The Social Security Administration will now withhold 50% of a person's monthly benefit for overpayments, a retreat from the 100% default overpayment withholding rate announced in March, according to an "emergency message" sent in late April.
The message provides interim guidance to government workers and informs them of the policy change. A 10% withholding rate will still apply to Supplemental Security Income benefits. The guidance took effect April 25.
SSA announced in mid-March that it would increase the 100% default overpayment withholding rate, undoing a policy change enacted less than a year ago that set the rate at 10%.
On March 27, the agency said it began mailing notices about the 100% withholding rate, which applies to new overpayments of Social Security benefits.
The new guidance also states that individuals have 90 days to request a lower rate of withholding, a reconsideration of the clawback decision, or a waiver.
With the new emergency message, "the Trump administration is beginning to retreat in the face of public outrage, but fifty percent is still way too high," Nancy Altman, president of Social Security Works, told ThinkAdvisor on Thursday in an email. "Imagine losing half your income overnight. When the overpayment is through no fault of the beneficiary, the government should absorb the cost."
Further, "there is so much focus on overpayments but no effort at all to correct underpayments, when beneficiaries get less than the amount for which they are eligible," Altman said. "Both underpayments and overpayments are now far harder for beneficiaries to correct, since Elon Musk's DOGE has hollowed out Social Security."
Added Altman: "No one should be satisfied by this change. Instead, they should call their members of Congress and tell them that Social Security should stop clawing back overpayments that were no fault of the beneficiary, and focus on correcting underpayments instead."
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