A new Social Security Administration (SSA) rule requires beneficiaries who have been accidentally overpaid to repay 100% of the overpayment amount. This reverses a previous policy that limited recoupment to 10% of the overpayment amount. The Office of the Chief Actuary estimates this change will result in an increase in overpayment recoveries, resulting in about $7 billion in program savings over the next decade.1
What does this mean for impacted beneficiaries?
Beneficiaries who receive an overpayment on or after March 27, 2025, can expect to have up to 100% of their monthly Social Security benefit withheld until the debt is repaid in full. That’s significant because in many cases, overpayments can reach into the tens of thousands of dollars, which could cause economic hardship for beneficiaries who may not be aware of the overpayment and have already spent the money. It’s important to note that the rate for Supplemental Security Income (SSI) overpayments for adults with disabilities, or children and adults with little or no income remains at 10%.
If you cannot afford to repay the full amount, you can contact the SSA to request a lower rate of recovery or request a waiver of the overpayment if you believe the error wasn't your fault or that repayment would cause undue hardship. Note that the SSA will wait at least 30 days (plus 5 mail days) from the date of the overpayment notice before starting collection. As long as beneficiaries submit a request for reconsideration or waiver before 30 days has passed, case collection will not begin until a decision is made on your request.
What can you do to help prevent overpayment?
Overpayments occur for many reasons, from errors on the part of the SSA to changes in your life that are not reported in a timely manner. Keep in mind, you are responsible for reporting changes impacting your work status, earnings, income, resources, and living arrangements to the SSA to help avoid overpayments. You can find instructions for reporting changes at the agency’s website at SSA.gov. If you do receive an overpayment notice, don’t ignore it. File an appeal, waiver, or payment plan request promptly. To learn more, visit SSA.gov.
1) “Social Security to Reinstate Overpayment Recovery Rate.” SSA.gov, 7 MAR 2025, https://blog.ssa.gov/social-security-to-reinstate-overpayment-recovery-rate/.
This information was written by KRW Creative Concepts, a non-affiliate of the broker-dealer.
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