SSA is Withholding 50% of Checks ― One Group will be Seriously Impacted as of June

The Social Security Administration (SSA) has recently announced a controversial change: beginning next month, beneficiaries who were overpaid Social Security benefits will start seeing clawbacks in their monthly payments. While originally set at a 100% withholding rate, intense backlash has pushed the SSA to reduce the rate—but the policy still threatens the financial stability of many retirees, people with disabilities, and low-income beneficiaries who depend on these payments to survive.

Let’s break down why the SSA is reclaiming funds, how the withholding rates have changed, and what affected recipients can expect moving forward.

Why the SSA Is Reclaiming Overpayments

The SSA is legally required to reclaim funds that were overpaid to beneficiaries. These overpayments can result from:

• Outdated income information affecting eligibility or payment levels
• System calculation errors due to outdated technology
• Lack of automation tools, which make it difficult for SSA staff to accurately process benefits

According to a 2022 report by the SSA’s Office of the Inspector General, more than 73,000 overpayments were caused by agency errors—not by the beneficiaries themselves. Still, the SSA is pursuing full recovery of these funds, regardless of fault.

SSA Reduces Clawback Rate After Backlash

Earlier this year, Acting SSA Commissioner Lee Dudek, in partnership with the Department of Government Efficiency (DOGE), reinstated a 100% benefit withholding rate—meaning affected beneficiaries would receive no payment at all until their overpayment debt was fully recovered.

The public response was swift and critical. Advocates pointed out that many recipients were being penalized for SSA’s own mistakes, with no warning and no means to absorb the sudden loss of income.

As a result, the SSA reversed course in April 2025, and announced revised withholding rates:

Beneficiary Type	New Withholding Rate
Social Security (Retirement/Disability)	50% of monthly benefit
Supplemental Security Income (SSI)	10% of monthly benefit

This rollback brings the rate closer to previous norms. Under the Biden administration, the standard rate was 10% or $10, whichever was greater.

What Happens If You Receive an Overpayment Notice?

If you receive a Social Security overpayment notice next month, here’s what you need to know:

• You’ll be required to repay the full amount unless you take action.
• You will have 90 days from the notice date to:
  • Repay the full amount, OR
  • Request a lower withholding rate based on financial hardship
• If no action is taken within 90 days, the SSA will begin automatically withholding 50% of your monthly benefit until the overpayment is recovered.

For SSI recipients, the automatic deduction will be 10% if no action is taken.

A New Phase in Government Efficiency—or Burden?

The updated clawback policies are part of a larger federal initiative driven by the Trump administration and DOGE to recoup an estimated $700 million annually in overpayments. DOGE’s goal is to cut $2 trillion in federal spending by the end of its contract in July 2026.

However, experts and advocacy groups remain concerned about the burden placed on vulnerable populations.

“In the last 100 days, we’ve gone from as low as 10% to 100 and now to 50,”
said Richard Fiesta, Executive Director of the Alliance for Retired Americans.

He and others argue that the SSA is prioritizing fiscal discipline at the cost of financial security for the elderly and disabled—especially when many overpayments stem from administrative failures, not recipient misconduct.

Next month marks a major shift in how the SSA handles overpayment recoveries. If you’re a beneficiary who receives a notice, take action quickly to either repay, appeal, or request a lower deduction. Left unaddressed, the policy could significantly reduce your income—right when you need it most.

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