Bad news for Social Security beneficiaries: The SSA is coming back for the overpayments
The SSA has announced that it will tackle the issue of overpayment, estimated to represent less than one percent of all the more than 800 million payments made annually.
Elon Musk’s ‘Department of Government Efficiency’ is currently identifying potential savings, and the Social Security Administration (SSA) has become a major target.
Recent reports from CNN suggest that potential layoffs could affect more than 7,000 employees within the agency, along with the closure of offices across the country. This would limit public access to services for addressing questions and concerns. The DOGE website lists 47 SSA leases that will be closed, the vast majority of which are located in states that won Trump the White House in 2024.
Understanding the scale of the issue
Additionally, former President Donald Trump has highlighted the issue of overpayments, citing cases where individuals, who are far too old to still be alive, are still receiving benefits. With more than sixty million people receiving assistance from the SSA, it is unlikely that the distribution system is completely free of issues. A 2022 report from the Social Security Office of the Inspector General estimated that the agency made around 73,000 overpayments the previous year. While there is always room for improvement, this represents only a small fraction of the over 864 million payments made annually by the agency.
Nevertheless, the White House has announced additional measures to target overpayments from the SSA, declaring that it will seek to recover 100% of all funds mistakenly distributed.
In a blog posted by the SSA late last week, the agency said that it would "increase the default overpayment withholding rate for Social Security beneficiaries to 100 percent of a person’s monthly benefit" and believed that this would save around $7 billion over the next ten years.
Currently, when overpayments have occurred, the SSA only withholds ten percent of benefits, and starting on March 27, it will move to the 100 percent withholding rate. However, if you have received an overpayment you will not be impacted. The change will only apply to overpayments that occur after that date.
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