Lawmakers have criticized the 100 percent withholding policy as being a burden to vulnerable Americans dependent on their benefits.
The Social Security Administration (SSA) announced a new measure on Friday, slashing the amount that social security beneficiaries must pay to the agency from their monthly benefits to repay overpayments.
“When a person has been overpaid, the law requires the agency to seek repayment, which can create financial difficulties for beneficiaries,” the SSA said in a March 29 blog post. Earlier, if the agency overpaid a beneficiary, it would withhold 100 percent of their monthly benefits until the overpaid amount was recovered. But beginning March 25, “the agency will collect ten percent (or $10, whichever is greater) of the total monthly Social Security benefit to recover an overpayment, rather than collecting 100 percent as was previous procedure. There will be limited exceptions to this change, such as when an overpayment resulted from fraud.”
There will be a transition period during which beneficiaries will continue with the older policy. Those who are placed in the 100 percent withholding category can contact Social Security’s National 800 Number at 1-800-772-1213.
The change only applies to new overpayments. If social security beneficiaries already have an overpayment with a withholding rate greater than 10 percent and want a lower recovery rate, SSA advised them to contact the agency. Alternatively, they can get in touch with their local Social Security office.
“If a beneficiary requests a rate lower than ten percent, a representative will approve the request if it allows recovery of the overpayment within 60 months—a recent increase to improve how the agency serves its customers from the previous policy of only 36 months,” SSA said.
“If the beneficiary’s proposed rate would extend recovery of the overpayment beyond 60 months, the Social Security representative will gather income, resource, and expense information from the beneficiary to make a determination.”
The SSA noted that beneficiaries have the right to appeal the agency’s overpayment decision or the amount. In case beneficiaries are not in a financial position to pay it back, they can ask the SSA to waive the collection of the overpaid amount. While the appeal or waiver is pending, the agency will not pursue recoveries.
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