Because Donald Trump is now president for a second time, the Social Security Administration (SSA) is changing its rules to get back money it paid out by mistake. If they wrote you a letter, it would be like, “Hey, we think we gave you more money than we should have.” You need to pay it back.
The SSA has good reasons, but the way they do things is causing a lot of debate. The reasons can be anything from not reporting a change in your income to making mistakes in their calculations. Things still happen, but now the effects are worse.
What changed in Social Security’s overpayment clawbacks (and why you should be interested)
If the SSA mistakenly paid you too much, they would only take 10% out of each monthly check until March 2025 to make up the difference. Since March 27, though, things have changed. Now, they can stop all of your payments until you pay off the debt.
From 2017 to 2022, the SSA gave out more than $72 billion in the wrong way, mostly because they overpaid people. With numbers like these, it is not a surprise that the rules for getting back overpaid money have become a little stricter.
For instance, if you owe $2,000 and get $1,500 a month, they would hold on to your next full payment and you would still have to pay $500 back. This means that your next check will be for $1,000. That is not nice if you need that money to live.
But be careful—this only works for over payments that happen after that important date. If you were already paying more than you should have before March 27, the 10% discount per check stays in effect. There is one more exception: the discount stays at 10% if you get SSI (Supplemental Security Income). It is not clear why they did not change SSI, but it is helpful for some people.
How do you know if you are in the crosshairs of Social Security?
Starting at the end of March, the letters were sent. If you get one, do not throw it away with the pizza coupons and flyers. Open it quickly, because the SSA gives you 30 days to do something before they start to take money out of your account (plus 5 days for the mail).
There is nothing terrible about having to pay:
- Express option: If you have the money, you can return it with a credit card, online payment or check.
- Flexible option: If you can’t let go of everything at once, call 1-800-772-1213 or visit a local office. By law, they must offer you a payment plan adjusted to your situation. Of course: don’t wait for them to seize you; Act before the discounts start.
You have the right to battle the choice. Read the notice carefully and check it against your records. If something does not seem right, you should file an appeal. It is possible for even the best systems to go wrong sometimes.
