Policy changes: Social Security Administration’s new approach to overpayments
On March 25, the Social Security Administration (SSA) implemented new guidelines regarding overpayments that may affect the withholding rates from beneficiaries’ monthly checks. A significant departure from the previous policy, the new rules aim to reduce the financial burden on beneficiaries who have been overpaid due to benefit miscalculations.
Previous rule
Overpayments occur when the benefits due are miscalculated, resulting in beneficiaries receiving larger sums than they are entitled. When such errors are discovered, the SSA is legally obligated to seek repayment of the excess funds. Unfortunately, detection of overpayments can sometimes take years, leading to beneficiaries suddenly facing repayment notices amounting to tens of thousands of dollars.
Previously, the SSA could withhold 100% of a beneficiary’s total monthly benefit if they were found to have been overpaid. This policy often resulted in beneficiaries suddenly finding themselves without their expected monthly payments, leading to serious financial issues.
Supplemental Security Income (SSI) beneficiaries are particularly susceptible to overpayment issues due to the strict limits on their income and assets. The SSA recognizes this vulnerability and is taking steps to mitigate the burden on affected beneficiaries.
New rule and transition period
The new policy changes this drastically. Instead of collecting the entire monthly benefit, the SSA will now only collect either 10% of a beneficiary’s total monthly benefit or $10, whichever amount is greater. This move will ensure that beneficiaries still receive a significant portion of their originally expected benefits, even if they have been overpaid.
During the transition, some beneficiaries may still be affected by the old policy. Beneficiaries currently facing a withholding greater than 10% due to past overpayments are encouraged to contact the SSA directly at 1-800-772-1213 to request a modification of their withholding rates to align with the new policy.
In addition to adjusting the repayment rate, the timeframe for repayment plans has been extended to 60 months from the previous 36 months. The SSA is also making it easier for beneficiaries to request waivers, potentially absolving them from repayment if they were not at fault and are financially incapable of settling the debt.
Stay updated
These new policies mark a significant step forward in reducing the financial stress on Social Security beneficiaries. Beneficiaries are encouraged to stay informed about these changes and to contact the SSA should they have any concerns or questions.
