America’s in her major savings era. The latest pinch to her pennies? Social Security.
If you receive more in your check than you’re entitled to, Uncle Sam’s now looking at a new way to snatch it back ASAP.
Here’s Five Fast Facts on the new overpayment recovery rules:
- 💯 That Escalated Quickly - Starting on March 27, 2025, the Social Security Administration will withhold 100% of benefits from those they discover have been overpaid. This is a *pretty big* leap from the old withholding rate of 10%. Why the alarming jump? The SSA has a lofty goal of recovering (gasp) $7 billion over the next ten years.
- 👴🏻 Grandfathered In - The start date of 3/27 only applies to overpayments discovered AFTER that date. If you’re already dealing with overpayment recovery, it’ll continue at the old rate of 10%. Anyone with Supplemental Security Income (SSI) will also stay at the 10% rate.
- 💸 A Little Too Much - So how big of a deal are these overpayments? Less than 1% of Social Security recipients are overpaid, which doesn’t seem like a lot. However, the SSA reported issuing a whopping $72 billion in overpayments between 2015 and 2022.
- 🙈 Money Mistakes - There’s a couple of common reasons why someone would receive an overpayment…and it’s mostly on the beneficiary side. Overpayments tend to happen the most to people who don’t report significant life changes that impact their benefits or their earnings. They also happen when SSA employees don’t update records, thanks to system issues or plain old human error.
- 🩺 Medicare About It - Because Medicare premiums get deducted straight from Social Security checks, critics of the new overpayment rules are worried AF. If your entire check gets snatched due to overpayment, your Medicare premiums may go unpaid, resulting in lost coverage. How exactly this problem will be handled is still unclear.
🔥Bottom line: If you or your loved ones receive Social Security payments, now’s a great time to do an audit. Don’t let this new rule take you by surprise! Should you open a joint bank account with your aging parents? In this article, we cover the pros and cons.
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