Picture waking up one morning to find that your main source of income has been cut in half. That is what just happened to one American couple of retirees. A husband recently shared on Facebook that he and his wife had their Social Security checks cut from $1,100 each to $550. “They cut me and my wife,” he explained, citing that they no longer could afford to pay their bills.
Their situation is not unique—and other Americans might end up with the same economic disadvantage.
Why are benefits being cut?
Earlier this April, the Social Security Administration (SSA) issued a statement with implications. It clarified that it would begin holding back up to 50% of monthly payments from individuals who have previously been overpaid. That encompasses payments under the Title II program, which covers retirement, disability, and survivor benefits.
Before this change, the SSA would normally withhold 10% of each benefit every month. With the policy change, though, the withholding rose to half of the benefit—unless the beneficiary takes action to protest.
The change came after the SSA admitted that it overpaid recipients by about $72 billion between 2015 and 2022.
Why does an overpayment happen?
Overpayments are for all sorts of reasons. Most often it’s just a backlog in processing updates, or because someone doesn’t report changes in their:
- Employment status
- Income level
- Home address
- Marital status
All it can take is one tiny mistake or lapse to add up to months—or years—of error miscalculation payments. And when the SSA does get around to catching up, the agency issues a notice demanding immediate payment, or begins making large deductions from benefits.
What can you do if you’re affected?
The SSA says that anyone affected is eligible to request:
- For a waiver, if repayment would cause extreme economic hardship
- A reconsideration, if they believe the overpayment was in error
- A lower withholding rate, instead of the whole 50%
There is a proviso, however: recipients only have 90 days from when they are contacted to respond. If they don’t, the 50% reduction takes effect automatically.
In the case of the couple in question, friends encouraged them to call Social Security right away to check if the reduction would be permanent or an error. For others, every second counts in order not to lose half their monthly allowance.
A growing crisis for seniors
This change in policy has frightened many of Social Security’s recipients. Some are being asked to repay tens of thousands of dollars, sometimes years later after getting the extra payments. One of the recipients was mailed a notice for $63,000, and another was told she owed $40,000, with only 30 days to repay.
These sudden cuts are catastrophic for seniors living on fixed incomes. Most are already barely getting by with higher food and rent prices, and sacrificing hundreds of dollars a month can be catastrophic.
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A plea for mercy and change
As more individuals speak out, there’s increased pressure on the SSA to manage overpayments in a more equitable and transparent manner. While the agency has a responsibility to safeguard taxpayer dollars, critics argue that reducing payments by 50% without much notice is excessive, particularly for seniors.
In the meantime, if you, or someone who represents you on your behalf, got a notice of overpayment, don’t wait. Contact the SSA, determine what you can do, and ask for their help. The sooner, the better, your chance to keep more of your check.
