Emergency Order: Social Security to Cut Benefits by 50% for Overpayment Cases

The Social Security Administration is retracting a proposal from March that intended to deduct 100% of several recipients' monthly benefits to recoup funds that were supposedly paid out excessively by the government.

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Rather than doing otherwise, the agency plans to withhold 50% of old-age, survivors, and disability insurance benefits, as stated in an " emergency message to personnel dated April 25.

For years, the agency has regularly suspended benefit payments to recover billions of dollars mistakenly distributed to recipients. However, they later realized these funds shouldn’t have been issued. Under President Joe Biden’s administration, a new policy introduced last year aimed to assist beneficiaries—many of whom struggle near the poverty line—by limiting repayment amounts to a maximum of 10%.

Another aspect of the chaotic strategy employed by the Trump administration regarding Social Security includes staff cuts And the warning issued by the acting commissioner, which has since been withdrawn , to essentially shut down the agency .

The urgent communication addresses the agency's policy of disbursing funds to recipients who weren’t entitled to them. Frequently, this leads to demands for repayment long afterward—when these sums can swell into tens of thousands of dollars or more per individual—even when the error originated with Social Security.

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Often, recouping the funds required retaining 100% of the monthly payments.

Many recipients, such as individuals barely managing with their monthly payments, have been issued overpayment notifications. 2023 investigation According to findings from KFF Health News and Cox Media Group, clawbacks were identified. have left some homeless , news outlets reported.

Following that report, Martin O'Malley, appointed by President Joe Biden in 2023 to lead the organization, aimed to address what he called "significant wrongs" that had pushed individuals into severe economic hardship.

In March 2024, O'Malley stated that the agency would cease " that clawback cruelty "of intercepting 100% of a beneficiary’s monthly check if they do not reply to a request for reimbursement. However, the agency will instead opt to deduct 10% from the recipient’s monthly benefits," he stated.

A year afterward, the Trump administration reversed that policy change , reverting to 100% withholding for new overpayments. "We have an obligation to reinstate the overpayment recovery policy to complete withholding, as it was under the Obama administration and the initial Trump administration, to effectively protect public funds," Acting Commissioner Lee Dudek stated. March news release .

Currently, as seen repeatedly over President Donald Trump’s initial 100 days in his second term, the administration is partially undoing the previous rollback.

This time around, it did not put out any press releases.

I believe our previous approach was more sound," O'Malley stated during an interview on April 28. "We examined different thresholds, and relying solely on your Social Security income with half of it cut off implies what? This could mean skipping payment on your heating bill for the month or choosing between purchasing medication and food.

So it was an ruthless policy before," he noted. At 50%, "it's only slightly less harsh, yet it remains unkind.

Holding back as much as half of the monthly benefits could "lead to significant hardships for numerous elderly and disabled individuals," according to Kathleen Romig, who previously served at the Social Security Administration with O'Malley and currently leads social security and disability policy at the center. Center for Budget and Policy Studies "Missing out on one of two Social Security checks could make it more difficult for numerous individuals to cover essential expenses such as accommodation, sustenance, and medical care," stated Romig.

The public relations department of the SSA did not reply to inquiries for this piece.

The urgent communication to SSA employees stated that this updated policy pertains to overpayment notifications issued starting from April 25. The message indicated at one point that the revised withholding percentage would be "as high as 50%." Should the individual not seek a reduced withholding rate, contest the decision through reconsideration, or apply for an exemption—assuming there’s no evidence of deceit or comparable misconduct—the administration plans to start reducing their benefits approximately three months later, according to the statement.

This does not pertain to the withholding of benefits within the Supplemental Security Income program, designed for individuals with disabilities and elderly persons who possess minimal income or resources. SSA explains The agency stated in March that the reduction in SSI benefits would still be limited to 10%.

Kate Lang, who leads federal income support efforts at the advocacy organization Justice in Aging welcomed the change away from full withholding but expressed disappointment that the agency did not return to a 10% rate. Lang described the agency’s handling as "disorderly and unclear."

"It leads to increased workload for SSA — more individuals will call with inquiries, more mistakes will occur that require correction, and there will be greater confusion and ambiguity regarding the situation," stated Lang.

“It’s a nightmare,” O'Malley stated, “not just for the staff dealing with all these changes in policy, but also for those who benefit from them.”

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