WEBVTT 00:00:00.000 --> 00:00:02.000 Welcome to another deep dive from empowering 00:00:02.000 --> 00:00:05.240 your finance on Social Security. Today's topic 00:00:05.240 --> 00:00:07.580 is a pretty significant recent change in the 00:00:07.580 --> 00:00:09.880 Social Security overpayment rate. It's returned 00:00:09.880 --> 00:00:12.980 back down to 50 % after a brief and frankly quite 00:00:12.980 --> 00:00:16.899 startling jump to 100%. This took effect April 00:00:16.899 --> 00:00:21.300 25, 2025. Now a policy shift like this, it might 00:00:21.300 --> 00:00:23.370 sound technical, right? But when we're talking 00:00:23.370 --> 00:00:24.949 about your social security check, it can have 00:00:24.949 --> 00:00:27.690 a huge impact. So what does this rate change 00:00:27.690 --> 00:00:31.890 really mean if you receive benefits? And what 00:00:31.890 --> 00:00:33.869 do the sources tell us about why this happened 00:00:33.869 --> 00:00:35.710 and what you really need to know? That's our 00:00:35.710 --> 00:00:38.229 mission today to unpack these details and we'll 00:00:38.229 --> 00:00:40.460 understand the real world implications. Absolutely. 00:00:40.659 --> 00:00:42.359 And what's truly fascinating here isn't just 00:00:42.359 --> 00:00:45.119 the 50 % figure itself, but the sheer speed, 00:00:45.280 --> 00:00:47.259 you know, the speed with which these policies 00:00:47.259 --> 00:00:49.439 have shifted in just the last few months and 00:00:49.439 --> 00:00:51.799 what that churning means for beneficiaries. So, 00:00:51.979 --> 00:00:53.659 yeah, we'll look at the context, the potential 00:00:53.659 --> 00:00:55.560 impact, and maybe most importantly, what options 00:00:55.560 --> 00:00:57.399 are available if you find yourself facing one 00:00:57.399 --> 00:00:59.439 of these overpayment notices. Let's start with 00:00:59.439 --> 00:01:01.719 the basics, though. What exactly is an overpayment? 00:01:01.799 --> 00:01:04.349 Good place to start. Simply put, it's when Social 00:01:04.349 --> 00:01:06.769 Security sends you more money in your monthly 00:01:06.769 --> 00:01:10.390 benefit check than you were legally owed. Right. 00:01:10.709 --> 00:01:12.790 And the sources point out this isn't always because 00:01:12.790 --> 00:01:15.310 of something the beneficiary did or maybe forgot 00:01:15.310 --> 00:01:18.250 to report. Well, sure, changes in circumstances 00:01:18.250 --> 00:01:20.469 are a common reason. The sources really highlight 00:01:20.469 --> 00:01:22.629 that sometimes it's the agency's own systems 00:01:22.629 --> 00:01:25.590 or processes that are at fault. Actually, one 00:01:25.590 --> 00:01:28.469 source specifically noted that inadequate automated 00:01:28.469 --> 00:01:31.329 systems or even just manual tools within Social 00:01:31.329 --> 00:01:33.969 Security were responsible for something like 00:01:33.969 --> 00:01:39.209 73 ,000 overpayments just in 2022 alone. 73 ,000. 00:01:39.209 --> 00:01:41.870 That statistic about agency errors. Well, it's 00:01:41.870 --> 00:01:44.189 really striking, isn't it? It is. It immediately 00:01:44.189 --> 00:01:47.849 makes you question the fairness of really aggressive 00:01:47.849 --> 00:01:50.290 recovery policies when the agency itself might 00:01:50.290 --> 00:01:52.450 be the cause. And it's also important to understand 00:01:52.450 --> 00:01:54.879 Social Security isn't just one thing. It includes 00:01:54.879 --> 00:01:57.959 different programs. The overpayment policy changes 00:01:57.959 --> 00:02:00.620 we're diving into today, they primarily affect 00:02:00.620 --> 00:02:02.939 what are called Title II benefits. Okay, Title 00:02:02.939 --> 00:02:05.040 II. Yeah, so that covers retirement, survivors, 00:02:05.280 --> 00:02:07.879 and disability insurance, often known as SSDI. 00:02:07.959 --> 00:02:10.800 Got it. Supplemental security income, or SSI, 00:02:11.139 --> 00:02:13.580 that has a different overpayment withholding 00:02:13.580 --> 00:02:17.080 rate. It's been 10 % and it has remained a 10%. 