Social Security Debt? Newly Announced Policies Make Repayment Easier

In 2023, the Social Security Administration (SSA) came under fire for demanding billions in repayments from beneficiaries, including vulnerable groups, following overpayments that often weren't the recipients' fault.

Facing pressure from lawmakers and the public, the SSA just overhauled its overpayment procedures and incorporated these changes to help keep more money in your bank account.

Previously, the SSA could withhold 100% or the entire monthly benefit from recipients to recoup the overpaid amount.

By withholding entire benefits, the agency risked pushing people into a desperate situation, forcing them to choose between paying rent, buying groceries, or covering essential medications.

The policy change, which took effect on March 25, 2024, says that the SSA will only withhold 10% of your benefit, or $10 (whichever is greater), to recover the overpayment.

This new policy applies to both new and existing overpayments. Also, if you're currently having more than 10% withheld from your benefits due to an overpayment, you can contact the SSA to discuss lowering the rate.

There are some exceptions, such as overpayments resulting from fraud, but for most accidental overpayments, this change is a significant benefit.

The SSA's plan also includes making it "much easier" for beneficiaries facing overpayments to request a waiver. This applies if you believe the overpayment wasn't your fault or if repaying the full amount would cause financial hardship.

In addition to reduced withholding, the SSA announced a shift in how they determine fault in overpayments. Earlier, the burden of proof rested on the beneficiary to demonstrate they weren't at fault.

Now, the SSA will be responsible for providing evidence that the beneficiary caused the overpayment.

Previously, if you failed to respond to the SSA's demand for overpayment repayment, the agency could withhold your entire monthly benefit.

This practice is now discontinued. Instead, the SSA will use more measured approaches to recoup the overpayment.

Previously, beneficiaries facing overpayments could only request repayment plans lasting up to 36 months. This limited time frame could create a significant financial burden.

To ease this pressure, the SSA has increased the maximum repayment period to 60 months. This allows beneficiaries to spread out the repayment over a longer period, making it more manageable for their budget.

While these changes address existing overpayments, the SSA is also working on improving internal procedures to prevent them from happening in the first place.

The new Social Security Administration policy offers significant relief if you are facing overpayments. Instead of facing potential benefit seizures, you will see a smaller portion withheld to repay the debt and will be able to stretch your social security income.

Editor's Note: Generative AI tools helped write this story.