Social Security says it will restart clawing back 100% of overpayments to beneficiaries
The Social Security Administration (SSA) said it is reinstating a plan to recover 100% of overpayments to beneficiaries, a policy the agency abandoned last year after an outcry over cases in which the practice led some Americans to receive shock bills amounting to thousands of dollars.
In a statement, SSA said late Friday that it will increase the default overpayment withholding rate for Social Security recipients to 100% of a person's monthly benefit, the same level that it had in place before last year's reform. The agency is required by law to claw back overpaid benefits.
Because of public backlash over the 100% recovery policy, the agency last year had capped the withholding rate for someone who had been overpaid at 10% of the person's monthly benefit. On Friday, the SSA said it will start claiming 100% of benefit checks to cover new cases of overpayments, while the withholding rate for people with overpayments before March 27 will remain at 10%, as will the rate for overpayments for Supplemental Security Income, a program for low-income seniors and disabled Americans.
"People who are overpaid after March 27 will automatically be placed in full recovery at a rate of 100% of the Social Security payment," the agency said.
The 100% clawback policy had sparked an outcry after instances in which beneficiaries were hit with surprise bills that demanded repayment within 30 days. In some cases, the bills were for tens of thousands of dollars. If beneficiaries were unable to immediately pay the bill, the agency could dock their entire monthly Social Security payment, leaving some people financially destitute, as reported by "60 Minutes," KFF Health News and other media outlets,
In many cases, the overpayments were the fault of SSA. A 2022 report by the agency's inspector general found that about 73,000 overpayments that year were due to a lack of "effective controls over benefit-computation accuracy."
In the agency's new statement, SSA Acting Commissioner Lee Dudek said it is the agency's "duty to revise the overpayment repayment policy back to full withholding."
He added, "We have the significant responsibility to be good stewards of the trust funds for the American people."
Raising the clawback rate to 100% from its current 10% will increase the amount of recovered funds by $7 billion over the next decade, the agency said. SSA pays out about $1.6 trillion in benefits each year.
The revised policy will lead to financial hardships for many people faced with Social Security overpayments, according to the National Committee to Protect Social Security & Medicare.
"This action, ostensibly taken to cut costs at SSA, needlessly punishes beneficiaries who receive overpayment notices — usually through no fault of their own," a spokesperson for the advocacy group said in a statement. "Many overpayments are the result of errors on SSA's part."
Shannon Benton, executive director of The Senior Citizens League, noted the advocacy group supports the government recouping improper overpayments, but said an immediate 100% cut in benefits would take a toll on older Americans.
"The 'clawback' of payments is especially unfair to seniors who do not have external support to help manage their finances and track their benefits," she told CBS MoneyWatch in an email. "Many beneficiaries may not be aware of an overpayment and could suddenly find themselves without a check."
Social Security cuts
The reversal comes as the Social Security Administration is undergoing widespread job cuts and a reorganization under the Trump administration. With its staff already at a 50-year low, employees at the agency have told CBS News that the cuts could disrupt or delay services, including customer service delays and longer waits to qualify for some benefits.
While on the campaign trail, President Trump vowed not to touch Social Security, a promise he repeated Sunday on Fox News, although he added that his administration wants to root out "fraud" from the benefit system.
"I'm not going to touch Social Security, Medicare, Medicaid. Now, we're going to get fraud out of there," he said. "We have people 250 years old and all, you know, tremendous fraud," he added, referring to a false claim that people who are beyond the human lifespan are receiving benefits."
The cuts to Social Security's workforce could mean that more beneficiaries are subject to overpayment errors, the National Committee to Protect Social Security & Medicare said in the statement.
"Trump's SSA also is closing field offices across the country, meaning beneficiaries will have to wait longer and possibly travel farther to resolve their overpayment cases," the group said.
