Social Security Reverses Plan to Withhold 100% of Benefits to Recoup Overpayments

As of April 25, the SSA will no longer require beneficiaries who have been accidentally overpaid to have 100% of their monthly benefit check withheld until the balance is paid, reversing an earlier decision.

By Kathryn Pomroy

last updated 2 May 2025

in News

my Social Security account — (Image credit: Getty Images)

The Social Security Administration is walking back its policy that would have required beneficiaries who had been accidentally overpaid to have 100% of their monthly benefit check withheld to pay down the balance. The change comes less than two months after the agency announced it would reinstate a longstanding policy of withholding 100% of benefit checks until the balance is paid off.

In an “emergency message” dated April 25, the Social Security Administration set a withholding rate of 50% of each monthly benefit check to recoup money from beneficiaries who were paid more than they were eligible to receive.

Generally, beneficiaries are responsible for reporting changes that could affect their eligibility or payments, such as a change in income. According to the SSA, incorrect or incomplete information from this self-reporting is a leading cause of payment errors, but some do arise from mistakes by the agency.

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“Improper payments have been a longstanding 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,” said Michelle L. Anderson, Assistant Inspector General for Audit and Acting Inspector General. “Without better access to data, increased automation, systems modernization, and policy or legislative changes, improper payments will continue to be a major challenge for SSA into the future.”

In a July 2024 report, the SSA’s Office of the Inspector General said there were about $71.8 billion in benefits — less than 1% of the $8.6 trillion paid out — in improper payments between fiscal years 2015 and 2022. While not all of these were overpayments, most fell into that category. In another report, the Office of Inspector General (OIG) said overpayments in the Old Age, Survivors, and Disability Insurance program added up to roughly $13.5 billion in the four years from 2020 until 2023.

“We have the significant responsibility to be good stewards of the trust funds for the American people,” said Lee Dudek, Acting Commissioner of Social Security. “It is our duty to revise the overpayment repayment policy back to full withholding, as it was during the Obama administration and first Trump administration, to properly safeguard taxpayer funds.”

The agency is required by law to try to reclaim any overpayments as they occur.

90-day grace period to appeal SSA’s claim

The 50% withholding applies to overpayments of retirement, family and survivor benefits, and Social Security Disability Insurance (SSDI). Most prior overpayments will remain subject to the 10% cap, established in March 2024, as will any overpayments of Supplemental Security Income (SSI).

The April 25 message from the SSA’s Office of Legal Policy and Office of Income Security Programs states that “language about the 10% withholding rate will be updated to 50% in outgoing overpayment notices.”

Beneficiaries who receive will have 90 days to appeal the agency’s claim that they were overpaid. They can also request a waiver of repayment, or a repayment rate below 50% for reasons of financial need. If no claim is made, withholding will begin after 90 days. The SSA has a fact sheet with more information on appeal and repayment options.

Requiring 100% repayment is not new

Opting to withhold 100% of benefits to reclaim what the agency has identified as overpayments isn’t new to the second Trump administration. The policy was also in place during the Obama administration and the first Trump administration. The reduced withholding rate of 10% was put into place in 2024 during the Biden administration because the 100% rate proved too difficult for some beneficiaries to pay. The announcement that the SSA will now withhold 50% of the monthly benefits should be a welcome reprieve for many.

For more information about overpayments and appeal rights, visit www.ssa.gov.

For the past 18+ years, Kathryn has highlighted the humanity in personal finance by shaping stories that identify the opportunities and obstacles in managing a person's finances. All the same, she’ll jump on other equally important topics if needed. Kathryn graduated with a degree in Journalism and lives in Duluth, Minnesota. She joined Kiplinger in 2023 as a contributor.