A prominent senior citizens group has proposed that Social Security recipients receive nearly $500 in payments using funds from repaid overpayments.
The Social Security Administration (SSA) pays out billions of dollars in monthly benefits to nearly 70 million recipients.
Social Security payments provide a critical source of income for retirees, survivors, and Americans with disabilities.
According to The Senior Citizens League’s (TSCL) analysis, if the federal government recovered its usual amount of overpaid benefits in a typical year, it could pay seniors a one-time payment of $495.
TSCL believes that this proposed payment could help compensate for a lower-than-expected Cost of Living Adjustment (COLA) in 2026.
The COLA increase is expected to be 2.2%, though the official announcement will not come until October.
TSCL said: “This would be a strong tool to make up for a lower COLA than seniors are hoping for.”
EFFECTS OF THE CHANGE
In recent years, the Social Security Administration has faced criticism for how it handles overpayments.
Some seniors who were unknowingly overpaid are required to repay the entire amount within 30 days.
If they are unable to repay the full amount, they risk having their future benefits withheld until the debt is paid.
According to a Congressional Research Service report, the Social Security Administration overpaid by $6.5 billion in the fiscal year 2022.
Under the Biden administration, the SSA implemented a policy that limited repayment deductions to 10% of a person’s monthly benefit in order to reduce financial hardship for recipients.
However, the Trump administration has recently reversed this.
According to a new policy announced last week, the SSA will reinstate a 100% repayment requirement for all overpayments made after March 27.
It excludes Supplemental Security Income (SSI) benefits.
MIXED REACTIONS
Shannon Benton, TSCL’s Executive Director, criticized the change as unfair.
“The clawback of payments is especially unfair to seniors who do not have external support to help manage their finances and track their benefits,” Benton wrote in a news release.
“Many beneficiaries may not be aware of an overpayment and could suddenly find themselves without a check.”
Meanwhile, acting Social Security Commissioner Lee Dudek defended the decision, citing the agency’s responsibility to protect public funds.
“We have the significant responsibility to be good stewards of the trust funds for the American people,” Dudek told reporters.
“It is our duty to revise the overpayment repayment policy back to full withholding, as it was during the Obama administration and first Trump administration, to properly safeguard taxpayer funds.”
In a statement issued on March 7, the Social Security Administration projected that reinstating full repayment requirements could result in an estimated $7 billion in recovered overpayments over the next decade.
