Social Security issues ’emergency message’: What to know

The Social Security Administration (SSA) has rolled back a recently announced policy on benefit overpayments.

Newsweek has contacted the SSA for comment via email.

Why It Matters

Benefit overpayments can result from the SSA’s mistake or from beneficiaries failing to comply with requirements, intentionally or otherwise.

The federal agency has lost billions due to overpayments in recent years. From fiscal years 2015 through 2022, the SSA is estimated to have made nearly $72 billion in improper payments, the majority of which were overpayments. By the end of FY 2023, the SSA had an uncollected overpayment balance of $23 billion.

What To Know

On March 7, the federal agency announced it would reinstate the 100 percent withholding rate when attempting to clawback incorrectly paid benefits, beginning on March 27 this year.

This meant that any overpayment made by the SSA would see the recipient’s benefits withheld entirely to pay off the balance.

But now, the SSA will default to withholding 50 percent of old-age, survivors, and disability insurance benefits, according an “emergency message” to staff on April 25. This means that if a beneficiary is found to have overpaid, half of their benefits will be withheld to pay down the balance.

At the time of the original announcement, acting commissioner Leland Dudek said the SSA has a “significant responsibility to be good stewards of the trust funds for the American people” and that it has a “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.”

The SSA did not issue a press release for the most recent policy change.

The SSA and Overpayments

The March 7 announcement undid a Biden-era policy, introduced under former commissioner Martin O’Malley, that decreased the default overpayment withholding rate for Social Security beneficiaries to ten percent, or $10, whichever is greater, down from 100 percent. That policy has been in place for a year until the current acting commissioner, Dudek, changed it.

The change came after significant reporting on overpayments from a number of news outlets, including Newsweek, who spoke to seniors and disabled Americans who had been asked to pay back thousands of dollars with little notice after being overpaid by the SSA.

One woman told Newsweek she was hit with a $62,000 bill for overpayments relating to Social Security survivor payments she received after her father died while she was just a child. Another, a disabled veteran with bipolar disorder, told Newsweek he had received a letter from the SSA requesting he pay back $67,000.

What People Are Saying

Martin O’Malley, SSA commissioner under Biden, said on April 28: “I think that we had the policy right before. We looked at the various break points, and if you would depend entirely on your Social Security check, having half of it interrupted means what? That means you go without paying your heating bill for the month; that means you’d go without your medicine instead of buying medicine and food.”

What Happens Next

The new policy went into effect on April 25.