Key Points

• The Social Security Administration under President Trump has raised the overpayment recovery rate to 50%, and the first wave of notices were mailed out in late April.

• Affected individuals have 90 days to request a reconsideration, lower withholding rate, or waiver, after which time their benefits will be reduced by 50% until the balance reaches zero.

• The Social Security Administration estimates the higher overpayment recovery rate will save $7 billion over the next decade, but the trust fund may still be depleted by 2034.

• The $23,760 Social Security bonus most retirees completely overlook ›

President Trump quickly created the Department of Government Efficiency (DOGE) at the start of his second term to bring accountability and transparency to federal spending. The Social Security Administration (SSA) has been working with DOGE to effect changes that streamline workflows and reduce costs.

One change is a more aggressive approach to recovering overpayments, and that particular initiative means some retired workers will receive smaller Social Security benefits starting in late July. Here are the important details.

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What happens when Social Security pays someone too much in benefits

The Social Security Administration estimates improper payments totaled $72 billion during the eight-year period between 2015 and 2022, and the most common error was distributing too much money. Overpayments happen for various reasons — data entry mistakes, delayed processing, and failure to report changes in circumstances like income and marital status.

When the SSA determines it has made an overpayment, it notifies the beneficiary in writing and allows 90 days for them to request a reconsideration, lower the withholding rate, or waiver. Those options are detailed below:

• Recipients who don’t think they have been overpaid can appeal the decision and request a reconsideration by filing Form SSA-561.
• Recipients who can’t afford the payments detailed in the mailed notice can request a lower withholding rate by filing Form SSA-634.
• Recipients who can’t afford to repay any portion of the outstanding balance can request a waiver of overpayment recovery by filing Form SSA-632.

Social Security’s overpayment withholding rate will increase to 50% in late July

The Social Security Administration under former President Joe Biden cut the overpayment recovery rate from 100% to 10%. The SSA then reversed its decision under President Trump, due the administration’s push for greater government efficiency. Initially, the agency raised the withholding rate back to 100% but more recently dialed that back to 50%.

The first overpayment notices informing Social Security beneficiaries about the new 50% recovery rate were mailed out on April 25, 2025. Recipients had 90 days to appeal the decision by requesting a reconsideration, lower withholding rate, or waiver.

The 90-day grace period ends in late July, so some beneficiaries will have their Social Security checks reduced by 50% later this month. Benefits will be withheld until the overpayment balance is zero.

The Social Security Trust Fund is still on pace to be depleted by 2033

The Social Security Administration initially estimated the higher recovery rate would save the agency $7 billion over the next decade. While every dollar matters, that represents just two-tenths of a percent of the deficit that Social Security is projected to run during that period.

As a result, the Social Security OASI Trust Fund — the account that pays benefits to retired workers, spouses, and survivors — will continue to shrink at a rapid clip. The trustees estimate the OASI asset reserves will be depleted by 2033. After that, continuing tax revenue will cover only 77% of scheduled payments, which means benefits could be cut 23% in eight years unless Congress resolves the funding deficit.

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