00:02:17.080 --> 00:02:19.500 It isn't impacted by these recent shifts we're 00:02:19.500 --> 00:02:21.219 talking about. Okay, that's a key distinction. 00:02:21.840 --> 00:02:25.560 So SSI is steady at 10%. Now, let's talk about 00:02:25.560 --> 00:02:28.400 this recent history because, wow, it really has 00:02:28.400 --> 00:02:30.740 been a whirlwind trying to keep up with these 00:02:30.740 --> 00:02:32.740 changes, hasn't it? According to the sources, 00:02:32.759 --> 00:02:35.300 anyway. It certainly has. A dramatic few months, 00:02:35.300 --> 00:02:37.560 really. For a while there under the previous 00:02:37.560 --> 00:02:39.800 administration, the default rate for recovering 00:02:39.800 --> 00:02:42.159 these overpayments, it was capped at 10 % of 00:02:42.159 --> 00:02:44.259 the monthly check. Or $10, right, whichever was 00:02:44.259 --> 00:02:46.400 more. Whichever was greater, exactly. And that 00:02:46.400 --> 00:02:48.659 was a policy specifically designed to protect 00:02:48.659 --> 00:02:51.500 beneficiaries from severe financial hardship. 00:02:51.740 --> 00:02:54.639 Right. like it happened almost overnight, that 00:02:54.639 --> 00:02:57.360 policy changed dramatically. One source notes 00:02:57.360 --> 00:03:00.500 that effective March 27th, just this year, 2025, 00:03:01.259 --> 00:03:03.819 the default overpayment withholding rate snapped 00:03:03.819 --> 00:03:08.020 right back up to 100%. 100%. For any new overpayment 00:03:08.020 --> 00:03:10.400 notices issued after that date. Yeah, and we 00:03:10.400 --> 00:03:13.060 saw Acting Commissioner Lee Dudek quoted on this. 00:03:13.379 --> 00:03:16.000 She explained the change was intended to, quote, 00:03:16.939 --> 00:03:20.479 properly safeguard taxpayer funds. The idea was 00:03:20.479 --> 00:03:23.319 to restore a policy from much earlier administrations. 00:03:23.379 --> 00:03:25.539 And it was projected to save something like $7 00:03:25.539 --> 00:03:29.020 billion over a decade. So the focus there was 00:03:29.020 --> 00:03:31.199 pretty clearly on fiscal responsibility from 00:03:31.199 --> 00:03:33.120 the agency's perspective. OK, but here's where 00:03:33.120 --> 00:03:35.340 it gets really interesting. And it just shows 00:03:35.340 --> 00:03:37.599 how fast things were moving. Yeah. Just weeks 00:03:37.599 --> 00:03:40.770 after that 100 % rate was announced. Another 00:03:40.770 --> 00:03:43.530 reversal. Another one. Yeah. According to an 00:03:43.530 --> 00:03:45.569 emergency message from the SSA that the sources 00:03:45.569 --> 00:03:48.189 reference, the default withholding rate for those 00:03:48.189 --> 00:03:50.830 Title II overpayments was cut back down again. 00:03:51.039 --> 00:03:53.919 This time to 50 percent. Yes. And this latest 00:03:53.919 --> 00:03:56.599 shift took effect very, very recently, April 00:03:56.599 --> 00:04:00.659 25th, 2025. And critically, it applies specifically 00:04:00.659 --> 00:04:04.180 to new overpayment notices sent on or after that 00:04:04.180 --> 00:04:06.139 date. As one expert quoted in the materials, 00:04:06.240 --> 00:04:08.520 put it kind of summing up this rapid policy turn. 00:04:08.539 --> 00:04:10.659 They said, in the last 100 days, we've gone from 00:04:10.659 --> 00:04:13.539 as low as 10 percent to 100 and now to 50. Wow. 00:04:13.740 --> 00:04:15.659 That rapid change really underscores the tension 00:04:15.659 --> 00:04:18.100 surrounding this whole issue. Absolutely. So, 00:04:18.100 --> 00:04:21.379 OK, let's nail this down. The bottom line. for 00:04:21.379 --> 00:04:24.319 anyone receiving retirement, survivors, or disability 00:04:24.319 --> 00:04:27.959 benefits. Title II, who gets a new overpayment 00:04:27.959 --> 00:04:31.439 notice dated April 25th or later. The default 00:04:31.439 --> 00:04:33.620 recovery rate, the amount they'll take back each 00:04:33.620 --> 00:04:36.399 month, is 50%. Is that right? That's exactly 00:04:36.399 --> 00:04:38.899 right. So what happens is the agency identifies 00:04:38.899 --> 00:04:41.540 an overpayment. They send you a notice first, 00:04:41.540 --> 00:04:43.699 asking for the full amount back immediately. 