Starting in late July 2025, some Social Security beneficiaries could see their monthly payments reduced by up to 50%. This change is part of the Social Security Administration’s (SSA) new effort to recover around $72 billion in overpayments made from 2015 to 2022. These overpayments were primarily caused by unreported changes in income, marital status, disability status, living arrangements, and other administrative errors.
What Does This Mean for Social Security Recipients?
The SSA plans to recover these overpayments by withholding up to 50% of monthly benefits for people receiving Title II benefits, including:
Retirement benefits
Survivors benefits
Disability insurance (SSDI)
Previously, the SSA only withheld 10% of monthly payments to recover these overpayments. However, starting in late July 2025, this withholding will increase to 50%, unless the beneficiary:
Disputes the overpayment
Requests a waiver
Negotiates a lower withholding rate
Beneficiaries receiving Supplemental Security Income (SSI) will still be subject to the 10% withholding rate.
Key Dates to Remember
April 25, 2025: The SSA began notifying beneficiaries about overpayment issues.
July 25, 2025: Last day to respond before the 50% withholding begins automatically.
August 2025: Reduced payments will start for those who did not respond or address the overpayment issue.
Why This Change Matters
Social Security is a lifeline for nearly 69 million Americans, many of whom rely on it to avoid living below the poverty line. A reduction of even a small portion of their payments could cause significant financial hardship, especially for those with low incomes or health issues.
Shannon Benton from the Senior Citizens League stated, “Any amount of clawback could be catastrophic.” The impact of these reductions could be particularly damaging for those who are already struggling financially.
What Can You Do?
If you have been notified of an overpayment, you have options:
You can pay back the overpayment online.
You can request a waiver if the overpayment was not your fault or if repaying the amount would cause financial hardship.
You can appeal the decision if you believe the overpayment was made in error or if the repayment plan is unreasonable.
In 2023, the SSA faced significant backlash when they attempted to withhold 100% of benefits for overpayment recovery, which led to widespread frustration. In response, the SSA reduced the withholding rate to 50%.
Act Now to Avoid Big Payment Cuts
With the July 25 deadline approaching, it’s crucial for beneficiaries to review their notices, respond promptly, and take action to avoid major reductions in their monthly payments.
