By Christy Rakoczy
NewsBreak
https://www.newsbreak.com/
Around 73.9 million people collect Social Security benefits, including 52.6 million retired workers, according to Pew Research.
Those who receive Social Security often depend heavily on it.
In fact, Pew Research reports that in 2022, Social Security provided at least half of all personal income for around 38.2 million people, while 26.5 million people counted on Social Security to provide at least ¾ of their income. And, for 16.4 million people, Social Security was the only income source.
For those relying on Social Security benefits, anything that interferes with their arrival could be a major problem. That’s why retirees need to be on high alert about a change that is coming in August. This change could see some retirees losing up to 50% of their benefits.
Who is at risk of a Social Security benefit cut in August?
Benefit checks for retirees are at risk in August because some Social Security retirees were overpaid benefits in the past.
Overpayments account for the majority of the $72 billion in improper payments made by the Social Security Administration, according to a report from the Social Security Administration’s Office of the Inspector General released in August of 2024.
The Trump Administration is now moving to recoup those overpayments, so those who received more Social Security than they should could face a benefit cut.
Why is the August Social Security benefit cut so big?
Overpayments have always been collectable, but the percentage of a retiree’s check that would be taken to collect them is changing.
In March of 2024, Social Security reduced the amount withheld from checks to repay overpayments down to 10%. The Trump Administration is now changing that.
“We are changing our policy for the default 10 percent benefit withholding to recover a Title II overpayment. Effective April 25, 2025, overpayment notices will provide a default Title II overpayment benefit withholding rate of 50 percent of the monthly benefit.”
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- Dave Ramsey offers urgent thoughts about Medicare
- Jean Chatzky shares major statement on Social Security
- Tony Robbins has blunt words on IRAs,401(k)s
At first, the Administration actually threatened to withhold 100% of benefits until overpayments were repaid, but then softened this down to 50%.
How do Social Security retirees know if their benefits will be cut?
Overpayments usually occur if:
- Social Security does not correctly calculate your benefit
- You fail to report a change in your income
Social Security sent out a letter notifying retirees who had been overpaid that some of the money would be taken back. The letter was effective as of April 25, 2025.
However, retirees were given 90 days to seek a waiver and request that they be allowed to continue repayment at the lower rate. After that time, the withholding would begin. This means withholding would start after July 24.
The Social Security schedule of benefits payments shows that the next payment date after this change goes into effect is August 1, 2025. That means retirees who received notice of an overpayment and who did not successfully get a waiver are going to start seeing their checks lowered in August.
This is likely to be a substantial hit for many seniors who count on these benefits to make ends meet.
What should Social Security retirees do?
- If your Social Security benefit is reduced as a result of your overpayments, you should request a waiver ASAP if you can’t afford the benefit cut;
- Request reconsideration if you think you didn’t overpay or that Social Security’s calculations were incorrect;
- Prepare for a cut to benefits you were overpaid and will not qualify for a waiver.