00:04:43.699 --> 00:04:46.279 OK. Now, if you don't take any action within 00:04:46.279 --> 00:04:49.339 90 days of getting that notice, and taking action 00:04:49.339 --> 00:04:52.139 means contacting the SSA to ask for a lower rate 00:04:52.139 --> 00:04:54.439 or appeal the overpayment itself or ask for a 00:04:54.439 --> 00:04:57.160 waiver, if you don't do any of that within 90 00:04:57.160 --> 00:04:59.860 days, then they will automatically start withholding 00:04:59.860 --> 00:05:02.220 up to 50 % of your monthly benefit check. And 00:05:02.220 --> 00:05:03.980 they'll keep doing that until the overpaid amount 00:05:03.980 --> 00:05:06.579 is fully recovered. And just to reiterate, because 00:05:06.579 --> 00:05:08.060 it's important the sources make it clear, the 00:05:08.060 --> 00:05:11.459 10 % withholding rate for SSI benefits, that 00:05:11.459 --> 00:05:13.500 wasn't part of this recent back and forth. It 00:05:13.500 --> 00:05:17.019 remains unchanged. Correct. Steady at 10 % for 00:05:17.019 --> 00:05:20.860 SSI. So this brings us to a really critical question, 00:05:20.980 --> 00:05:23.259 doesn't it? This dramatic policy swing landing 00:05:23.259 --> 00:05:26.319 at 50%. I mean, while 50 % is obviously less 00:05:26.319 --> 00:05:28.560 severe than taking 100%. Right. It's better than 00:05:28.560 --> 00:05:31.439 nothing. It is. But what is the actual impact 00:05:31.439 --> 00:05:34.689 on someone who suddenly loses half of their social 00:05:34.689 --> 00:05:36.949 security check. Yeah, and this is where the sources 00:05:36.949 --> 00:05:40.240 get. frankly deeply concerning. Experts quoted 00:05:40.240 --> 00:05:43.199 highlight that even a 50 % reduction can be incredibly 00:05:43.199 --> 00:05:46.639 difficult, devastating even for beneficiaries. 00:05:47.300 --> 00:05:49.459 Kate Lang from Justice and Aging is quoted saying 00:05:49.459 --> 00:05:51.740 that while yes, it's better not to lose all of 00:05:51.740 --> 00:05:54.600 your income, losing half is still quote, going 00:05:54.600 --> 00:05:57.019 to be devastating and can still result in people 00:05:57.019 --> 00:05:59.360 becoming homeless. Homeless, wow. Especially 00:05:59.360 --> 00:06:01.100 if they rely on these benefits, you know, to 00:06:01.100 --> 00:06:03.379 cover fundamental costs like rent or their mortgage 00:06:03.379 --> 00:06:06.480 or food. Basic necessities. And Richard Fiesta 00:06:06.480 --> 00:06:08.980 from the Alliance for Retired Americans, he echoed 00:06:08.980 --> 00:06:11.360 that concern. He stated that losing 50 percent 00:06:11.360 --> 00:06:13.259 could put them into immediate economic hardship. 00:06:13.740 --> 00:06:15.339 He also brought up that crucial point we touched 00:06:15.339 --> 00:06:17.319 on earlier that often these overpayments weren't 00:06:17.319 --> 00:06:19.240 even the beneficiary's fault in the first place. 00:06:19.240 --> 00:06:21.660 Exactly. They're facing severe hardship because 00:06:21.660 --> 00:06:25.220 of, say, agency errors or maybe processing delays. 00:06:25.540 --> 00:06:27.879 That seems inherently unfair to a lot of people. 