Social Security Slashes Benefit Recovery Rate to 50 Percent

Social Security Slashes Benefit Recovery Rate to 50 Percent

Well, isn’t the Social Security Administration just the picture of generosity? They’ve magnanimously decided to reduce their withholding rate on Social Security benefit overpayments from 100% to a mere 50%. How thoughtful of them to only take half your livelihood instead of all of it. Slow clap, everyone.

According to an emergency message from the Social Security Administration (because apparently this qualifies as an emergency now), this “generous” 50% default withholding rate will apply to new overpayment notices sent after April 25 for Title II benefits. Meanwhile, Supplemental Security Income (SSI) benefits remain at a 10% withholding rate – truly the VIP treatment.

“Obviously, it’s better not to lose all of your income,” said Kate Lang from Justice in Aging, displaying a remarkable talent for understatement. She went on to point out that losing half your Social Security benefits might still result in homelessness. Who would have thought?

Understanding Social Security Benefit Overpayments (Or How the Government Giveth and Taketh Away)

Social Security benefit overpayments happen when Social Security beneficiaries receive more money than they’re entitled to. Sometimes it’s because beneficiaries failed to report changes in their circumstances. Other times, it’s because the agency itself messed up. But guess who pays the price either way? That’s right – you do!

When the SSA decides you’ve been overpaid, they kindly send a notice requesting immediate and full repayment. How considerate! You have a whole 90 days to:

• Request a reconsideration of the overpayment
• Apply for a waiver
• Negotiate a lower withholding rate

Otherwise, they’ll now take half your Social Security benefits until they’ve recovered every last penny.

This is just the latest in a series of policy flip-flops. Under Biden, the Social Security overpayment withholding rate had been lowered to 10% before briefly jumping to 100% and now settling at 50%. It’s almost as if they’re making it up as they go along.

“In the last 100 days, we’ve gone from as low as 10 [percent] to 100 and now to 50,” noted Richard Fiesta from the Alliance for Retired Americans. He called the 100% rate “ridiculously draconian and cruel.” As opposed to the current 50% rate, which is… what? Just regular draconian?

Challenges in Negotiating Social Security Repayment Terms (Good Luck With That)

Sure, beneficiaries can “attempt” to negotiate their Social Security repayment terms. And people can attempt to climb Mount Everest in flip-flops, too. Success isn’t guaranteed in either case.

“There are thousands of employees that individual beneficiaries are going to be dealing with,” Lang explained, noting these employees have “a lot of discretion” in what they decide. Translation: your financial future depends on whether the government employee you speak with had a good breakfast that morning.

Adding insult to injury, beneficiaries face long wait times when trying to schedule appointments with the Social Security Administration. Nothing says “we value your time” quite like making elderly and disabled people wait months to discuss why they shouldn’t be pushed into poverty.

The Social Security Administration did not respond to requests for comment about their overpayment recovery practices. Shocking, truly shocking.