As of 2025, approximately 69 million Americans rely on monthly Social Security benefits. The beneficiaries include retirees, people with qualifying disabilities, survivors of deceased workers, and dependent spouses and children of beneficiaries. Bad news for beneficiaries, as the SSA is targeting two million people. The SSA’s latest announcement will negatively impact the 2 million people due to withholding the benefits they depend on.
The SSA will be withholding 100% of benefits from these people
The announcement of the newly passed Social Security Fairness Act led to many people rejoicing. However, celebrations seem short-lived, as the Social Security Administration (SSA) retracted a previous decision to halt severe penalties for senior beneficiaries who received overpayments in their benefits. Now, seniors must “pay for the government’s mistakes.”
Overpayment in benefits commonly results from a mistake made by the government or beneficiaries’ failure to comply with the criteria, whether intentional or not. During fiscal years 2015 to 2022, the SSA approximately made $72 billion in wrongful payments and overpayments formed the majority of it. At the end of fiscal year 2023, 2 million people were overpaid and nearly $23 billion remained uncollected.
The Biden administration led to the SSA’s announcement of collecting 10% of a beneficiary’s monthly benefits rather than 100% to recover an overpayment. Now, according to media outlets such as USA Today, everything is changing again under the Trump administration. On March 7, the SSA announced that the 100% withholding rate would be reinstated to pay off the balance owed.
These people will be affected by the new regulation
There is good news and bad news. The good news is that beneficiaries whose benefits were withheld for overpayments before March 27, 2025, will continue with the 10% withholding rate. The new withholding rate will also not affect overpayments for Supplemental Security Income. The bad news is that the 100% withholding rate will apply to anyone overpaid after March 27.
“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.” – Lee Dudek, SSA acting commissioner.
An “emergency message” to SSA staff on April 25 declared that overpayments to retirees, survivors, and disability insurance beneficiaries would be affected by a 50% withholding rate. The problem is that many people do not always realize that they are overpaid. According to Nancy Altman, president of Social Security Works, seniors and disabled Americans receive little notice of overpayments and are then expected to pay back thousands of dollars.
The severe impact of the new withholding rate
In 2024, a disabled veteran with bipolar disorder shared his story with Newsweek. The disabled veteran received a notice letter from the SSA asking him to reimburse $67,000 due to overpayments. Three years before the notice, he requested a work review, which found zero issues with his payments. According to the SSA, overpayments could occur for two reasons:
- Failure to update earnings information or report other changes, or;
- Social Security employees do not update beneficiaries’ records promptly
If you might be affected, visit the SSA website to read more about the Social Security official statement to know what you might be able to do about the effects of the overpayment withholding policy.
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