The Social Security Overpayment Letters SSA Has Been Sending Since 2024: How to Fight a $14,000 Clawback

The Social Security Administration provides important benefits to retirees and the disabled, many of whom depend on the income they receive. Unfortunately, sometimes the Administration overpays people who are receiving Social Security benefits or Supplemental Security Income (SSI). When this happens, the Administration can claw back the money.

This can become a huge problem for people who may not have even realized they were being overpaid, and who now are facing the potential loss of benefits they have been counting on.

Here’s what’s happening, along with some tips on what to do if it happens to you. 

Social Security’s efforts to collect overpayments could hurt seniors

Social Security has always been entitled to recoup overpayments. However, in recent years, the SSA has taken steps to become more aggressive in doing so. And this can be devastating for seniors and the disabled.

For example, a 71-year-old retiree might receive a Social Security letter in 2026 informing them they were overpaid $14,000 between 2022 and 2024 as a result of a Social Security calculation error. This letter comes with a demand: Pay us back in 30 days. 

If you don’t pay the Social Security Administration back, the Administration starts withholding benefits. So, this senior retiree could begin losing some of his Social Security income unless he can come up with $14,000 in a month’s time — an impossibility for most.

What are the Social Security clawback rules for overpayments?

The traditional rule was that the Social Security Administration could withhold your entire benefit until recouping the overpaid funds. So, seniors or the disabled would see their full Social Security checks disappear.

But, a 2023 investigation by the Kaiser Family Foundation drew attention to the fact that clawbacks were increasing, and demonstrated how efforts to help Social Security’s finances by recouping overpayments were causing devastation to disabled and elderly people who could not afford to see their benefits cut off. 

The Biden Administration took action, and the default withholding rate was scaled back to protect vulnerable beneficiaries. Specifically, the default would be to withhold no more than 10% of benefits until the overpayment has been repaid in full.

In March of 2025, however, the Trump Administration announced that it would reinstate the 100% withholding rate. The Kaiser Family Foundation reported that an estimated 669,903 people at that time had part of their benefits withheld. All of them could have been affected by this change.

However, amidst public outcry, the Administration reversed course, instead defaulting to withholding 50% of retirement benefits or 10% of SSI benefits.  This new withholding rate applies to new overpayments. 

While this is better than 100%, a 71-year-old retiree, who is getting a benefit of $2,000 per month (around the average), could be left to live on just $1,000 until the $14K is repaid. 

What should you do if you get an overpayment letter?

If you get a letter saying you’ve been overpaid by Social Security and need to return the money or face loss of benefits, you do have some options. In fact, there are three different courses of action you could pursue:

• Request for reconsideration: You can request reconsideration within 60 days using Form SSA-561. The request for reconsideration requires arguing that you were not overpaid, or that you were not overpaid by the amount the Social Security Administration claims. 
• Waiver request:  You can use Form SSA-632, Request for Waiver of Overpayment Recovery. With this form, you don’t contest that you were overpaid. Instead, you’ll argue that you shouldn’t have to pay back the amount you were overpaid because the overpayment wasn’t your fault, and you cannot afford to repay the money. You’d need to show that being forced to pay back the money would cause financial hardship, and you can’t afford it.
• A negotiated repayment plan: Finally, with this approach, you agree to repay the overpayment, but you do it by working with the SSA to create a repayment plan instead of having half of your benefits taken. Typically, many people end up negotiating to repay between $50 and $200 per month.

If you submit a form requesting a reconsideration or waiver, the SSA will not begin withholding the money until it is resolved. You need to take action within 60 days to make your request.  So, don’t wait if you’re sent an overpayment letter.