SSA Overpayment Withholding Rate Change for Social Security Beneficiaries
In a significant policy shift, the Social Security Administration (SSA) announced on March 7, 2025, that it will increase the default overpayment withholding rate for Social Security beneficiaries to 100% of their monthly benefits, effective March 27, 2025.
Overpayments occur when beneficiaries receive more funds than they are entitled to, often due to changes in income, marital status, or living arrangements or simply due to SSA error. By law, the SSA is required to recover these excess payments. In March 2024, to mitigate financial hardships, the SSA had reduced the withholding rate to 10% of a beneficiary’s monthly payment.
Starting March 27, 2025, beneficiaries who are identified as having been overpaid will have 100% of their monthly Social Security benefits automatically withheld until the overpayment is fully recovered. It’s important to note that this change applies only to new overpayments identified after this date; individuals already repaying overpayments will continue under their existing arrangements. Additionally, the withholding rate for Supplemental Security Income (SSI) overpayments will remain at 10%.
Beneficiaries who cannot afford the full withholding have options. They can contact the SSA at 1-800-772-1213 or visit their local SSA office to request a reduced recovery rate. Furthermore, individuals have the right to appeal the overpayment decision or request a waiver if they believe the overpayment was not their fault and repayment would cause financial hardship. The SSA will not pursue recovery while an initial appeal or waiver is pending.
Beneficiaries should stay informed about their payment statuses and promptly report any changes in their circumstances to prevent potential overpayments.
