The U.S. Social Security Administration will begin collecting withholdings on outstanding debts and overpayments as of July 24, 2025. This is a cut that, until now, was 10%, but has been increased to 50%. SSDI and SSI recipients may also be affected. The only way to avoid this significant cut is to apply for a waiver, appeal or prior agreement with the SSA administration. If you fail to do any of these things within the time limit, you will see your monthly income cut in half. This is a serious problem for those recipients who live entirely on welfare payments.
If you are not sure whether or not your monthly payment will be affected, you can request that information by calling Social Security or logging into mySocialSecurity, and checking to see if you were notified of an overpayment before April 25. If you are one of those affected, they will be able to negotiate that 50% percentage with the SSA, as long as you can demonstrate that the amount received does not allow you to meet basic needs.
Social Security overpayments
The Social Security Administration reported between 2015 and 2022, a total of $72 billion in improper payments and overpayments. Given the delicate economic situation, Social Security needs to recover funds from wherever it can, and this seems to be one of the best ideas they have had. Although the percentage of overpayments is only 1% of the profits generated by the SSA, it is a pretty juicy amount. As of April 2025, the agency communicated to those affected that as of July, the amount of their income would be affected, experiencing a 50% reduction. What is the main problem with this measure? Many of the people who receive social benefits have no other income; they live exclusively on this money.
How will this 50% reduction affect?
If you received an overpayment notice on April 25, you will be one of those affected as of July 24, 2025. Until now, the discount was set at 10% of the gross monthly amount, but it has been increased to 50%. This cut affects multiple groups of people:
- SSDI beneficiaries, SSI and retirees. Those who have received an overpayment, those who have not reported changes in income, marital status or disability-related information to the SSA will see their amount reduced.
- Those who did not request a reconsideration or waiver of the debt within the available timeframe (by July 25).
This cut will remain in place until the debt is completely skipped, unless you prefer to pay it all at once, which can be done by credit card, check, or even by filing a waiver if you are on time, proving that it was an unrelated judgment and that the resulting amount does not allow you to meet basic needs. The cuts leave many people with negligible monthly figures: if the average pay is $1,580 for SSDI, you can go as low as $790.
How do I know if Social Security is going to apply the 50% cut?
There are several people who have filed claims for not having been notified of this cut, and many others who do not even know that they will be affected. How can I find out if my income will be cut in half as of July 25? Easy. You should contact the Social Security Administration by phone at 1-800-772-1213, or log on to mySocialSecurity, where you can check to see if you were notified of any overpayment before the 25th.
Is it possible to avoid being cut back?
The answer is yes. There is still time to request a waiver or claim. Depending on your case, you can claim that it was an administrative failure beyond your control. In addition, if you are one of those affected who live exclusively on this type of aid and you can demonstrate that the amount to be received does not allow you to cover your basic needs, the law allows you to negotiate a payment plan of less than 50%. All is not lost, but if you are one of those affected, you should get to work as soon as possible!