The Social Security Administration will be cutting some American’s checks in half starting later this month to recoup nearly $72 billion in improper payments.
People who have received more Social Security benefits than needed can expect their monthly payments to be cut in half by around July 24 until the overpayment is repaid. The change will take place 90 days after the agency announced it would issue overpayment notices in late April.
Under the Biden administration, the agency withheld 10% of a Social Security recipient’s monthly benefits to recover overpayments following negative feedback from beneficiaries. The 10% withholding rate preceded the 100% withholding rate that briefly took effect under the Trump administration in March. The latter rate, however, was quickly reduced to 50%.
An overpayment often happens when a beneficiary does not update a change in their income or the agency incorrectly calculates benefits.
The SSA paid nearly $72 billion in improper payments between fiscal years 2015 and 2022, the agency’s Office of the Inspector General concluded in an August 2024 report. Most of the improper payments were considered overpayments, and the total number of improper payments accounted for less than 1% of the benefits paid during that seven-year period.
By the end of fiscal year 2023, the SSA had roughly $23 billion in uncollected overpayments.
The report also found that despite the SSA’s Office of the Inspector General making dozens of recommendations to prevent the issuance of improper payments, the agency failed to implement those recommendations.
“Improper payments have been a long-standing challenge for SSA. While the Agency has taken actions to address this challenge, it needs to do more, and OIG’s recommendations can guide the Agency as it determines those corrective actions,” Michelle Anderson, Assistant Inspector General for Audit and Acting Inspector General, said at the time of the report’s release.
“Without better access to data, increased automation, systems modernization, and policy or legislative changes,” she added, “improper payments will continue to be a major challenge for SSA into the future.”
Overpaid recipients can repay the overpayment via a credit card, online bill pay service, or check. If they want to contest their overpayment notice because they believe the overpayment wasn’t their fault or don’t have the money to repay it, they can file a request for waiver of overpayment recovery.
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The Trump administration has been overhauling Social Security benefits for retirees by ending paper checks and cutting the SSA’s workforce by 12%. Social Security reform is also included in the GOP mega bill currently before the Senate.
The White House touts a Council of Economic Advisers analysis of the “big, beautiful bill,” which specifies that 88% of all senior citizens who receive Social Security will no longer have to pay taxes on their benefits. Not including taxes on Social Security was one of the Trump administration’s priorities.
