Social Security Overpayments: What You Need to Know About Potential Benefit Withholdings
Key Takeaways
- The Social Security Administration may now withhold your entire monthly benefit if you’ve been overpaid
- A policy change allows the SSA to reclaim 100% of overpaid Social Security benefits
- You have options if you’re facing an overpayment notice, including appeals and payment plans
If you’re a Social Security beneficiary, a new policy could dramatically impact your monthly check. Starting March 27, the Social Security Administration (SSA) will automatically withhold up to 100% of your monthly benefits if you’ve received more money than you’re entitled to receive.
How Social Security Overpayments Occur
Overpayments can occur in several ways. Sometimes beneficiaries accidentally report information incorrectly. In other cases, the Social Security Administration might make a calculation error. Between 2015 and 2022, the agency made nearly $72 billion in improper payments, though this represents less than 1% of total benefits distributed during that period.
Understanding the New Social Security Policy
Lee Dudek, acting commissioner of Social Security, explained the rationale behind the change: “We have a significant responsibility to be good stewards of the trust funds for the American people.” The new policy aims to recover approximately $7 billion over the next decade by reclaiming overpaid benefits.
This marks a significant shift from a previous Biden administration policy that limited benefit withholdings to just 10% of a monthly check. Under the new rules, you could potentially lose your entire Social Security payment if an overpayment is discovered.
What to Do If You Receive a Social Security Overpayment Notice
If you receive a notice about an overpayment, don’t panic. Here are your options:
1. Review the Notice Carefully
You’ll typically have 30 days to respond to the overpayment notice. Carefully examine the details and verify the accuracy of the claim.
2. Contact the Social Security Office
Shannon Benton from The Senior Citizens League warns that ignoring the notice could be devastating. “If you don’t address an overpayment, you might stop receiving Social Security payments entirely,” she cautions.
3. Explore Your Options
You can:
- Request a waiver if you believe the overpayment wasn’t your fault
- Negotiate a payment plan
- Appeal the overpayment determination
Importantly, any appeals or waiver requests will pause the recovery process, giving you time to resolve the situation.
The Bottom Line
While the new Social Security policy might seem harsh, the SSA provides multiple avenues to manage unexpected overpayments. Stay proactive, communicate with the agency, and don’t let an overpayment notice catch you off guard.
