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Starting in August, the Social Security Administration (SSA) will claw back overpayments, potentially reducing recipients’ checks by as much as half. Those who received a letter from the SSA regarding overpayment may need to rebudget their expenses as the agency moves to recoup excess funds.
Why Overpayment Happens
Overpayment can happen when a recipient earns more than estimated, changes their living situation or marital status, continues receiving benefits after no longer being disabled, doesn’t report changes on time or provides inaccurate information that leads to benefit miscalculations.
From fiscal year 2015 through 2022, the SSA improperly paid out less than 1% of total benefits—amounting to $72 billion in improper payments, most of which were overpayments—according to an August 2024 report from the SSA Office of the Inspector General. The report noted that at the end of fiscal year 2023, $23 billion remained uncollected.
Changes to Clawbacks and SSA Layoffs
The SSA announced in April that it would begin clawing back overpayments at a rate of 50%, up dramatically from the 10% withholding rate previously applied to recipients’ payments.
Recipients will receive a notice by mail requesting a full and immediate refund, with the option to request reconsideration or a waiver of recovery. Individuals may also request a lower withholding rate. If recipients do not make any of these requests, the SSA will withhold up to 50% of their payments after 90 days to recoup the overpayment. The motion began on April 25, 2025.
A Freedom of Information Act request obtained by KFF Health News revealed the SSA clawed back payments from over 2 million people in 2023, more than double the number the agency reported to Congress.
In February, SSA’s acting commissioner Leland Dudek announced plans to cut 7,000 of the agency’s 57,000 staff members, despite the number of calls to the agency skyrocketing since Trump took office, from 6.5 million in November to 10.4 million in March. An estimated 3,000 employees had accepted buyouts as of March, requiring them to leave by April 19.
Why It Matters
In 2025, nearly 69 million Americans receive Social Security benefits each month. According to the Pew Research Center, over 55 million rely on Social Security for retirement income, while millions more depend on it for disability benefits or cash assistance.
A study published by the Center on Budget and Policy Priorities (CBPP) shows that roughly half of Social Security recipients rely on their payments to stay above the poverty line. The report reveals that the program lifts more people above the poverty line than any other program in the country, and without it, 22 million more American adults and children would fall below the poverty line.
The program is especially critical for older women, who tend to earn less than men, and for people of color, who, according to a General Accounting Office study, tend to have higher disability rates and have lower lifetime savings than white workers. The report found that 38% of Latino workers and 35% of African American workers born between 1931 and 1940 had lifetime earnings in the bottom fifth of workers born in these years, while only 9% of Latino workers and 11% of African American workers reached the top twentieth percentile. In comparison, 17% of white workers earned incomes in the lowest fifth, while 22% had earnings in the twentieth percentile.
Without Social Security, the CBPP estimates the poverty rate among older Latino adults would rise from 19.8% to 45.6%, and among older Black adults from 20.1% to 49%.
How To Settle An Overpayment
You can repay an overpayment on the Social Security Administration website using a credit card, online bill pay or by mailing a check.
The SSA can withhold money from your federal tax refund or garnish your wages if you were overpaid and become delinquent in a repayment agreement. The SSA also reports delinquencies to credit bureaus, which can negatively impact your credit.
You can also appeal the decision or the amount, or request a repayment waiver if you suspect the overpayment was not your fault and you can’t afford to pay it back.