Social Security Overpayments: Here’s How Social Security Withholding Is Soaring

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Social Security began clawing back overpayments at a higher rate in July, and beneficiaries who have been overpaid will see a lot more money coming out of their monthly checks to cover the overpayments. While the number of recipients who have been overpaid is a small percentage of the total Social Security recipients, the change to the repayment rules means that hundreds of thousands of Americans will need to repay a potentially huge portion of their check each month.

Here’s how Social Security overpayments work and how things have changed under the second Trump administration.

Social Security overpayments: Here’s how much you’ll pay now

While recipients have always had to repay Social Security for any overpayments, they’ll now be doing so at a higher rate, thanks to changes in Social Security rules announced in early 2025. Starting in July 2025, those who have received overpayments may need to pay as much as 50 percent of their monthly benefit check to resolve the overpayment.

That 50 percent rate is actually a decrease from the original plan announced by Social Security in March, in which the administration said that it would withhold 100 percent of each check until the overpayment was resolved. Social Security walked back that plan to 50 percent in April. 

Previously, recipients would have 10 percent of their check withheld to resolve the overpayment, a rate that was put in place in March 2024, which reduced the long-time rate of 100 percent. The new rate applies to retirement benefits, survivors benefits, family benefits and disability benefits.

Any way you slice it, though, that’s a huge repayment for an average Social Security check of $1,860.64. Millions of Americans rely exclusively or almost exclusively on their monthly check.

Should you sweat the overpayment rules if you haven’t been notified of an overpayment? The new rules could affect about two-thirds of a million Americans. Social Security pays benefits to around 73 million each year, and it’s clawing back overpayments from less than 1 percent. Nearly 670,000 were subject to repayment as of October 2024, according to KFF Health News.

How does Social Security make an overpayment?

Normally, of course, Social Security owes its recipients money, but sometimes Social Security may overpay beneficiaries, and they end up owing the program for overpayments. How and why does Social Security make an overpayment? Only a tiny fraction of the time is it due to an error on the administration’s part, according to the Office of Inspector General. Some of the reasons include:

• Recipient’s unreported earnings
• Unreported other information affecting benefit, such as the end of a disability
• Unreported early retirement earnings (that is, before full retirement age)
• Unreported changes in living arrangements or support
• Undetermined reason
• Computational error

Most of the time, overpayments are due to recipients not reporting changes that affect their benefits. For example, those receiving disability benefits may have health or income changes that affect their payments and fail to report them. Similarly, those who file for early benefits and then earn too much from a job in retirement will need to have more of their check withheld. (Here’s the best time to claim Social Security benefits to help avoid some of these issues.)

In these cases, benefits should have been reduced previously when the life changes occurred — and they would have been — if the recipient had informed Social Security in a timely manner.

This issue won’t cause you to lose benefits, but here are five ways to lose your Social Security.

How to know if Social Security has overpaid you

Social Security will send you a letter in the mail explaining why you’ve been overpaid and how the administration has calculated the overpayment. The letter will detail the amount of the overpayment, how you can repay the overpayment, as well as how you can appeal the decision.

If you don’t think you’ve been overpaid or you think the amount is wrong, you can file an appeal with the Social Security Administration. You need to fill out Form SSA-561 Request for Reconsideration, and explain why you have not been overpaid or that the overpayment is wrong, as your case may be. You can file the form online or call Social Security to receive a paper copy. If you’ve received a statement that you’ve been overpaid, you have 60 days to file an appeal.

If you think you shouldn’t have to repay the money, you can file for a waiver of the overpayment. You need to file Form SSA-632 Request for Waiver of Overpayment Recovery, which is available online or by phone.

How can you repay Social Security?

You may be able to set up your repayment to Social Security in one of several ways, depending on your specific case.

In some cases, Social Security may also withhold money from your federal income tax return or from your wages, if you’re still working. Any future Social Security payments may also be subject to withholding as well. 

Bottom line

The changes to Social Security’s repayment policies will mean that some recipients will see 50 percent of their monthly check garnished to make up for their overpayment. While that’s a significant burden, it affects a tiny percentage of the 73 million Americans receiving benefits each month.