Overpaid Social Security Benefits Could Cost Your Entire Check Later This Month

Social Security beneficiaries who receive more than they are owed could have their entire monthly check withheld under a new policy update.

The Social Security Administration (SSA) announced late Friday that it would automatically withhold up to 100% of monthly checks for beneficiaries who are overpaid until the full amount is paid back or beneficiaries contact a Social Security office. This change will be implemented on overpayments beginning March 27.

Overpayments can occur if beneficiaries report their situation incorrectly or if the agency makes a mistake in calculations. From 2015 to 2022, SSA made nearly $72 billion in improper payments, less than 1% of total benefits paid out during that time. According to a report from the Office of the Inspector General, the majority of those improper payments were overpayments.

Why Is the Rule Changing?

The SSA is required by law to retrieve benefits that the administration accidentally overpaid. Garnishing the benefits at 100% will save about $7 billion over the next decade, the SSA said.

“We have the significant responsibility to be good stewards of the trust funds for the American people,” Lee Dudek, acting commissioner of Social Security, said in a statement.

This reverses a policy from President Joe Biden’s administration, which decreased beneficiaries’ default overpayment withholding rate from 100% to 10% of a person’s monthly benefit. Previously, the policy to recoup overpayments by taking the full amount of a beneficiary’s check faced backlash. Beneficiaries received bills for up to tens of thousands of dollars, causing financial stress and sometimes homelessness, according to reporting by KFF Health News and Cox Media Group.

“If they don’t know that they’re being overpaid and they either don’t see or ignore the notice, it could result in them not receiving Social Security payment,” said Shannon Benton, executive director of The Senior Citizens League. “It’d be devastating for some seniors.”

What Does This Mean For You?

If beneficiaries receive more Social Security than they’re owed, they will receive notices by mail that they owe back the amount that was being overpaid. Beneficiaries have 30 days to pay back the amount in full.

Starting March 27, if beneficiaries cannot pay the amount in full, their Social Security benefits check will be completely withheld until the total is paid back unless they contact a Social Security office to create a payment plan.

Additionally, if you believe the overpayment was not your fault, you can appeal to receive a waiver for the debt. Recovering payments are not due while the appeal or waiver is pending.