Social Security Administration Restores 100% Overpayment Recovery Policy

WASHINGTON, D.C. — The Social Security Administration (SSA) announced Friday it will reinstate a policy that allows the agency to recover 100% of overpayments made to beneficiaries, a controversial decision that had been previously abandoned due to public backlash.

Effective immediately for new overpayments occurring after March 27, the SSA will withhold the entire amount of a recipient’s monthly benefit to recover excess payments. This policy reversal brings the SSA back to the pre-2022 practice after criticism over cases where beneficiaries received unexpected bills demanding large sums with little notice.

In 2022, the SSA adjusted its recovery policy to allow a withholding rate of only 10% amidst growing concern from the public and advocates about the financial burden caused by full recovery. The agency cited that beneficiaries were often left financially vulnerable, as these repayment demands sometimes exceeded tens of thousands of dollars.

“People who are overpaid after March 27 will automatically be placed in full recovery at a rate of 100% of the Social Security payment,” the SSA stated in its announcement. However, the agency clarified that for individuals who received overpayments before that date, the 10% withholding rate will persist, as will the same rate for overpayments related to Supplemental Security Income (SSI) — a program designed for low-income seniors and disabled individuals.

Lee Dudek, the acting commissioner of the SSA, emphasized the agency’s responsibility to ensure accuracy in benefit payments. “It is our duty to revise the overpayment repayment policy back to full withholding,” Dudek said. “We have the significant responsibility to be good stewards of the trust funds for the American people.”

According to a report from the SSA’s inspector general, approximately 73,000 overpayments in the previous year were attributed to inadequate controls over calculating benefits correctly. The agency’s return to a 100% clawback policy is anticipated to recoup an additional $7 billion over the next decade, as the SSA pays out about $1.6 trillion in benefits annually.

However, critics argue that reinstating the full recovery policy will impose undue hardship on vulnerable Americans. A spokesperson for the National Committee to Protect Social Security & Medicare called the action misguided, claiming that beneficiaries typically do not cause the overpayments. “This action, ostensibly taken to cut costs at SSA, needlessly punishes beneficiaries who receive overpayment notices — usually through no fault of their own,” the spokesperson stated.

The response from advocacy groups highlights a growing concern about how policies aimed at fiscal responsibility intersect with the well-being of Social Security recipients, many of whom are already living on tight budgets.