Some Social Security checks are shrinking in August

Millions of Social Security recipients are facing the possibility of sharply reduced benefits this summer after receiving letters warning of overpayments. The Social Security Administration (SSA) has begun issuing notices to individuals it says were mistakenly overpaid, and failure to act could lead to significant benefit cuts in the coming weeks.

Social Security

Overpayments occur when the government sends more money than a beneficiary is entitled to receive, often due to unreported changes in income, marital status or disability status. In some cases, the error stems from the SSA itself, such as clerical mistakes or miscalculations. Regardless of fault, the agency is legally obligated to recover the overpaid funds, a process commonly referred to as a “clawback.” Historically, the SSA’s approach to clawbacks has varied across administrations. Under President Joe Biden, the default withholding rate was lowered from 100% to 10% to ease the burden on beneficiaries. During the early Trump years, the rate briefly returned to 100% before ultimately being set at the current 50% threshold. This means the SSA can withhold up to half of a recipient’s monthly benefit until the overpayment is fully recovered.

Overpayment notices

The agency began sending overpayment notices under this policy on April 25, with a 90-day response window. Recipients who fail to respond by July 24 risk having 50% of their monthly benefits withheld automatically. However, the actual timing of benefit reductions will vary based on individual payment schedules and processing times. “The key nuance here is that the SSA does not uniformly reduce benefits on day 91,” explained Michael Liner, head disability attorney at Liner Legal. “The timing depends on when the SSA processes the reduction and the beneficiary’s regular payment date.” For some, the reduction could appear in August payments, which fall between August 2 and August 23, while others may see delays.

Social Security payments

Between 2015 and 2022, the SSA issued nearly $72 billion in improper payments, according to the Office of the Inspector General. While this represents less than 1% of total benefits, the impact on affected recipients can be significant. As of late 2023, $23 billion in overpayments remained outstanding. Beneficiaries receiving an overpayment notice have several options, but experts say quick action is critical. Those who believe the notice is incorrect can file a Request for Reconsideration to appeal. Others may apply for a waiver, asking the SSA to forgive the debt entirely if they can show that the overpayment was not their fault and repayment would cause financial hardship. Both forms require mailing, faxing or delivering documents in person; they cannot be submitted online. “There are multiple avenues available — including waivers, appeals and negotiated repayment plans — and engaging early can help avoid unexpected reductions and preserve flexibility in how the situation is resolved,” said Travis Stanley, president of the National Social Security Advisors.

Benefits reduced

For those who accept the overpayment but cannot manage the standard 50% withholding, the SSA allows beneficiaries to request a lower repayment rate by submitting a Request for Change in Overpayment Recovery Rate form. If no action is taken, benefits will be reduced starting on the date listed in the notice, typically the first payment after the 90-day window closes.

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