Social Security beneficiaries who owe money to the Social Security Administration in the form of an overpayment will now have less money withheld from their monthly checks. On March 25, 2024, Social Security announced that it will decrease the default overpayment withholding rate for Social Security beneficiaries to ten percent or $10 whichever is greater. Previously, SSA would withhold 100% of a person’s total monthly Social Security benefit payment in order to recoup an overpayment. The new policy will now only allow SSA to withhold 10% of a beneficiary’s total monthly benefit or $10, whichever is greater.
An overpayment occurs when the amount of benefits due is miscalculated resulting in higher sums being paid by Social Security than what the beneficiary is owed. In October of 2023, Social Security announced that it would be reviewing the agency’s policies on overpayments. As a result of that review, Social Security is changing its procedures on overpayments. Social Security Commissioner Martin O’Malley stated, “Social Security is taking a critically important step towards our goal of ensuring our overpayment policies are fair, equitable, and do not unduly harm anyone. It’s unconscionable that someone would find themselves facing homelessness or unable to pay bills, because Social Security withheld their entire payment for recovery of an overpayment.”[1]
Social Security announced the maximum time for repayment plans is being extended to 60 months from 36 months. Social Security has also stated that it will now be easier for beneficiaries to request a waiver.
During the transition period, beneficiaries placed in 100 percent withholding should call Social Security’s national number at 1-800-772-1213. Similarly, if beneficiaries have an overpayment with a withholding rate greater than 10 percent and would like a lower rate, they should call the same number. If a beneficiary requests a rate lower than ten percent, a representative will approve the request if it allows recovery of the overpayment within 60 months. If the beneficiary’s proposed rate would extend recovery of the overpayment beyond 60 months, the Social Security representative will gather income, resource, and expense information from the beneficiary to make a determination.
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[1] https://blog.ssa.gov/social-security-eliminates-overpayment-burden-for-social-security-beneficiaries-automatic-overpayment-recovery-rate-reduced-to-10-percent/