Social Security Overpayment Recovery Rule: Starting March 27, 2025, the Social Security Administration (SSA) will make a big change that could hurt many people. If the SSA finds out someone was paid too much, they will now take back the full amount of their monthly check. Right now, they only take 10%. This new rule could leave many seniors without money they need to live.
Social Security Overpayment Recovery Rule
The SSA says they need to protect the money that funds Social Security. They want to get back $7 billion over the next 10 years. Lee Dudek, the Acting Commissioner of Social Security, said, “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.”
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Even though the SSA tries to pay the right amount, mistakes happen. When they overpay someone, the law says they must get the money back. But many people say this new rule is too harsh, especially when the SSA makes the mistakes.
Who Will Be Affected?
This new rule only applies to overpayments found after March 27, 2025. If the SSA found an overpayment before that date, they will still only take 10% of the monthly check. People who get Supplemental Security Income (SSI) will also keep the 10% rule.
Even though overpayments happen to less than 1% of people, the total amount is huge. Between 2015 and 2022, the SSA paid about $72 billion too much. That is a lot of money, even if it is a small part of all the payments they made.
How Do Overpayments Happen?
- People don’t tell the SSA about changes, like getting a job or earning more money.
- SSA workers don’t update records fast enough because the system is complicated.
- Some people take a risk by accepting overpayments, hoping they won’t get caught.
Ed Weir, a former SSA manager, explained that some seniors who work might not know if they will earn too much. If they do, they could lose their entire Social Security check under the new rule.
What Are the Risks?
One big worry is about Medicare. Many seniors have their Medicare premiums taken out of their Social Security checks. If the SSA takes the whole check, it’s not clear how Medicare will be paid. This could mean seniors lose their health insurance.
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“If you are on Medicare, it means you might not pay your Medicare, so you might lose your Medicare,” said Weir. “It’s a trickle-down effect.”
What Can People Do?
- They can appeal the decision using SSA Form 561 if they think the SSA is wrong.
- They can ask for a waiver using SSA Form 632 if the overpayment wasn’t their fault and paying it back would be hard.
- They can try to work out a smaller payment plan if paying the full amount would leave them without enough money to live.
“Two things have to be met for the payment to be waived: No. 1, it’s not your fault, and No. 2, you don’t have the ability to pay,” said Weir.
The SSA hasn’t explained everything about how Medicare and other deductions will work under the new rule. Seniors are encouraged to call the SSA at 1-800-772-1213 or visit their local office for help.
