The Social Security Administration (SSA) announced that it would begin a crackdown on overpayment reversing a previous policy of the Biden administration. Officials said that this policy change will recover about $7 billion over the next decade. According to the announcement made on Friday, the plan to increase the withholding rate from 10% to 100% will take effect on March 27, and will only apply to “new overpayments.” The administration said that the withholding rate for current beneficiaries with an overpayment before March 27 will not change, nor will the withholding rate for Supplemental Security Income overpayments.
What is Social Security overpayment?
When an individual gets more payment than he or she is entitled, it is called overpayment and the Biden administration had a lenient recovery. In many cases, the overpayments are the fault of the administration. In March 2024, the Biden administration came up with a policy of withholding only 10 per cent of a recipient’s benefit if there is an event of overpayment. But now, starting from March 27, there will be a 100 per cent recouping of overpayments to beneficiaries.
The 10 per cent decision came as the SSA faced a major backlash for its harsh rules about collecting overpayments and many people even lost their homes as their benefits were cut off to make up an overpayment.
What does 100 per cent withholding of benefits mean?
The administration will withhold 100 per cent of a recipient’s benefits until the overpayment is made up — starting from March 27.
Social Security payments came on the radar as President Donald Trump and Department of Government Efficiency (DOGE) chief Elon Musk claimed there has been massive fraud at the agency. Trump in his speech to Congress said the Social Security system is subject to “shocking levels of incompetence and probable fraud”. Without producing any evidence, Trump said his administration was “searching right now” to investigate purported instances of the government making Social Security payments to dead Americans who are listed as being up to 160 years old.
But Trump vowed that his administration won’t touch the payment. “I’m not going to touch Social Security, Medicare, Medicaid. Now, we’re going to get fraud out of there,” he said in his Sunday Fox News interview. “We have people 250 years old and all, you know, tremendous fraud,” he added
