In 2023, a news investigation shed light on the high overpayment rates Social Security has made to its beneficiaries. Up until March 2024, Social Security’s practice to recover the money was to take 100% of a person’s monthly benefit until the overpayment was paid in full. This was the case even if Social Security was at fault for the overpayment or the agency did not act in a timely manner to fix a mistake once they became aware of the problem. After the story broke and increased the public’s attention about Social Security’s role in issues with back payments, the agency amended its policy.
Now, Social Security will only take 10% of a beneficiary’s monthly benefit for those who have received overpayment notices after March 2024. A beneficiary can request a lower monthly percent if it would still allow the agency to recover the full amount within 60 months, or five years. This is an increase from the previous recovery period of only three years. Note, however, that this change does not apply to cases of fraud.
During this transition period, it’s possible that some beneficiaries may find themselves subject to 100% withholding, despite the new policy. If this happens to you, it’s important to take immediate action. Contact your local Social Security office to request a reduction in your withholding rate to the new standard of 10%. Additionally, if you have overpayments from before the March 2024 date change, reach out to your local office as you may be eligible for lower payments under the new policy.
Finally, remember you have the right to appeal any overpayment amount in whole or part if you believe the amount is wrong or that the overpayment was not your fault.
