MILLIONS of Americans are at risk of having their Social Security payments slashed starting in just days as the federal agency eyes a major benefits change.
The switch-up to a key payment policy means that beneficiaries will lose half of their July checks.
Next month’s regular Social Security payments will be handed out in three rounds – on July 9, 16, and 23 – based on a predetermined schedule that takes into account recipients’ birthdays.
Many Americans, however, are at risk of losing out on half of their July checks under the SSA’s new policy on overpayments.
Overpayment can occur due to a variety of factors, such as when a beneficiary fails to update a change in income, living situation, or marriage status, or if the agency makes a mistake when calculating their benefits.
The SSA dished out roughly $72 billion in improper payments from 2015 to 2022, the majority of which were overpayments, during fiscal years 2015-2022, per an August report from the Office of the Inspector General.
Americans with overpayments may see their Social Security payments axed in half starting in late July thanks to an “emergency” message the SSA issued in April, revealing that these beneficiaries would see 50% of their checks withheld.
The agency announced that it would start sending out overpayment notices on April 25, 2025, and would begin withholding half of the individual’s checks after roughly 90 days – or around July 24 at the earliest – until the overpayment is collected.
The 50% rate is applicable to Americans who were overpaid retirement, survivor, family, or disability benefits and notified after April 25.
Most overpayments before that date will see their benefits withheld at a rate of 10%, as will any Supplemental Security Income overpayments, regardless of when they occurred.
POLICY SHIFTS
The decision to withhold 50% marks a major U-turn from the agency’s previous announcement in March revealing that the SSA would withhold 100% of an American’s monthly payment until the entirety of their overpayment was collected.
“We are glad to see the SSA taking a step in the right direction here,” said Bill Sweeney, AARP’s senior vice president for government affairs.
“Oftentimes, these mistakes are actually Social Security’s fault – and slapping people with huge penalties for mistakes other people made just isn’t right.”
Previously, the federal agency withheld just 10% of an individual’s Social Security payment in order to recoup overpayments.
The SSA dropped the rate to that level beginning in March 2024 following negative media coverage in 2023 regarding the agency’s collection process.
There were reports of recipients – many with disabilities and meager incomes – being handed four- and even five-figure bills to recover overpayments.
Filing a waiver with the SSA
Those who cannot afford to pay back the overpayment amounts noted by the SSA or feel they should not have to can file a specific form.
The form is identified as SSA-632 on the SSA website and can be filled out and submitted at a local office. “If you agree that you have been overpaid, but you feel you should not have to pay it back because you did not cause the overpayment and you cannot afford to repay it, you should file Form SSA-632,” the SSA notes on its website. It also lists multiple repayment options. Recipients with additional questions are urged to call 1-800-772-1213.Sometimes the overpayments were years or even decades old.
As a result, some Americans faced eviction or foreclosure after their Social Security payments were cut in response to an overpayment.
“Innocent people can be badly hurt,” said then-Social Security chief Martin O’Malley. “And these injustices shock our shared sense of equity and good conscience as Americans.”
The federal agency attempted to collect overpaid amounts from roughly 2 million Americans in the fiscal year that ended September 2023, per KFF and Cox Media Group.
The U.S. Sun has previously reported on stories of Americans that were hit hard by costly overpayment notices.
One woman got a bill for $63,000 after the agency overpaid her, as Americans cried “Why are they doing this to people?”
In another case, the SSA waited over two years to tell a woman she owed $40,000, giving her just 30 days to repay and stopping her checks.
As the SSA begins to implement its 50% withholding rate for payments, the agency is rolling out other big changes.
For example, millions will have their benefits slashed under a Social Security age switch, and an expert revealed that they will have to wait longer to retire.
Plus, the agency is launching another “massive” change that could affect 400,000 daily – it’ll be “completed this year.”
2025 Social Security Payment Schedule
Social Security payments are handed out on the second, third, and fourth Wednesday of each month. Benefits will be paid out in 2025 on the following dates:
January 8, 15, and 22 February 12, 19, and 26 March 12, 19, and 26 April 9, 16, and 23 May 14, 21, and 28 June 11, 18, and 25 July 9, 16, and 23 August 13, 20, and 27 September 10, 17, and 24 October 8, 15, and 22 November 12, 19, and 26 December 10, 17, and 24 Read More Details
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