The Social Security Administration (SSA) under President Donald Trump has brought back a policy to recover over payments by withholding 100% of beneficiaries’ monthly payments. This has caused a lot of debate.
When it started on March 27, 2025, this policy was a big change from the old way of recovering over payments at a rate of 10% per month.
Background of the Policy Change
The SSA’s job is to make sure that the money from Social Security is given out correctly.
But over payment can happen for many reasons, such as when there are clerical mistakes or when beneficiaries’ income changes that are not reported right away.
In the past, the SSA would get back these over payments by taking a small percentage out of monthly benefits. This was done so that recipients would not have to go through too much financial trouble.
As of March 2024, Commissioner Martin O’Malley lowered the withholding rate to 10% in order to make things easier for people who were receiving benefits.
This policy was made so that people could pay their bills and manage their finances while paying back what they owed over time.
However, the current administration thinks that this approach is not enough to keep the Social Security program’s finances in order.
Rationale Behind the Reinstatement
Acting Commissioner Lee Dudek stressed the importance of going back to the full withholding policy, saying, “To properly protect taxpayer funds, we have to revise the over payment repayment policy back to full withholding, as it was during the Obama administration and the first Trump administration.”
The SSA thinks that this change will lead to the return of about $7 billion in funds over the next ten years.
Implications for Beneficiaries
Under the reinstated policy, beneficiaries who receive over payment notices dated after March 27 will see their entire monthly benefit withheld until the overpaid amount is fully recovered.
This means that individuals could face months without their expected Social Security income, depending on the size of the over payment.
It’s important to note that this policy applies only to new over payments identified after the March 27 implementation date. For overpayments identified before this date, the withholding rate remains at 10%.
Additionally, the withholding rate for Supplemental Security Income (SSI) over payments continues to be 10%.
Options Available to Affected Individuals
If a beneficiary can not handle their money because of the full withholding, they have a few options:
- Request a Lower Withholding Rate: Individuals can contact the SSA to negotiate a reduced withholding rate that aligns better with their financial situation. This can be done by calling 1-800-772-1213 or visiting a local SSA office.
- Appeal the Overpayment Decision: If a beneficiary believes that the overpayment determination is incorrect, they have the right to appeal the decision. During the appeal process, the SSA typically suspends recovery efforts.
- Request a Waiver: Beneficiaries who believe the overpayment was not their fault and who cannot afford to repay the amount can request a waiver. If granted, this would absolve them of the obligation to repay the overpayment.
Reactions from Advocacy Groups
A lot of advocacy groups and experts have strong feelings about the policy change.
Kathleen Romig, who is in charge of Social Security and disability policy at the Center on Budget and Policy Priorities, was worried and said, “The results are predictable: more needless suffering.”
In the same way, Kate Lang of Justice in Aging said, “Those who are most vulnerable and have the fewest resources will feel the harsh effects of this change.”
This policy’s return is in line with the Trump administration’s larger efforts to deal with budget issues related to entitlement programs.
In public, President Trump has said that he will protect Social Security and Medicare. His administration has also looked into ways to make sure that these programs can continue to run without losing money.
Some people say that these kinds of actions might hurt weaker groups more than others.
Looking Ahead
As the SSA implements this policy, beneficiaries are encouraged to stay informed about their rights and the resources available to them.
It’s crucial for individuals to promptly review any notices from the SSA and to take appropriate action if they are notified of an overpayment.
Engaging proactively with the SSA can help mitigate potential financial hardships and ensure that beneficiaries navigate the repayment process as smoothly as possible.
For more detailed information on overpayments and the appeals process, beneficiaries can visit the official SSA website.
In conclusion, while the SSA’s move to reinstate 100% benefit withholding aims to address fiscal concerns, it underscores the importance of balancing financial stewardship with the well-being of Social Security beneficiaries.
As this policy unfolds, its real-world impact on individuals will be closely monitored by both governmental and advocacy organizations.