Social Security Slashes Overpaid Benefits by Up to 50% in July

Starting in July, up to 2 million Social Security recipients will see their payments reduced by as much as 50%.

The Social Security Administration (SSA) announced it will raise its recovery rate for overpaid or wrongly paid benefits from the current 10% to 50% beginning this month.

The SSA explained it has been reclaiming overpaid benefits from recipients of Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) whose eligibility status changed due to factors such as income, marriage, or disability status updates. Some overpayments also resulted from administrative errors.

The SSA stated, “We have limited recovery to 10% of monthly payments to protect recipients, but we are adjusting the rate to ensure federal fiscal soundness and fairness.”

This change is expected to affect around 2 million recipients, out of 69 million total beneficiaries. During President Donald Trump’s first term, the recovery rate rose to 100%, but it was reduced back to 10% at the start of President Joe Biden’s administration. Under Trump’s second administration, efforts to reinstate the 100% rate continued, but with concerns over budget burdens and public backlash, a 50% cap was introduced as a compromise.

Experts advise recipients to promptly report any changes in eligibility to the SSA and regularly check if they are receiving the correct amount. They also note that recipients who receive overpayment notices can apply for waivers or negotiate repayment plans to reduce deductions.

BY BRIAN CHOI [choi.inseong@koreadaily.com]