Seniors face financial strain from Social Security overpayments

The Social Security Administration (SSA) has recently announced it will reinstate a 100 percent withholding rate for overpayments. This decision means that seniors who received too much in benefits will have their entire monthly payments withheld to repay the overpayment. The change will affect overpayments made after March 27. Previously, under the Biden administration, the SSA planned to collect only 10 percent of a person's monthly benefit to recover overpayments. This new policy could hurt seniors who are already struggling financially. Many beneficiaries receive payments that have been incorrectly calculated through no fault of their own. The SSA's decision comes after a string of high-profile cases in 2024 where beneficiaries faced substantial repayment demands. Reports included a woman owing $62,000 for survivor benefits and a veteran facing a bill of $67,000. The agency stated that overpayments usually happen when beneficiaries fail to update their earnings or when there are delays in the agency's record-keeping. From 2015 to 2022, the SSA reportedly made around $72 billion in improper payments, mostly due to overpayments. Currently, the SSA has an uncollected overpayment balance of about $23 billion. Experts warn that reinstating the full withholding could create severe financial difficulties for seniors living on fixed incomes. Some lawmakers are seeking to address these issues. Senator Ruben Gallego has introduced a bill that would stop the SSA from recovering overpayments older than ten years. He argues that seniors should not be penalized for government mistakes, particularly those that occurred many years ago. If someone receives an overpayment notice, they have the option to request a waiver if they believe the issue is not their fault or if they cannot afford to repay it. Payments do not need to be made while the SSA reviews the situation.