Beginning in July 2025, the Social Security Administration (SSA) will begin withholding 50% of certain recipients’ monthly benefits—not because of any projected funding shortfall, but as part of a longstanding effort to recover overpaid funds.
SSA’s New Recovery Policy
In an official update issued in March, the SSA announced that, starting March 27, 2025, benefits for individuals who received overpayments would be withheld until the full amount is recovered. In April, the agency clarified through an emergency bulletin that a default 50% deduction would apply to all overpayment notices issued on or after April 25, 2025.
“If the individual does not request a lower withholding rate, file for reconsideration, or request a waiver within about 90 days, we will recover the overpayment by withholding up to 50% of their monthly Title II benefits—provided there’s no fraud or similar fault,” the notice stated.
This means those who don’t respond within the 90-day window will start seeing their benefits reduced by half as early as July 24, 2025.
Why Is This Happening?
This policy is part of the SSA’s broader plan to recover billions in mistaken payments. According to an August 2024 report by the SSA Office of the Inspector General, nearly $72 billion in overpayments were made between fiscal years 2015 and 2022. As of September 2023, the agency had not yet recovered around $23 billion.
These overpayments often stem from administrative errors, delays in reporting income changes, or outdated eligibility information.
Can You Challenge or Delay the Deductions?
Yes. If you believe the overpayment was not your fault—or you cannot afford to repay it—SSA allows you to:
- Request a lower withholding rate
- Ask for reconsideration of the overpayment decision
- Apply for a waiver by filling out a form on the SSA’s website
Waiver approval depends on your current financial situation and whether SSA determines that the overpayment was due to your own actions.
Past Revisions and Public Pressure
This isn’t the first time SSA has modified its overpayment recovery approach. In response to public backlash and reports of people losing housing after benefits were cut off entirely, SSA had previously reduced the standard withholding rate from 100% to 10%. However, the latest rule signals a more aggressive recovery push.
What You Need to Know
- Start Date: Deductions begin around July 24, 2025
- Who’s Affected: Beneficiaries with overpayments identified after April 25, 2025
- Default Withholding Rate: 50% of monthly benefits
- Action Window: ~90 days after receiving an overpayment notice to appeal or request an adjustment
If you receive a notice, it’s critical to respond within the given timeframe to avoid losing half of your monthly benefits.
