Sometimes, no news is good news. In this case, the saying holds some truth. Thousands of letters have been sent out to Americans. Millions of people might have been overjoyed as they recently received their Social Security payouts, and the amount might have seemed higher than anticipated. So, here is another saying: if something seems too good to be true, it usually is. Unfortunately, many Americans received overpayments, and this time, the SSA is not messing around when it comes to collecting overpaid benefits.
Thousands of letters are declaring overpaid benefits
Approximately 69 million Americans receive monthly payments from the Social Security Administration (SSA), and it is crucial to ensure accurate benefit calculations to avoid overpaid benefits. An overpayment can occur for many reasons. The SSA might have made an error, or beneficiaries might have inaccurately declared their income, employment, or other relevant eligibility changes (accidents do happen).
Since March 27, thousands of beneficiaries might have received letters notifying them of their overpayments. Those who received overpayment letters will now have to face a stricter repayment policy after a substantial shift in procedure. Thankfully, there is a silver lining to every cloud.
The withholding rate remains at 10%
Recipients of Supplemental Security Income (SSI) benefits need not worry, as the procedure for repayment remains the same, with the withholding rate remaining at 10%. The SSA hopes the SSI exception will help prevent an uncontrolled financial struggle for lower-income beneficiaries. Another exception is, if you have been settling overpayments before the new procedure was announced on March 27, your withholding rate will remain unchanged.
The SSA is out to get its money back
The SSA announced that the Office of the Chief Actuary estimates the change to full withholding will result in an increase in overpayment recoveries of about $7 billion over the next decade.
Before the substantial shift, 10% of each check of the beneficiaries was withheld if they received an overpayment. Since March 27, the rate has increased to 100%. This means overpaid beneficiaries will be placed in full recovery until the balance has been settled. They will have to kiss their benefits goodbye for the time being.
This is what you should do if you receive a notice
If you received the bad news, it would be best not to wait before you act. According to the Social Security overpayment policy, the overpayments due can be settled by credit card, online bill pay, check, or money order. If you cannot afford the full withholding rate, you have the option to submit a waiver or reconsideration request.
You will have 30 days (including five mail days) from the day you received your notification letter to request a waiver or reconsideration before the SSA starts collection. If a waiver or reconsideration request was submitted after 30 days, collection will not begin until a decision regarding the request has been made.
“If someone cannot afford full recovery of their overpayment, they can contact Social Security at 1-800-772-1213 or their local office to request a lower rate of recovery.” – The SSA
Even though we hate being the bearers of bad news, it is best that you are made aware of the SSA’s change in overpayment collection policy. Whether the mistake was made by the SSA themself, or a discrepancy accidentally snuck in on your personal information declaration (we definitely do not judge), it would be best to familiarize yourself with the Social Security overpayment policy. If you did not receive a letter but feel concerned, make sure to check your benefit status and consider reaching out to the SSA for clarification or assistance if necessary (they do not bite, we promise!).
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