said in the notice.
..... The SSA says it will wait at least 30 days (plus five mail days) from the date it has sent an overpayment notice before starting to collect the overpayment.
..... Those who are sent an overpayment notice can appeal the decision or the amount, the agency says. Beneficiaries can also ask Social Security to waive collection of the overpayment if they believe it was not their fault and can't afford to pay it back.
..... People can repay the overpayment by creidt card, online bill pay or check. More information on repayment is on the SSA website.
..... The SSA can also take money form a person's federal tax refund or garnish their wages if they were overpaid and are not getting benefits anymore or become delinquent in a repayment agreement, the agency has said. Delinquencies will be reported to credit bureaus.

'It is our duty' to revise policy

..... The change comes as President Donald Trump and the Department of Government Efficiency, headed by Elon Musk, are pushing to reduce federal spending. The Social Security Administration has said it plans to cut its workforce by more than 12%, cutting 7,000 employees.
..... These "significant workforce reductions," as the SSA described them, along with the closing of some offices could result in people facing a slowdown in the processing of benefits applications and longer waits for help from Social Security personnel.
..... "We have the significant responsibility to be good stewards of the trust funds for the American people," acting Social Security commissioner Lee Dudek said in a statement. "It is our duty to revise the overpayment repayment policy back to full withholding as it was during the Obama administration first Trump administration, to properly safeguard taxpayer funds."

Avoid an overpayment

..... There are some steps people can take to avoid an overpayment, according to finance site NerdWallet.
* Stay up to date: Beneficiaries should report their monthly income, martial status and any available resources that could affect the amount of their benefits They can call the agency to update their information or access their Social Security account Online.
* Be alert: If their benefit increases and they do not know why, beneficiaries should contact the agency. They can also call to ask how their benefits are calculated.
..... "Overpayment happen for several reasons,such as a beneficiary neglecting to update their income, martial status or work situation, or the SSA miscalculating how much it should bay," NerdWallet advises. "Regardless of who is at fault, beneficialness who receive overpayment from the Social Security Administration usually have to give back the money. Because taxpayers money funds Social Security benefits, the SAA is legally required to recover overpayment."

..... Contributing: Kinsey Crowley, Josy Garrison and Medora Lee, USA Today; Susan Tompor, Detroit Free Press

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