A PROMINENT senior citizens group has introduced a proposal suggesting that Social Security recipients could receive nearly $500 in payments using funds from repaid overpayments.
The Social Security Administration (SSA) issues billions of dollars in monthly benefits to almost 70 million recipients.
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Social Security payments serve as a crucial source of income for retirees, survivors, and Americans with disabilities.
If the federal government recovered its usual amount of overpaid benefits in a typical year, it could pay out a one-time payment of $495 to seniors, according to an analysis by The Senior Citizens League (TSCL).
This proposed payment could help compensate for a lower-than-expected Cost of Living Adjustment (COLA) in 2026, according to TSCL.
The COLA increase is estimated to be 2.2 percent, though the official announcement won’t come until October.
TSCL stated, “This would be a strong tool to make up for a lower COLA than seniors are hoping for.”
EFFECTS OF THE CHANGE
The SSA has faced criticism over its handling of overpayments in recent years.
Some seniors who have been unknowingly overpaid are required to return the full amount within 30 days.
If they are not able to return the full amount, they risk having future benefits withheld until the debt is repaid.
A Congressional Research Service report found that the SSA overpaid a total of $6.5 billion in the 2022 fiscal year.
To reduce financial hardship for recipients, the SSA had implemented a policy limiting repayment deductions to 10 percent of a person’s monthly benefit under the Biden administration.
However, the Trump administration recently reversed this.
Under a new policy announced last week, the SSA will reinstate a 100 percent repayment requirement for all overpayments made after March 27.
It does not include Supplemental Security Income (SSI) benefits.
MIXED REACTIONS
TSCL Executive Director Shannon Benton criticized the change, calling it unfair.
“The clawback of payments is especially unfair to seniors who do not have external support to help manage their finances and track their benefits,” Benton said in a press release.
“Many beneficiaries may not be aware of an overpayment and could suddenly find themselves without a check.”
Meanwhile, acting Social Security Commissioner Lee Dudek defended the decision, emphasizing the agency’s duty to protect public funds.
“We have the significant responsibility to be good stewards of the trust funds for the American people,” said Dudek.
“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.”
In a statement released on March 7, the SSA projected that reinstating full repayment requirements could result in an estimated $7 billion in recovered overpayments over the next decade.
