The Social Security Administration changed how it collected overpayments after a series of Channel 2 Action News investigations exposed problems with its policies. Now, the Trump Administration is overturning those changes in how SSA claws back overpayments.
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In a statement, SSA said it will increase the default overpayment withholding rate for Social Security beneficiaries to 100% of a person’s monthly benefit. That percentage had been cut to 10% last year.
Former SSA Commissioner Martin O’Malley blasted the move in an interview with Channel 2 Action News.
“This is a mistake. You’re hurting people. Go back to the policy that it took us years to get them to implement,” O’Malley said.
In a series of Channel 2 Action News investigations in partnership with KFF Health News and our Cox sister stations, we heard from more than 400 families who have gotten demand letters from the Social Security Administration asking them to pay back thousands - or even tens of thousands of dollars. Often the mistakes were not their fault, but SSA’s.
In testimony before Congress last spring, O’Malley called it “clawback cruelty” and announced that SSA would only hold back 10% of recipients’ monthly checks for repayments.
But the Trump administration says it can save as much as $7 billion over the next decade by withholding 100% of monthly checks instead of 10%.
“We have the significant responsibility to be good stewards of the trust funds for the American people. 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,” said Lee Dudek, Acting Commissioner of Social Security.
O’Malley countered that the policy change will unfairly hurt the most vulnerable.
“I guess it’s good for the DOGE bros up there to say, oh, we’re recovering more money. The money they think they’re recovering is not money that can be recovered. It’s from senior citizens usually living on the cusp of poverty. Which is why Democratic and Republican senators heralded, applauded and praised the change,” O’Malley said.
Advocates for Social Security beneficiaries described the action as cruel and harmful.
“The results are predictable: more unnecessary suffering,” said Kathleen Romig, who worked at the Social Security Administration under O’Malley and is now director of Social Security and disability policy at the Center on Budget and Policy Priorities.
Kate Lang of the advocacy group Justice in Aging said she was heartbroken.
“Those who are most vulnerable, with the fewest resources, are the ones who will feel the harsh impacts of this change,” she said.
Many “are going to be unable to buy food or keep the roof over their head,” she said.
In 2023, after an investigation by Channel 2 Action News, KFF Health News and Cox Media Group cast a spotlight on overpayments and clawbacks, lawmakers from both parties called on the Social Security Administration to change its approach.
The policy changes a year ago were inspired in part by the plight of people like Denise Woods, who was sleeping in her Chevy in Savannah, Georgia, in December 2023 while contending with lupus and congestive heart failure after the government cut off her disability benefits. The government was demanding she repay almost $58,000.
Many overpayments are the result of government error. It can take the government years to figure out it has been paying someone too much, and by then, the amount the government says it is owed can grow far beyond a beneficiary’s ability to repay. It has often demanded that recipients repay the full amount within 30 days.
As of October 2024, the SSA was withholding at least a portion of monthly benefit payments from hundreds of thousands of people, according to data the SSA provided last fall to KFF Health News and Cox Media Group. The agency said it was withholding up to 10% percent or less from 669,903 people to recoup an overpayment. Asked whether those numbers covered all types of benefits administered by the SSA, the agency’s press office didn’t say.
“Under Trump’s leadership, Social Security has reinstated a cruel policy of clawing back Social Security overpayments with no regard for an American’s ability to pay or whether the overpayment was an error by the agency,” said Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee.
The new plan to completely withhold monthly benefits from recipients who were allegedly overpaid does not extend to the Supplemental Security Income program, one of two Social Security programs for people with disabilities. SSI, as the agency explains, covers “people with disabilities and older adults who have little or no income or resources.”
The SSA’s March 7 announcement was part of a broader dismantling of Biden-era policies under President Donald Trump. It was also part of a broader upheaval at the Social Security Administration, which announced In February that it would cut its staff from about 57,000 to 50,000.
The staffing cuts will lead to more overpayments than ever and will make it harder for the people affected to clear up mistakes, said Jen Burdick, an attorney at Community Legal Services of Philadelphia.
“We’ve already seen a huge impact on the ability to get claimants representatives on the phone. People are saying it’s harder to get into the offices that are open. So, we think it’s going to make it much harder,” Burdick said.
As KFF Health News and Cox Media Group revealed in 2023, about 2 million people a year were receiving notices from the SSA that they were overpaid and owed money back.
People can appeal overpayment notices, request a lower withholding rate, or ask the SSA to waive collection altogether, the agency said. The SSA does not pursue recoveries while an initial appeal or waiver request is pending, it said.
Shortly before O’Malley left the SSA in November, the agency implemented changes that made it easier for beneficiaries to get overpayments waived. The agency spelled out grounds for determining the beneficiary was not at fault. For instance, if the agency continued to issue overpayments after the beneficiary reported a change in their financial circumstances that should have led to a reduction in benefits. Those policy changes remain intact.
Several Republicans who expressed concern about clawbacks in the aftermath of 2023 news coverage did not respond to inquiries for this article or declined to comment. One of them was Sen. Rick Scott, who is now chair of the Senate’s Special Committee on Aging.
“Hardworking American taxpayers pay into Social Security all of their lives so that they can depend on it in the time they need it most,” Scott said in a 2023 letter to the agency. “The fact that the SSA’s actions are leaving some of them worse off, through no fault of their own, is absolutely unacceptable.”
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