A portion of Social Security recipients in the U.S. will experience changes in the amount of their August 2025 payments, due to a new policy implemented by the Social Security Administration (SSA) aimed at recovering overpayments.
This shift directly affects individuals who were previously overpaid, meaning they received more benefits than they were entitled to.
What is an Overpayment and How Does It Happen?
An overpayment occurs when a beneficiary receives more money than they should. This can happen due to various factors, such as a failure to report changes in income or errors made by the SSA’s own systems during benefit calculations.
Between 2015 and 2022, the SSA issued nearly $72 billion in improper payments, with the majority being overpayments. As of September 2023, there is still $23 billion in uncollected overpayments.
New Overpayment Recovery System
The SSA’s updated policy authorizes the agency to withhold up to 50% of an individual’s monthly benefit until the entire overpaid amount is returned. This is a significant increase from previous rules, where the maximum withholding was limited to 10% of the benefit.
This change came after a proposal to withhold 100% of benefits, which sparked concerns about its potential impact on beneficiaries.
First Payments Affected by the New System
The SSA began notifying affected individuals starting April 25, 2025, providing them with a 90-day period to appeal or review the overpayment notice before the automatic deductions began.
The first deductions began in late July 2025, impacting August 2025 payments. These checks will reflect the full 50% withholding as part of the new process.
How to Address Overpayment Issues
If a beneficiary believes the overpayment was made in error or if the deductions would cause financial hardship, they can request a waiver or appeal the amount or recovery rate.
The SSA allows various repayment methods, such as credit card, electronic transfer, or money order. However, during the appeal or exemption process, the SSA will suspend any collection actions.
Protecting Your Social Security Benefits
To avoid financial strain, it’s crucial for recipients to review their overpayment notices and consider their options, including appealing or requesting an adjustment of the repayment terms to suit their financial situation.
The SSA’s new policy ensures that beneficiaries are given time to address these situations before large deductions begin impacting their monthly payments.
