New policy sparks concern among seniors as full repayment kicks in for overpaid benefits
A major change in how the Social Security Administration handles benefit overpayments takes effect Thursday. It could dramatically impact millions of Americans who rely on monthly Social Security payments.
What does the new policy do?
As of March 27, the SSA will begin withholding 100% of a recipient’s monthly benefit to recoup any overpaid funds. This change replaces the current 10% clawback rate put in place by President Biden.
The Office of the Chief Actuary estimates the change will save the government $7 billion over the next decade. But advocates say the policy could create serious hardship for vulnerable seniors.
Immediate clawback for overpayments
Anyone overpaid after March 27 will see their entire benefit withheld each month. This will continue until the SSA recovers the full amount. Payments will resume only after the overpayment is fully repaid.
The SSA says this return to full recovery follows policies used during the Obama and first Trump administrations.
“We have a duty to revise the repayment policy back to full withholding to safeguard taxpayer funds,” said Lee Dudek, acting SSA commissioner.
Seniors could face financial stress
Senior advocates say the new rule could hurt older Americans who rely on their monthly checks.
“This is especially unfair to seniors who don’t have outside help managing their finances,” said Shannon Benton of the Senior Citizens League.
Those who can’t afford to lose their full benefits should contact their local SSA office or call (800) 772-1213. They can request a lower withholding rate.
Office closures and job cuts won’t help
The policy comes during a major restructuring of the SSA. Elon Musk’s Department of Government Efficiency recently announced dozens of local SSA office closures.
The agency also plans to lay off about 7,000 workers, which has raised fears about delays in processing claims and offering help.
Leadership faces serious questions
On Tuesday, Trump’s pick to lead the SSA, Frank Bisignano, faced tough questions in the Senate.
Senator Sheldon Whitehouse accused the administration of trying to weaken trust in Social Security.
“Trump and Musk have been spreading false claims about fraud to discredit the system,” said Whitehouse. “Now they want to disrupt it from the inside.”
Bisignano pushed back. “My job is to make sure every beneficiary gets their payment on time,” he said.
Bottom line for Social Security clawback period
The Social Security clawback policy now puts millions at risk of losing their entire monthly income. Some can request adjustments, but they must act quickly.
Social Security currently supports about 69 million Americans, including retirees, disabled workers, and children.
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