Did you receive a letter about Social Security overpayments? Here’s what the new change means
Have you received a letter from the Social Security Administration (SSA)? If you're the recipient of an overpayment, you may owe the office some money.
Starting on Thursday, March 27, the SSA reversed its more lenient policy for returning overpayments. The SSA, which pays benefits to nearly 69 million people monthly in 2025, occasionally pays a beneficiary more money than they should have gotten.
An overpayment can happen when a beneficiary fails to update a change in income, for instance. Or the SSA can incorrectly calculate benefits.
Prior to last month's change, people who received an overpayment had 10% of their benefits withheld from each check to put toward repayment. That rate has now been ratcheted up to 100%, meaning those overpaid after March 27 will automatically be placed in full recovery and will receive no checks until the balance is resolved.
Letters notifying recipients of the new overpayment policy may be arriving in mailboxes this week, as the agency said it would begin sending out the notifications on March 27.
In an August 2024 report, the Social Security Administration's Office of the Inspector General estimated the agency made nearly $72 billion in improper payments – mainly overpayments – during fiscal years 2015-2022, as previously reported by Paste BN. That accounted for less than 1% of all benefits paid during that period, but as of September 2023, the agency had $23 billion in uncollected overpayments, according to the report.
What does the Social Security repayment change mean?
For any Social Security overpayments that occur after March 27, 2025, the recipient's future benefits will be withheld until the overpayment is reimbursed.
What if I'm already reimbursing an overpay?
For those who are reimbursing an overpayment from before March 27, the withholding rate does not change, the agency said.
What about SSI overpayments?
The withholding rate for overpayments of Supplemental Security Income benefits will remain at 10%.
If Social Security overpaid you, how do you pay it back?
Moving forward, any beneficiary found to have been overpaid will "automatically be placed in full recovery at a rate of 100% of the Social Security payment," the SSA says. That means benefits will be docked until the overpayment amount is met.
"If someone cannot afford full recovery of their overpayment, they can contact Social Security at 1-800-772-1213 or their local office to request a lower rate of recovery," the agency said in the notice.
The SSA says it will wait at least 30 days (plus five mail days) from the date it has sent an overpayment notice before starting to collect the overpayment.
You can repay the overpayment by credit card, online bill pay or check. For more information on repayment of overpaid benefits, visit the SSA website.
Can you appeal a Social Security overpayment?
If you are sent an overpayment notice, you can appeal the decision or the amount, the agency says. Beneficiaries can also ask Social Security to waive collection of the overpayment if they believe it was not their fault and can’t afford to pay it back.
Social Security discontinues its more lenient overpayment withholding plan
Last year, the SSA had opted to begin withholding only 10% of a recipient's benefits to recoup overpayments as a way of "significantly reducing financial hardship on people with overpayments," the agency said at the time.
The move came after Social Security faced negative media coverage in 2023 from KFF Health News and Cox Media Group Television Stations, as well as "60 Minutes" about how the agency went about collecting overpayments, some of which happened more than a decade ago.
Some beneficiaries lost their homes as benefits were cut off to make up an overpayment. "Innocent people can be badly hurt," then-Social Security chief Martin O'Malley said, according to the Detroit Free Press, part of the Paste BN Network.
How to avoid an overpayment of Social Security benefits
There are some steps you can take to avoid an overpayment, according to finance site NerdWallet:
Be alert: If your benefit increases and you do not know why, contact the agency. You can also call to ask how your benefits are calculated.Stay up to date: Report your monthly income, marital status and any available resources that may affect the amount of your benefits. You can call the agency to update your information or access your my Social Security account online.
"Overpayments happen for several reasons, such as a beneficiary neglecting to update their income, marital status or work situation, or the SSA miscalculating how much it should pay," NerdWallet advises. "Regardless of who is at fault, beneficiaries who receive overpayments from the Social Security Administration usually have to give back the money. Because taxpayer money funds Social Security benefits, the SSA is legally required to recover overpayments."
Why is Social Security changing its overpayment recovery process?
Consider it part of the overall plan President Donald Trump and the Department of Government Efficiency (DOGE), headed by Elon Musk, have to reduce federal spending. The Social Security Administration (SSA) has said it plans to cut its workforce by more than 12%, slashing 7,000 employees.
These “significant workforce reductions,” as the SSA described them, along with the closing of some offices, could result in people facing a slowdown in the processing of benefits applications and longer waits for help from Social Security personnel.
The SSA's switch to withholding up to 100% of a recipient's benefits until it has recovered any overpayments will result in about $7 billion in overpayment recoveries over the next decade, the agency says.
“We have the significant responsibility to be good stewards of the trust funds for the American people,” acting Social Security commissioner Lee Dudek said in a statement. “It is our duty to revise the overpayment repayment policy back to full withholding, as it was during the Obama administration and first Trump administration, to properly safeguard taxpayer funds
Contributing: Kinsey Crowley, Joey Garrison and Medora Lee, Paste BN and Susan Tompor, Detroit Free Press