Social Security Cuts Monthly Benefits in Half to Repay Overpayments

LisaCarter /
LisaCarter /

The Social Security Administration (SSA) recently rolled out a new policy, cutting down the hefty chunk it withholds from social security beneficiaries to repay overpayments. This change is a relief for many Americans who found themselves suffocating under the weight of 100 percent withholding, a practice previously employed by the agency.

Previously, if the SSA overpaid a beneficiary, they would suck up the entire monthly benefit until the overpaid amount was sucked dry. But hold your applause just yet because as of March 25, the SSA will only take a modest ten percent (or $10, whichever pinches harder) of the total monthly Social Security benefit to recover the overpayment. Exceptions are made for cases of fraud, of course.

Now, I know what you’re thinking: why not just take what’s owed and be done with it? Well, folks, that’s exactly what the SSA is doing. Still, they finally acknowledge that squeezing every penny out of vulnerable Americans isn’t the most humane approach.

The transition to this new policy is underway, but fear not if you’re still caught in the clutches of the old system. Just dial the Social Security’s National 800 Number and let them know you’re fed up with the old ways.

But here’s the kicker: this change only applies to fresh overpayments. If you’re already drowning in a sea of overpayment despair, you’ll have to make the first move. Contact the SSA or waltz into your local Social Security office and demand a fairer deal. And guess what? They’ll listen. If you propose a rate lower than ten percent and it won’t stretch the repayment beyond 60 months, they’ll probably sign off on it. That’s a whole two years longer than their previous rigid policy.

The SSA emphasized that you have options. You can challenge their overpayment decision or the amount or even plead poverty to waive the collection altogether. While your appeal or waiver is pending, the agency will lay off the collection sharks.

Martin O’Malley, the SSA commissioner, hailed this move as a step towards fairness. Finally, someone in power is acknowledging the sheer absurdity of leaving people on the brink of homelessness to recoup some extra dollars.

Now, let’s talk numbers. In fiscal year 2022, the SSA shelled out a whopping $1.26 trillion in social security benefits. But here’s the kicker: they overpaid a cool $6.5 billion. That’s just a tiny fraction, about 0.51 percent, but it’s a world of hurt for those affected.

And who’s been raising a stink about this? Surprise, surprise—it’s the lawmakers. Chairman Drew Ferguson from Georgia has led the charge, slamming the SSA for dumping this burden on hardworking Americans. He’s got a point; with a program as massive as Social Security, even a tiny error can send shockwaves through people’s lives.

Then you’ve got Senators Maggie Hassan and Bill Cassidy, tag-teaming to urge the SSA to get its act together. They’ve seen firsthand the havoc these overpayments wreak on vulnerable folks, and they’re not taking it lying down.

Even the U.S. Government Accountability Office (GAO) has weighed in, calling out the SSA for its lackluster efforts in reducing overpayments. They’ve been banging this drum for years, and the SSA is finally starting to listen.

Better late than never, right? The SSA is rolling out information exchanges with payroll data providers to nip these overpayments. It’s about time they started using some common sense.

So there you have it. The SSA is finally waking up to the reality that squeezing every last dime out of struggling Americans isn’t just heartless—it’s downright irresponsible. Let’s hope this marks the beginning of a more compassionate era in the Social Security Administration. I won’t hold my breath.