Starting this month, millions of seniors will see smaller social security checks
Time has reached about 2 million Americans, as their Social Security payments will be cut in half.
This has nothing to do with the imminent shortage in social security reserves. That's eight years.
The reduction in benefits payments starting this month is the funding that the Social Security Agency (SSA) has tried to overpay it to some Americans. Social Security will withhold 50% of the beneficiary's monthly checks until the sum of their overpayments is recovered.
SSA issues nearly $1.4 trillion to approximately 73 million Social Security and SSI recipients each year. Overpayments may occur when the beneficiary does not update the income change, or when the SSA mistakenly calculates a person's welfare.
The law requires the agency to try to withdraw or recover funds when overpayment.
“Overpayments should be recovered, but we are still concerned about the impact of any recovery rate on the more volatile retirees,” Shannon Benton, executive director of the Senior Citizen Union, told Yahoo Finance.
During the Biden administration, the default withholding rate dropped to 10% of the beneficiaries benefiting from 100% per month, greatly reducing financial difficulties for those who overpay.
However, in March, the Trump administration announced that the agency would once again reject 100% of individual Social Security checks until all overpayment funds are repaid. The tax rate dropped to 50% after the withdrawal of advocates and seniors in April, and the agency said it would begin searching for incorrect payments that began between 2015 and July 2022.
This remains a serious problem for many older people. “For some retirees, is this 1% or 100%,” Benton said. “Any amount of kickbacks can be disastrous.”
According to an Inspector General Report in August 2024, payments are incorrectly account for 1% of the total benefits paid for the period, but at the end of the fiscal year 2023, the outstanding balance of the SSA was outstanding. SSA estimates that its payments are inappropriately nearly $72 billion, most of which are overpayments from 2015 to 2022.
Read more: When can I get my Social Security check? Payment schedule for 2025.
Withholding is expected to begin with Social Security payments made around July 24. The withholding rate for supplemental safety income benefits is still 10%.
Those who belong to this kickback should be notified. The recipient who received the notice had a 90-day appeal.
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