The Social Security Administration (SSA) plans to return to its policy of withholding up to 100% of recipients' checks to recover overpayments to beneficiaries, reinstating a plan that was abandoned last year when some Americans were shocked to get bills for thousands of dollars.
By law, the agency is required to claw back overpayments, but last year, the agency opted to cap the withholding rate, keeping 10% of the person's monthly benefit check, but on Friday, the agency said it will start to claim 100% of benefit checks to cover new cases of overpayments, reports CBS News.
SSA Acting Commissioner Lee Dudek said that it is the agency's "duty to revise the overpayment repayment policy back to full withholding."
"We have the significant responsibility to be good stewards of the trust funds for the American people," he added.
The agency said that raising the clawback rate to 100% from its current rate of 10% will bring back $7 billion in funds over the next decade. About $1.6 trillion in funds are paid out through SSA annually.
People who had overpayments before March 27 will continue to have 10% of their checks withheld for the repayments. The rate for overpayments for Supplemental Security Income, the program for disabled Americans and low-income seniors, will also remain at 10% of monthly benefit checks.
"People who are overpaid after March 27 will automatically be placed in full recovery at a rate of 100% of the Social Security payment," the agency said in its announcement.
Last year, the 100% clawback policy was met with outcry after beneficiaries got bills, sometimes for tens of thousands of dollars, with a demand for repayment in 30 days.
If they were not able to immediately pay their bills, the agency was able to dock their full Social Security checks, leaving them without any income.
However, SSA was to blame for many of the overpayments, not the recipients.
According to a report in 2022 by the agency's inspector general, 73,000 overpayments went out that year because of the lack of "effective controls over benefit-computation accuracy."