The Social Security Administration (SSA) recently lowered the default withholding rate for recovering Social Security benefit overpayments from 100 percent to 50 percent. This follows a brief period where the rate was increased to 100 percent, drawing criticism for potentially harming low-income beneficiaries.
The latest change in policy aims to balance fiscal responsibility with the potential hardship faced by beneficiaries. The SSA previously lowered the rate to 10 percent in March 2024, citing concerns about financial hardship, before reversing this decision in March 2025 to 100 percent, citing fiscal responsibility and estimated savings.
The 50 percent rate applies to Title II overpayments (retirement and disability insurance), while Title XVI overpayments (Supplemental Security Income) remain at 10 percent.
Lawmakers and advocates criticized the previous 100 percent withholding rate, highlighting the potential for financial hardship among beneficiaries reliant on Social Security. The Government Accountability Office (GAO) also noted concerns about overpayments, particularly for disability beneficiaries returning to work.
The SSA is conducting an internal review and working on expanding data sharing with payroll systems to minimize future payment errors. The agency disbursed about $1.4 trillion in benefits in fiscal year 2023, with roughly $3.3 billion representing overpayments.
The lower withholding rate follows a brief return to 100 percent withholding introduced weeks earlier.
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.
If you often open multiple tabs and struggle to keep track of them, Tabs Reminder is the solution you need. Tabs Reminder lets you set reminders for tabs so you can close them and get notified about them later. Never lose track of important tabs again with Tabs Reminder!
Try our Chrome extension today!
Share this article with your
friends and colleagues.
Earn points from views and
referrals who sign up.
Learn more