The Social Security Administration released important information in March on the implementation of the Social Security Fairness Act and changes to how social security overpayments will be clawed back.
First, the SSA said it had made significant progress on making retroactive payments to those due to receive them as part of the Social Security Fairness Act and the repealing of the Windfall Elimination Provision and Government Pension Offset. The average retroactive payment so far is $6,710, the agency said.
The payments are being made in lump sums for benefits dating back to January 2024 with updated benefits amounts expected to begin in or around April.
Although the additional benefits are a positive change for people, there are some questions around whether the lump sum may impact a person’s other public benefits, said Andrew Bardetti, Supervising Attorney in the Elder Law Unit at South Coastal Counties Legal Services, in an email interview.
The answer depends on a person’s circumstances, he noted, saying that anyone who has a concern is free to contact the SCCLS office for advice.
Speaking generally, Bardetti said, a lump sum payment from Social Security should not count as an asset for at least six months for MassHealth purposes. It’s at least six months because, while the MassHealth regulation refers to six months, the federal regulation states nine months, he said.
The increase in income from the higher monthly payments may put people over the MassHealth Standard income limit, according to Bardetti. People in that situation may be eligible for programs with higher income limits and thus be able to preserve MassHealth coverage.
“If you receive a notice from MassHealth about the lump sum or higher income impacting your benefits, you may wish to contact our office or another attorney for advice as each person’s situation is different,” he said.
Also in March, the SSA said it will increase the default overpayment withholding rate for Social Security beneficiaries to 100 percent of a person’s monthly benefit. The overpayment withholding default had been 10% as of March 2024 when it was decreased from 100% to prevent hardship on beneficiaries.
The decision means people who have received a higher benefit than they are due, whether through wrong information on their part or a miscalculation by the Social Security office, may have their entire benefit withheld to recoup the overpayment.
“The overpayment switch to 100% reinstates a former policy of automatically collecting a person’s entire Social Security or Social Security Disability Income payment when they are considered overpaid,” said Bardetti, via email. “While the ssa.gov website says this will only be for new overpayments as of March 27, 2025, it is unclear exactly who will be impacted. People on Supplemental Security Income (SSI) will continue to have the withholding limited to 10%.”
“The impact of reverting to an automatic 100% recovery is that anyone with an overpayment will likely be notified that they will not receive their monthly payment until the overpayment is paid back,” Bardetti continued. “100% equals your entire check. If that does happen to you, then you have a couple options. First you can appeal the decision to withhold the money. Second, you can file a waiver to ask the SSA to forgive the amount owed. Last, you can file a form to change the withholding to an amount you can afford. Again, if you are faced with this situation, SCCLS may be able to provide you with legal advice and/or representation.”
As of March 27, the agency said it will begin mailing notices about the new 100% withholding rate. If someone cannot afford full recovery of their overpayment, they can contact Social Security at 1-800-772-1213 or their local office to request a lower rate of recovery.
The agency said it strives to pay the right person the right amount at the right time, and issues correct payments to most beneficiaries. When an overpayment does occur, it is required by law to seek repayment.
In its March 7 announcement, the SSA said estimates by the Office of the Chief Actuary said the decision will increase overpayment recoveries of about $7 billion in the next decade.
“We have the significant responsibility to be good stewards of the trust funds for the American people,” said Lee Dudek, Acting Commissioner of Social Security. “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.”
For more information about overpayments and appeal rights, visit www.ssa.gov.
South Coastal Counties Legal Services is available to older adults as well as low-income people under 60 who are facing issues related to WEP or an overpayment. For help, call the intake number at 1-800-244-9023 or visit sccls.org for an online intake.
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