The Social Security Administration (SSA) revealed that it is reinstating a plan to recover 100% of overpayments made to beneficiaries, a policy that was previously suspended last year. The decision to halt the plan came after widespread criticism, as many Americans received unexpected and overwhelming bills, sometimes amounting to thousands of dollars. The backlash was strong, with critics arguing that the practice placed unnecessary financial strain on recipients, particularly those already facing economic challenges. Despite the previous suspension, the SSA has decided to move forward with the plan once again.
The SSA, in a statement released late Friday, announced that it will raise the default overpayment withholding rate for Social Security recipients to 100% of their monthly benefits, returning to the level that was in place before last year’s reform. The agency clarified that, by law, it is obligated to recover overpaid benefits, regardless of the financial impact on recipients. This move follows the reinstatement of the controversial policy after it was previously suspended due to public backlash.
SSA Acting Commissioner Lee Dudek stated that it is the agency’s “duty to revise the overpayment repayment policy back to full withholding.” He emphasized the agency’s responsibility, saying, “We have the significant responsibility to be good stewards of the trust funds for the American people,” underscoring the importance of managing public funds properly.
In response to public backlash over the 100% recovery policy, the Social Security Administration (SSA) had previously set a cap on the withholding rate at 10% of a person’s monthly benefit for those who were overpaid. However, on Friday, the SSA announced that it would begin withholding 100% of benefit checks for new cases of overpayments. For individuals with overpayments that occurred before March 27, the withholding rate will remain at 10%, and this rate will also apply to overpayments under the Supplemental Security Income (SSI) program, which supports low-income seniors and disabled Americans.
The Social Security Administration (SSA) stated that raising the clawback rate from its current 10% to 100% will result in an additional $7 billion in recovered funds over the next decade. The agency also noted that it pays out approximately $1.6 trillion in benefits annually, highlighting the scale of the program and the financial impact of these changes.
In several instances, the overpayments were the result of mistakes made by the SSA. A 2022 report from the agency’s inspector general revealed that about 73,000 overpayments that year were caused by insufficient “effective controls over benefit-computation accuracy,” pointing to flaws in the agency’s internal processes that led to these errors.
