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The Social Security Administration (SSA) has announced the reinstatement of its policy to recover overpayments made to beneficiaries by implementing a 100% withholding rate. This decision is particularly relevant for older individuals and retirees, who are seeing increased financial difficulties. The policy change is scheduled to be implemented on March 27 and comes amid efforts by the Trump administration to enforce more stringent financial oversight of the Social Security trust fund.
The SSA’s Office of the Chief Actuary projects that this change could yield approximately $7 billion in savings for the program over the next ten years. This move marks a significant shift from the previous limit of 10% on withholdings instituted in early 2024 during the Biden administration, which aimed to ease the financial burden on retirees required to repay substantial amounts, often due to administrative mistakes.
It’s important to note that the updated withholding rate will only apply to new overpayments of Social Security benefits incurred after March 27. Beneficiaries who received an overpayment prior to this date will maintain the current repayment terms, thus no action is required on their part. Additionally, the withholding rate for Supplemental Security Income (SSI) overpayments will continue at the rate of 10%.
Overpayments Under Review
According to a report from the SSA’s Office of the Inspector General, there have been around $71.8 billion in improper payments from fiscal years 2015 to 2022, accounting for less than 1% of the total $8.6 trillion disbursed. While not all of these cases were classified as overpayments, a significant portion did fall into this category. Another report highlighted that overpayments within the Old Age, Survivors, and Disability Insurance program reached approximately $13.5 billion from 2020 to 2023.
Lee Dudek, Acting Commissioner of Social Security, emphasized the importance of responsibly managing the trust funds dedicated to American citizens. She stated, “We have the significant responsibility to be good stewards of the trust funds for the American people. 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.”
Beneficiaries affected by overpayments after the cutoff date will have their monthly Social Security payments entirely withheld until the debt is settled. However, those who find it financially challenging to repay the full amount are encouraged to reach out to Social Security by calling 1-800-772-1213 or visiting their local office to request a modified repayment rate.
Moreover, individuals have the right to contest the decision regarding overpayments or the amount owed and can request a waiver for repayment if they believe the circumstances were not their fault or are unable to repay. It is important to mention that the agency will halt any recovery efforts while an initial appeal or waiver request is under consideration.
For comprehensive details regarding overpayments and associated appeal rights, please visitwww.ssa.gov.
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