According to the U.S. Social Security Administration, during the years 2015 and 2022, improper payments were made to beneficiaries from the administration that generated an amount of almost $72 billion. That is why, in July, the cuts of 50% will begin to those beneficiaries who received improper payments, in order to recover those funds.
Although this is a huge figure, it is really only 1% of total SSA benefits. However, it will be a huge problem for those affected. Martin O’Malley, Director of the SSA has called this process dangerous because it could affect innocent people if it is not done properly. Are you one of those people? Do you want to know if you will be affected? Then, keep on reading.
Social Security overpayments
It seems that July comes with bad news for taxpayers. Thousands of people were already worried about the deficit that retirement pensions are experiencing in the United States, when the Social Security Administration dropped this bombshell. It will proceed to recover 50% of the undue payments that have been received by taxpayers. Why is this happening?
According to a report from the SSA Office of Inspector General last August 2024, between 2015 and 2022, $72 billion in improper payments were issued! And not only that, but they were also amounts in excess of the stipulated amounts. In other words, there were people who received income that did not correspond to them, and decided to keep it. For the SSA, this represents 1% of the total benefits, but it is those affected who will suffer the consequences. As of September 2023, the agency owed $23 billion in unrecovered overpayments.
How do I know if I am affected?
Easy peasy. If you have received a payment that did not correspond to you and you have decided to keep it, you are in trouble. As of April 25, 2025, the administration began notifying those affected, giving them a period of 90 days from which they would begin to deduct 50% of that amount from their income.
How will SSA recover the funds?
The way in which the Social Security Administration has recovered funds over the years has been changing, especially due to the economic situation of the country.
- Prior to 2023: 10% of income was withheld each month.
- As of March 2024: 100% withholding was proposed until the debt was repaid in full.
- As of April 2024: the agency was forced to retract and withhold 50%. The measure was strongly criticized by society, which even reported cases of people losing their homes because of overpayments.
According to data released by KFF and Cox Media Group, the Social Security Administration counted 2 million people affected through fiscal year 2023.
I have an overpayment pending, what do I do?
If you have an outstanding overpayment, you should have received a notification from the SSA, either by mail or in your Personal Area of their web service. However, if you want to make sure, do the following:
- Check your Personal Area and make sure if you have any outstanding overpayment debt.
- If so, you can pay the full amount by credit card, electronic payment or check voluntarily.
- If you do have a debt but are unable to pay it, or believe it is a mistake, you can apply for a waiver.
It is not necessary to go to a physical office, but you can do it through their official website. - If you can’t afford the payment all at once, you can negotiate a payment plan with the SSA to get more time to pay the debt.
It is important to make sure wether you have an overpayment debt or not, as if you ignore it, you will see how the 50% of you monthly income will be taken in order to pay the debt.