00:06:27.939 --> 00:06:30.470 It really does. When you look at the numbers, 00:06:30.709 --> 00:06:33.350 how much people actually rely on Social Security, 00:06:34.129 --> 00:06:37.110 the potential severity of this 50 % rate becomes 00:06:37.110 --> 00:06:39.970 even clearer. One source points out that about 00:06:39.970 --> 00:06:42.730 a third, one third of recipients depend on their 00:06:42.730 --> 00:06:46.310 monthly check for at least 75 % of their total 00:06:46.310 --> 00:06:50.540 income. 75%. Yeah. And for those on SSDI, disability 00:06:50.540 --> 00:06:53.899 who, as noted, would sometimes face these overpayments 00:06:53.899 --> 00:06:56.220 due to really complex rules around reporting 00:06:56.220 --> 00:06:59.180 work income. But a fifth of them rely on benefits 00:06:59.180 --> 00:07:02.060 for almost all of their income. Almost all. So 00:07:02.060 --> 00:07:04.060 if you are in that position, or maybe you know 00:07:04.060 --> 00:07:06.439 someone who is, losing half of that absolutely 00:07:06.439 --> 00:07:09.100 essential income, well, it's far from a minor 00:07:09.100 --> 00:07:11.540 inconvenience, potentially a significant financial 00:07:11.540 --> 00:07:13.379 crisis. OK. But there is some potential good 00:07:13.379 --> 00:07:15.689 news here. The important takeaway is that if 00:07:15.689 --> 00:07:18.189 you do receive an overpayment notice, you're 00:07:18.189 --> 00:07:20.410 not completely without options, according to 00:07:20.410 --> 00:07:23.310 the sources. Absolutely not. The critical thing, 00:07:23.649 --> 00:07:25.870 the absolute most important thing, is to act. 00:07:26.189 --> 00:07:28.870 Act within that 90 -day window after you get 00:07:28.870 --> 00:07:32.009 the notice. 90 days, okay. Yes. You need to contact 00:07:32.009 --> 00:07:34.370 the SSA. You can do that for a few key reasons. 00:07:34.709 --> 00:07:37.029 First, you can request a lower recovery rate 00:07:37.029 --> 00:07:40.740 than that default 50%. especially if losing half 00:07:40.740 --> 00:07:42.939 your income would cause you significant financial 00:07:42.939 --> 00:07:46.579 hardship, you can negotiate. Second, you can 00:07:46.579 --> 00:07:49.199 appeal the decision itself. If you believe Social 00:07:49.199 --> 00:07:51.639 Security is actually incorrect and you weren't 00:07:51.639 --> 00:07:54.120 really overpaid, or maybe if the overpayment 00:07:54.120 --> 00:07:56.279 wasn't your fault. Right, challenge the finding. 00:07:56.620 --> 00:07:59.680 Exactly. And third, you can request a waiver 00:07:59.680 --> 00:08:02.519 of repayment. This is basically asking the SSA 00:08:02.519 --> 00:08:04.800 to forgive the debt entirely because repaying 00:08:04.800 --> 00:08:07.420 it would cause you financial hardship. And the 00:08:07.420 --> 00:08:09.819 sources do clarify that the SSA will generally 00:08:09.819 --> 00:08:12.439 stop collecting payments while an appeal or a 00:08:12.439 --> 00:08:14.699 waiver request is being reviewed, so that buys 00:08:14.699 --> 00:08:16.579 you some time. That's good to know they pause 00:08:16.579 --> 00:08:19.579 collection. However, one challenge the sources 00:08:19.579 --> 00:08:22.500 highlight is that actually navigating these options, 00:08:22.500 --> 00:08:25.199 it can be difficult. Yeah, that's true. They 00:08:25.199 --> 00:08:27.600 mentioned there can be, quote, a lot of discretion 00:08:27.600 --> 00:08:31.139 among individual SSA employees when they're evaluating 00:08:31.139 --> 00:08:33.659 repayment terms or looking at waiver requests. 00:08:34.679 --> 00:08:36.980 Which could lead to inconsistent outcomes, right? 00:08:37.279 --> 00:08:39.399 Depending on who you talk to. Exactly. Plus, 00:08:39.659 --> 00:08:41.399 just the practical side, getting through to the 00:08:41.399 --> 00:08:43.679 SSA on the phone or getting an appointment at 00:08:43.679 --> 00:08:45.980 a local office within that 90 -day deadline, 00:08:46.340 --> 00:08:48.539 that could be a huge hurdle for many people. 