Millions of Americans rely on Social Security payments as a key source of income. But starting late July, some beneficiaries may notice a significant cut in their monthly checks. The reason? The Social Security Administration (SSA) is intensifying efforts to recover overpayments made in the past and it’s changing how much it withholds.
What are the changes?
Contrary to common fears, the reduced payments have nothing to do with Social Security’s long-term solvency. Instead, they stem from past overpayments, instances where the agency paid beneficiaries more than they were entitled to, either due to errors in reporting or miscalculations by the SSA itself. Overpayments can happen if a recipient fails to report changes in income, or if the SSA makes an error when calculating benefits.
$72 billion in improper payments over eight years
Between fiscal years 2015 and 2022, the SSA issued nearly $72 billion in improper payments, most of which were overpayments, according to an August 2024 report from the agency’s Office of the Inspector General. While these represented less than 1% of total benefits disbursed (nearly $8.6 trillion), the cumulative impact has been significant. As of September 2023, the SSA was still trying to recover about $23 billion in uncollected overpayments.
New rule: 50% withholding starts in late July
Beginning July 24, 2025, the SSA will start withholding 50% of monthly benefits from recipients who have been overpaid, a steep increase from the previous 10% rate. This comes after the SSA walked back a more aggressive plan introduced in March, which proposed withholding 100% of benefits until the full amount was recovered. That proposal sparked major backlash following media reports in 2023 about vulnerable recipients who lost their homes or faced financial ruin after abrupt benefit cuts. “Innocent people can be badly hurt,” then-SSA Commissioner Martin O’Malley said at the time. In the fiscal year ending September 2023, the SSA attempted to reclaim overpayments from around 2 million people, according to data obtained via the Freedom of Information Act by KFF and Cox Media Group.
The agency began issuing new overpayment notices on April 25, 2025, with a 90-day grace period before deductions begin, bringing the first wave of 50% benefit reductions to late July. Recipients have options if they receive an overpayment notice:
- Repayment: You can repay the owed amount via credit card, online bill pay, or check.
- Waiver Request: You can request a waiver if the overpayment was not your fault, if you cannot afford to repay it, or if you believe repayment would be unfair. Forms are available on the SSA website.