‘Chaotic and confusing’: How the latest ‘emergency message’ from Social Security will impact beneficiaries who were overpaid — plus what you can do to protect yourself from future shocks

How the new rules hurt the most vulnerable

The SSA won't withhold benefits without warning. In its emergency message, it explained that recipients are sent a notice requesting repayment of the overpaid benefits. That notice also explains the right to appeal.

Beneficiaries have 90 days to request a lower withholding rate or ask the agency to reconsider. After that window closes, the SSA can withhold 50% of benefits until the overpayment is recovered. These notices began going out on April 25.

Kate Lang, director of federal income security at the advocacy group Justice in Aging, welcomed the shift from 100% withholding, but said she was disappointed the agency didn’t revert to 10%. Lang called the agency’s conduct “chaotic and confusing.”

“It creates more work for SSA — more people calling with questions, more errors being made that need to be corrected, more confusion and uncertainty about what is going on,” Lang said.

According to KFF Health News, the SSA has been actively trying to claw back overpayments from disability benefit recipients for years.

In fiscal year 2022 alone, the SSA recovered $4.7 billion in overpayments. It's estimated that many of those affected were people on disability benefits who couldn't afford to pay.

KFF Health News and Cox Media Group reported on individuals harmed by the SSA's aggressive tactics. One 64-year-old Florida resident was forced to live in a tent after his Social Security benefits were garnished and he could no longer afford rent.

“Social Security overpayments are wreaking havoc in people’s lives,” Jen Burdick, an attorney with Community Legal Services of Philadelphia, told KFF Health News. "They are asking the poorest among us to account for every dollar they get.”

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The impact of withheld Social Security checks

In April, the average monthly benefit was about $2,000 for a retired worker and $1,582 for a disabled worker.

Many people who receive Social Security rely on those benefits for nearly all their income. Among recipients age 65 and older, 12% of men and 15% of women get 90% or more of their income from Social Security, according to the SSA.

When those benefits are suddenly reduced due to overpayment recovery, it can lead to extreme financial hardship.

Some may have to rely on credit cards to cover essentials. But with interest rates still elevated, that could lead to a vicious cycle of debt. Even when rates aren’t high, relying on credit is risky.

For others, a loss of even part of their Social Security check could mean missing rent and facing eviction. Homeowners could risk foreclosure. And some might not be able to afford basics like utilities, food or medication.

How to avoid future financial shocks

Having your Social Security benefits reduced because of an overpayment on the program's part can be a devastating financial blow. Even if you haven't received an overpayment notice yet, that doesn't mean one isn't coming.

Right now, the SSA is limiting its withholding rate to 50%, but that could change. If you depend heavily on Social Security, it’s wise to take steps to protect yourself.

One option is to try building an emergency fund. That’s not easy if you’re already retired, but if you’re physically able, consider a part-time job to boost your income.

According to Pew Research, 19% of Americans ages 65 and over are working. If a set schedule doesn’t appeal to you, the gig economy may offer more flexible options. You can also look for ways to cut back on spending and save more. If you already live on a tight budget, this won’t be easy, but temporary sacrifices — like moving in with a grown child to avoid rent — could help.

It's also important to maintain good records of everything Social Security pays you. Keep all SSA documents in a safe place, and consider scanning them for digital backups.

If you get an overpayment notice you believe is incorrect, don’t hesitate to appeal it. The SSA could have made a mistake.

Before you panic, try calling the agency to speak with someone, or make an appointment at your local office to sort things out in person.