00:08:48.659 --> 00:08:51.269 Definitely a barrier. OK. So let's try and bring 00:08:51.269 --> 00:08:53.309 this all together, wrap it up based on what we've 00:08:53.309 --> 00:08:55.690 seen in the sources today. Social Security's 00:08:55.690 --> 00:08:58.210 default overpayment withholding rate for Title 00:08:58.210 --> 00:09:01.070 2 benefits. That's retirement, survivors and 00:09:01.070 --> 00:09:03.429 disability. It went on this really quick journey 00:09:03.429 --> 00:09:06.169 from a 10 percent cap up to 100 percent. And 00:09:06.169 --> 00:09:08.190 now it's back down to 50 percent. And that 50 00:09:08.190 --> 00:09:11.149 percent rate is effective as of April 25, 2025, 00:09:11.149 --> 00:09:14.149 but only for new notices. Right. And while that 00:09:14.149 --> 00:09:16.070 return to 50 percent is certainly a step back 00:09:16.070 --> 00:09:19.320 from the the immediate and total cut of 100%. 00:09:19.320 --> 00:09:22.480 Which was pretty drastic. Very. It still represents 00:09:22.480 --> 00:09:25.000 a major financial challenge for many beneficiaries, 00:09:25.259 --> 00:09:27.519 especially those who rely so heavily on their 00:09:27.519 --> 00:09:30.240 checks. And the sources really underscore that 00:09:30.240 --> 00:09:32.779 agency errors do play a role in creating these 00:09:32.779 --> 00:09:35.340 overpayments sometimes. And the experts quoted 00:09:35.340 --> 00:09:38.039 are very clear about the potentially devastating 00:09:38.039 --> 00:09:40.860 human cost of losing half of one's income. But 00:09:40.860 --> 00:09:43.600 it's crucial to remember the sources provide 00:09:43.600 --> 00:09:46.120 a path forward. If you get a notice, you have 00:09:46.120 --> 00:09:49.320 to act within 90 days, request a lower rate, 00:09:49.919 --> 00:09:52.919 appeal the decision, or seek a waiver. Knowing 00:09:52.919 --> 00:09:56.340 these options exist is absolutely crucial. Definitely. 00:09:56.860 --> 00:09:58.820 And thinking about these rapid policy shifts, 00:09:58.820 --> 00:10:01.759 you know, from 10 to 100 down to 50 and considering 00:10:01.759 --> 00:10:04.549 the impact on beneficiaries. Here's maybe something 00:10:04.549 --> 00:10:06.889 provocative to consider based on everything we've 00:10:06.889 --> 00:10:09.250 discussed. How should the system, how should 00:10:09.250 --> 00:10:12.429 Social Security best balance that goal of safeguarding 00:10:12.429 --> 00:10:15.450 taxpayer funds with the very real responsibility 00:10:15.450 --> 00:10:17.950 to protect vulnerable individuals, especially 00:10:17.950 --> 00:10:20.149 when, as we've seen, the overpayments might actually 00:10:20.149 --> 00:10:22.230 originate from the agency itself? That's a tough 00:10:22.230 --> 00:10:24.629 balance. It's a really complex tension, and it's 00:10:24.629 --> 00:10:26.590 highlighted by, well, everything we've just talked 00:10:26.590 --> 00:10:29.830 about. Indeed. Well, we certainly hope this deep 00:10:29.830 --> 00:10:31.769 dive has helped illuminate these recent changes 00:10:31.769 --> 00:10:34.879 to Social Security overpayment. recovery. Navigating 00:10:34.879 --> 00:10:37.620 personal finance, especially complex topics like 00:10:37.620 --> 00:10:40.200 this one, is absolutely crucial for your financial 00:10:40.200 --> 00:10:42.860 well -being. For more information, resources, 00:10:43.080 --> 00:10:45.179 strategies and tools designed to empower your 00:10:45.179 --> 00:10:47.820 financial journey, please visit Empowering Your 00:10:47.820 --> 00:10:50.419 Finance. You'll find articles, newsletters and 00:10:50.419 --> 00:10:53.039 expert tips there to help you stay informed and 00:10:53.039 --> 00:10:56.159 make confident financial decisions. That's Empowering 00:10:56.159 --> 00:10:56.779 Your Finance.