The Social Security Administration (SSA) has announced a new policy that reduces the default withholding rate to 50 percent for recovering Social Security benefit overpayments under Title II, the federal program covering retirement and disability insurance.

Under the updated directive, any overpayment notice issued on or after April 25 will automatically carry a 50 percent withholding rate. Beneficiaries will have 90 days to respond—either by contesting the overpayment, requesting a waiver, or negotiating a lower repayment rate. If no action is taken within that window, the SSA will start withholding half the monthly benefit until the overpayment is fully repaid.

The updated rules do not apply to Title XVI overpayments, such as those involving Supplemental Security Income (SSI) recipients, who still face the 10 percent withholding rate. The revised policy also excludes cases involving fraud or similar fault, which follow different recovery procedures.

With its latest decision to cut the withholding rate in half, the SSA appears to be seeking a middle ground between fiscal responsibility and potential beneficiary hardship.

SSA’s overpayment recovery practices have come under increasing scrutiny from lawmakers and watchdogs in recent years, particularly for the stress they impose on beneficiaries who may have had little or no role in the errors.

The SSA says it has launched an internal review and is working to expand data-sharing with payroll systems to help reduce payment errors.