Social Security Retreats on Plan to Claw Back 100% of Benefits for Overpayments
Disability beneficiaries most affected
The SSA issues nearly $1.4 trillion in monthly payments a year to some 73 million Social Security and SSI recipients. The agency is required by law to try to claw back money when overpayments occur.
A July 2024 report from the SSA’s inspector general found that “improper” payments — those in the wrong amount — make up less than 1 percent of total benefit outlays. Most of these are overpayments, predominantly to people receiving SSDI and SSI, the two Social Security–administered programs serving people with disabilities.
Unlike retirement benefits, eligibility and payment amounts for these programs can change month-to-month due to strict limits on income from work (and, in the case of SSI, arcane rules on other financial and living arrangements).
Social Security allows some temporary exceptions to the earnings limits for disability beneficiaries who attempt to return to work. Jack Smalligan, a senior policy fellow at the Urban Institute, says research by his organization and others shows that overpayments often result from people “misunderstanding the [income] rules and not intentionally violating the rules.”
Reducing the recoupment rate “is helpful but not nearly enough,” Smalligan says. “Having their benefit reduced by 50 percent, potentially for several years, imposes a serious hardship on people who have been trying to leave the program by returning to work and haven’t succeeded.”
Beneficiaries are primarily responsible for reporting changes in income or other circumstances that could affect their eligibility or payments. According to the SSA, incorrect or incomplete information from this self-reporting is a leading cause of payment errors but some do arise from mistakes by the agency.
“Social Security needs to make sure these mistakes don’t happen in the first place,” Sweeney says, “but when mistakes do happen, Social Security needs to work with people to come up with a reasonable repayment plan.”