Social Security Resumes Full Overpayment Collection: What You Need to Know

Last year, Martin O’Malley, the commissioner of Social Security at the time, established a new policy for how the agency would recoup money sent to seniors, survivors, and Americans with disabilities who received overpayments they weren’t supposed to get.

The Social Security Administration (SSA) for a long time “clawed back” the overpayments by drastically reducing or even completely halting legitimately earned benefit checks, even if the overpayments were the result of a government error.

This left many recipients unable to pay their rent or even keep food on their tables. O’Malley called this “clawback cruelty.” He established a new policy directing the SSA to only withhold 10% of monthly benefits.

Now, the Trump administration has reversed that policy and is again reverting to automatically withholding 100% of monthly benefits, a move that could affect millions of Americans.

These aggressive recoveries mean some beneficiaries will be hit with repayment bills amounting to thousands of dollars​. In announcing the new policy late last month, the agency said in a news release that it was, “acting in the interest of fiscal responsibility which will save the government about $7 billion dollars over the next decade”.

We at Nash Disability Law strongly believe that this “100%” policy is savage and harmful, because it will leave some people with no benefit payments for months and even longer.

Fewer than 1% of the Social Security Administration’s payments are what the agency terms as “improper,” which can include both overpayments and underpayments, according to a 2024 report  from its inspector general.

The SSA says the new policy is not retroactive—if you were on a repayment plan prior to March 27, your withholding will remain at the previous 10% rate​. The new policy does not extend to Supplemental Security Income (SSI), a program based on financial need. The Social Security Administration says, “It is designed to help aged, blind, and disabled people, who have little or no income.”

Recipients whose benefits are withheld by Social Security could face another devastating effect: the loss of their Medicare coverage. Most Social Security recipients pay for their Medicare Part B insurance by having the premium cost deducted from their monthly checks.

At this time, it is unclear whether those who are subject to the 100% repayment policy will be able to arrange to pay their Medicare premiums through another payment system, or if the SSA will allow them to pay for their health care first before taking back the overpayments.

Overpayments are usually due to one of two issues: SSA employees didn’t update recipients’ records in a timely way, or disability benefits recipients didn’t alert the agency to changes as required by SSA rules.

As our Chicago disability lawyers advise our clients, if you are a Social Security Disability beneficiary and receive Supplemental Security Income (SSI),  Social Security Disability Insurance (SSDI) benefits, or both, and you are working—even if it is just part-time—report your gross wages to the Social Security Administration (SSA) on a monthly basis.

If Social Security hits you with a repayment demand and cannot afford the full recovery of the overpayment, you can contact Social Security at 1-800-772-1213 or at your local office to request a lower rate.

You also have the right to appeal the overpayment decision or the overpayment amount. You can ask Social Security to waive the collection of the overpayment if you believe it was not your fault and can’t afford to pay it back. The agency does not pursue recoveries while an initial appeal or waiver is pending.

The road to winning Social Security Disability benefits remains long and difficult to navigate. If you want knowledgeable and effective Chicago disability attorneys to guide you who will fight for your rights, partner with us at Nash Disability Law.

We’ll give you a free evaluation of your unique situation, and if you hire us, we only get paid when you win your case. It’s easy to get started, just call or email us today for your free case evaluation.