Social Security overpayments: FAQ
Seniors and others who received Social Security benefits that are more than they were entitled to will have 100% of the overpayment deducted from their monthly benefit, starting on March 27.
Repayment must be made within 30 days of receiving a written notification, the Social Security Administration said in announcing the change to its overpayment policy earlier this month.
The change reverses a policy that called for deducting 10% of a beneficiary’s monthly check for an overpayment under President Joe Biden. Under Presidents Barack Obama and Donald Trump’s first administration, 100% was deducted for overpayment.
“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,” said Lee Dudek, the acting Social Security administrator, in announcing the change earlier this month.
Still, the 100% rule will result in some people receiving no benefits for a period.
Biden’s 10% rule sought to “reduce overpayments but to mitigate the financial pain of beneficiaries who receive overpayment notices and somehow had to come up with the money to repay the program or have their benefits docked,” the National Committee to Preserve Social Security and Medicare, a Washington-based advocacy group, said in a statement. The 100% rule “needlessly punishes beneficiaries who receive overpayment notices — usually through no fault of their own.”
Here are some answers to questions about Social Security overpayments.
The 100% rule would result in the collection of about $7 billion in overpayments in the next 10 years, according to an estimate from the SSA’s Office of the Chief Actuary. That’s less than 1% of the total benefits paid annually. About $6.5 billion in overpayments were made in the federal fiscal year ended Sept. 30, 2022, or 0.5% of the total benefits paid, the Congressional Research Service said in a report last year.
Errors in the SSA’s database occur for many reasons, including faulty processing by SSA employees, incorrect interpretations of regulations and beneficiaries failing to report a change in their circumstances, such as the death of a spouse, the research service found.
The policy change only affects Social Security overpayments after March 27. Previous Social Security overpayments and Supplemental Security Income overpayments are still subject to the 10% rule, according to SSA.
“Immediately get on the phone — as long as it takes, which could be an extremely long time — and try to set up an appointment to challenge the claim or work out a repayment plan,” said the national committee’s Maria Freese. “If they can’t get through on the phone, they should write a letter to SSA detailing the information and fax it to the agency.”
Call 800-772-1213 or visit the local SSA office to request a lower rate of overpayment recovery. In addition, beneficiaries can request that SSA waive collection of the overpayment, if the beneficiary believe it was not their fault and/or cannot afford to pay it back. SSA does not pursue recoveries while an initial appeal or waiver is pending, the agency said.
Mitch Goldberg, president and financial adviser at ClientFirst Strategy Inc., a Melville-based investment and financial planning firm, said, “if someone is in dire straits, they need to reach out to SSA and ask for relief. You need to be proactive and take control of the problem.”
The reversal of the Biden policy is part of a larger drive by Trump and adviser Elon Musk to eliminate waste, fraud and abuse in the federal government. “In the private sector, the full overpayment would be paid back — why should it be any different with public sector?” said Richard Himelfarb, a political science professor at Hofstra University who studies the politics of Social Security. “This is a reasonable step to take.”
Seniors and others who received Social Security benefits that are more than they were entitled to will have 100% of the overpayment deducted from their monthly benefit, starting on March 27.
Repayment must be made within 30 days of receiving a written notification, the Social Security Administration said in announcing the change to its overpayment policy earlier this month.
The change reverses a policy that called for deducting 10% of a beneficiary’s monthly check for an overpayment under President Joe Biden. Under Presidents Barack Obama and Donald Trump’s first administration, 100% was deducted for overpayment.
“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,” said Lee Dudek, the acting Social Security administrator, in announcing the change earlier this month.
Still, the 100% rule will result in some people receiving no benefits for a period.
Biden’s 10% rule sought to “reduce overpayments but to mitigate the financial pain of beneficiaries who receive overpayment notices and somehow had to come up with the money to repay the program or have their benefits docked,” the National Committee to Preserve Social Security and Medicare, a Washington-based advocacy group, said in a statement. The 100% rule “needlessly punishes beneficiaries who receive overpayment notices — usually through no fault of their own.”
Here are some answers to questions about Social Security overpayments.
The 100% rule would result in the collection of about $7 billion in overpayments in the next 10 years, according to an estimate from the SSA’s Office of the Chief Actuary. That’s less than 1% of the total benefits paid annually. About $6.5 billion in overpayments were made in the federal fiscal year ended Sept. 30, 2022, or 0.5% of the total benefits paid, the Congressional Research Service said in a report last year.
Errors in the SSA’s database occur for many reasons, including faulty processing by SSA employees, incorrect interpretations of regulations and beneficiaries failing to report a change in their circumstances, such as the death of a spouse, the research service found.
The policy change only affects Social Security overpayments after March 27. Previous Social Security overpayments and Supplemental Security Income overpayments are still subject to the 10% rule, according to SSA.
“Immediately get on the phone — as long as it takes, which could be an extremely long time — and try to set up an appointment to challenge the claim or work out a repayment plan,” said the national committee’s Maria Freese. “If they can’t get through on the phone, they should write a letter to SSA detailing the information and fax it to the agency.”
Call 800-772-1213 or visit the local SSA office to request a lower rate of overpayment recovery. In addition, beneficiaries can request that SSA waive collection of the overpayment, if the beneficiary believe it was not their fault and/or cannot afford to pay it back. SSA does not pursue recoveries while an initial appeal or waiver is pending, the agency said.
Mitch Goldberg, president and financial adviser at ClientFirst Strategy Inc., a Melville-based investment and financial planning firm, said, “if someone is in dire straits, they need to reach out to SSA and ask for relief. You need to be proactive and take control of the problem.”
The reversal of the Biden policy is part of a larger drive by Trump and adviser Elon Musk to eliminate waste, fraud and abuse in the federal government. “In the private sector, the full overpayment would be paid back — why should it be any different with public sector?” said Richard Himelfarb, a political science professor at Hofstra University who studies the politics of Social Security. “This is a reasonable step to take.”