MILLIONS of Americans will see their monthly Social Security payments slashed in half in just days as a new SSA regulation goes into effect.
However, another Social Security change means that certain beneficiaries will see their checks spike.
The SSA is implementing changes that will affect beneficiaries’ monthly payment amounts[/caption]
The Social Security switch-ups will either reduce a recipient’s benefits by 50% or increase their monthly check[/caption]
The SSA hands out monthly retirement, survivor, and disability benefits to over 73 million Americans each month.
Considering the sheer scale of the social program – with more than a fifth of the entire US population relying on the cash – the SSA is prone to making payment errors.
Overpayment occurs when an individual receives more Social Security money than they are legally owed, oftentimes due to administrative errors such as miscalculating payments or delayed reporting processing.
These overpayments, also the result of beneficiary errors, are a pricey problem for the SSA, with approximately $72 billion in benefits improperly distributed between 2015 and 2022.
As a result, the federal agency is cracking down on its recollection efforts, announcing via an emergency message that it would start sending out letters to Americans on April 25, 2025, who have been overpaid in the past.
From the date of the notices, the SSA would permit 90 days for individuals to request a waiver or a lower repayment rate.
After the grace period expires – July 24, at the earliest – the agency would start to withhold 50% of a beneficiary’s monthly checks until the overpayment was recouped.
More on the SSA’s overpayment switch-up
Americans who were overpaid retirement, survivor, family, or disability payments and notified on April 25, 2025, or later are subject to the new 50% withholding rate.
Overpayments before that date, however, will see money withheld at a rate of 10%, as will all Supplemental Security Income overpayments, regardless of when they took place.
The new 50% rate is a major U-turn from the SSA’s March announcement that 100% of a beneficiary’s monthly check would be withheld until their overpayment was fully collected.
Before the SSA took the entirety of an overpaid individual’s check, it withheld just 10%.
The federal agency had drastically dropped the recovery rate to 10% starting in spring of 2024 due to negative media coverage the previous year regarding the SSA’s collection process.
Individuals, often with disabilities and low incomes, reported receiving bills of four or even five figures to recover overpayments.
Occasionally the overpayments were years or even decades old.
Some beneficiaries who owed the SSA money faced evictions or foreclosures after their payments were slashed.
“Innocent people can be badly hurt,” said then-Social Security chief Martin O’Malley. “And these injustices shock our shared sense of equity and good conscience as Americans.”
The next round of regular Social Security payments are set to go out this Wednesday, July 23, while the following payment date falls on August 1, per the SSA payment calendar.
BENEFIT BOOST
While some Americans are slated to see their Social Security checks cut in half, others are seeing their benefits increase.
The benefit bumps are due to the Social Security Fairness Act that former President Joe Biden signed into law on January 5, 2025.
The act got rid of the Windfall Elimination Provision, or WEP, and Government Pension Offset, or GPO – two rules that reduced or eliminated benefits for Americans receiving a pension from work not covered by Social Security.
The SSA started to send retroactive Social Security Fairness Act payments in February to impacted individuals, especially public sector employees such as police officers, firefighters, postal workers, and public school teachers.
As of July 7, the SSA has processed over 3.1 million retroactive payments, totaling $17 billion, the agency announced.
The SSA revealed earlier this year that the average retroactive payment amount was $6,710.
WEP and GPO
The Windfall Elimination Provision and the Government Pension Offset are federal laws that have been in place for nearly 40 years.
Windfall Elimination Provision:
- Impacts pension recipients who also work another job covered by Social Security
- The Social Security benefit is usually reduced by around 50%, but it cannot be reduced to zero
Government Pension Offset:
- Impacts pension recipients who also qualify for spousal Social Security benefits
- Reduces two-thirds of the PSRS benefit, typically eliminating the entire spousal Social Security benefit
These beneficiaries will also see an increase to their ongoing monthly benefits, which the SSA said should have been adjusted by July 2025.
The agency noted that, because benefits are paid the month after they are due, Americans may see the change in their benefit amount in the August 2025 payment.
For Americans with pensions from work not covered by Social Security who filed new claims after January 5, 2025, the SSA “may still be working to process your application.”
Those who believe they qualify for Social Security Fairness Act benefit adjustments can file a claim on the SSA’s website.
Check out these other changes underway at the SSA.
Americans are being urged to take action before a huge Social Security change is rolled out in weeks – missing the deadline could block your cash.
Meanwhile, the SSA confirmed that a second “digital” change will hit Americans in mid-July – and it impacts your account.
