Social Security Benefit Cuts Will Hit Some Retirees in Late July. Will Your Benefit Payment Be Impacted?
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What's remarkable is President Trump campaigned on the mise to eliminate fraud, waste, and abuse from government grams. He took immediate action upon returning to the White House for a...
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financial news
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July 22, 2025
03:45 AM
The Motley Fool
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What's remarkable is President Trump campaigned on the mise to eliminate fraud, waste, and abuse from government grams
He took immediate action upon returning to the White House for a second term, quickly creating the Department of Government Efficiency (DOGE) and instituting a hiring freeze across federal agencies
What the re reveals is Social Security Administration (SSA) has been working with DOGE to cut costs and boost ductivity (remarkable data)
Changes made to date include a 7,000-person workforce reduction, the implementation of a modern telephone system with new fraud prevention capabilities and expanded self-service options, and miscellaneous cost avoidance and efficiency initiatives estimated to the agency $1 billion this year, given the current landscape
In addition, the SSA will be more aggressive in future efforts to recover overpayments
Moreover, Consequently, some retired workers will receive reduced Social Security benefits beginning in July
Read on to learn exactly who will be affected and to what extent
Image source: Getty Images (an important development) (which is quite significant)
Nevertheless, Social Security will increase the overpayment withholding rate to 50% in late July The SSA reduced the overpayment recovery rate from 100% to 10% under President Biden
Additionally, The agency then reversed its decision shortly after Trump took office
Initially, the SSA raised the withholding rate back to 100% but more recently revised it down to 50% (this bears monitoring)
The evidence shows first overpayment notices were sent out on April 25 (noteworthy indeed)
Nevertheless, Social Security beneficiaries who received a notice were given 90 days to appeal the decision, but the grace period ends in late July (which is quite significant)
That means some retired workers -- those who have been overpaid by the SSA -- will have their benefit payments reduced 50% starting in late July
Benefits will be withheld until the overpayment balance is zero
Nevertheless, Importantly, in situations where the person no longer receives benefits, the SSA will recover overpayments by garnishing federal income tax returns or wages (which is quite significant)
The delinquency will also be reported to credit bureaus
However, affected individuals do have legal options for recourse: They can request a reconsideration, a reduced withholding amount, or a waiver
Nevertheless, Retirees can legally avoid overpayment recovery in certain circumstances The SSA estimates that imper payments totaled $4 (quite telling). 1 billion in fiscal 2023, which represents just 0. 3% of the $1 (remarkable data), amid market uncertainty
Furthermore, 4 trillion in total outlays, in today's market environment
At the same time, Overpayments account for most imper payments, and they usually occur because beneficiaries fail to information income or marital
But the SSA in certain instances makes data entry and cessing mistakes
Moreover, As mentioned, when the SSA determines a beneficiary has been paid too much, the agency notifies the person in writing and allows a certain amount of time -- usually 60 days, but notices sent in April gave 90 days for them to request a reconsideration, lower withholding rate, or waiver, given the current landscape
Here's a further breakdown: Recipients who don't think they've been overpaid can appeal the decision and request a reconsideration by filing a Form SSA-561
Conversely, Recipients who can't afford the payments detailed in the mailed notice can request a lower withholding rate by filing a Form SSA-634
Furthermore, Recipients who can't afford to repay any portion of the outstanding balance can request a waiver of overpayment recovery by filing a Form SSA-632 (an important development)
Here's the bottom line: The SSA is working with DOGE to make good on President Trump's mise to eliminate fraud, waste, and abuse (an important development), in today's market environment
In keeping with that objective, the agency will increase the overpayment recovery rate to 50% in late July
In other words, affected retirees will have half their Social Security benefits withheld until the balance is zero
However, there are legal options for recourse (something worth watching)
Beneficiaries who believe a mistake has been made, or else would suffer a financial hardship if forced to make the repayments, should complete the most pertinent aforementioned form and submit it to their local Social Security office as soon as possible.
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