Social Security to Reinstate Overpayment Recovery Rate

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When a person receives a Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) payment for which they are not entitled due to excess assets or income, the Social Security Administration may later assert an “overpayment claim” to recover those payments. As noted in our March 2024 newsletter, SSA would allow the individual to elect to repay the claim by having their SSDI or SSI payment reduced by 10 percent each month until the entire amount has been repaid.

As part of the administration’s governmental financial restructuring, the Social Security Administration has announced it will increase the default overpayment withholding rate for Social Security beneficiaries from 10 percent to 100 percent of a person’s monthly benefit. The Office of the Chief Actuary estimates this change will result in an increase in overpayment recoveries (i.e., a program savings) of about $7 billion in the next decade.

As of March 27, 2025, the agency will begin mailing notices about the new 100 percent withholding rate, rather than the recent adjustment of just 10 percent. The withholding rate change applies to new overpayments related to Social Security benefits. The withholding rate for current beneficiaries with an overpayment before March 27 will not change and no action is required. The withholding rate for Supplemental Security Income overpayments remains 10 percent.

People who are overpaid after March 27 will automatically be placed in full recovery at a rate of 100 percent of the Social Security payment. If someone cannot afford full recovery of their overpayment, they can contact Social Security at 1-800-772-1213 or their local office to request a lower rate of recovery.

Additionally, people have the right to appeal the overpayment decision or the amount. They can ask Social Security to waive collection of the overpayment, if they believe it was not their fault and can’t afford to pay it back. The agency does not pursue recoveries while an initial appeal or waiver is pending.

For the SSA press release, click here.