In August 1935, President Franklin D. Roosevelt signed the Social Security Act into law. Its goal was to provide a financial foundation for aging workers who could no longer do so for themselves. Nine decades later, it's still performing this task, and has expanded its protections to include workers with disabilities and survivors of deceased workers.
For most retirees, their Social Security income is indispensable. Based on 24 years of annual surveys from Gallup, 80% to 90% of retirees lean on their monthly benefit, in some capacity, to make ends meet. If something were to happen to this monthly check, retired-worker beneficiaries could find themselves in big trouble.
But for more than 1 million beneficiaries, this "what if?" has become a reality. Due to changes implemented under the Donald Trump administration via the Social Security Administration (SSA), up to 50% of Social Security checks for select beneficiaries are now being garnished. The good news is a significant percentage of those affected may be able to legally avoid it.
President Trump delivering a speech. Image source: Official White House photo.
The Donald Trump administration is targeting Social Security overpayments
Numerous changes to the Social Security program have been made in the seven months since President Trump was inaugurated for his second nonconsecutive term. For example, the president is putting an end to paper checks by Sept. 30 (via executive order). Direct deposits will be cheaper for the federal government and should reduce the likelihood of Social Security scams.
Building on this point, the SSA has ramped up personal identification measures. With few exceptions, beneficiaries will need to change their direct deposit information in person, or do it online where two-factor authentication methods can be used.
But without question, the biggest Social Security change that's taken place under the Trump administration is adjusting the monthly garnishment rate associated with benefit overpayments.
During Joe Biden's presidency, the overpayment recovery rate was lowered to 10%. In other words, if you had been overpaid by the SSA, the agency would garnish your monthly benefit by 10% until full repayment had been made. In comparison, the overpayment recovery rate during Trump's first term and Barack Obama's presidency was 100%.
Though the SSA attempted to return to this 100% recovery standard earlier this year, it was met with public backlash. In April, the agency backtracked and set the overpayment recovery rate at 50%. On April 25, the SSA began sending out repayment notices.
For context, nearly 2 million beneficiaries (retired workers, workers with disabilities, and survivors of deceased workers) hadn't paid back approximately $23 billion in aggregate overpayments, as of the end of fiscal 2023 (the federal government's fiscal year ends on Sept. 30).
These letters informed beneficiaries of their options and gave them 90 days to satisfy their overpayment before garnishment would begin. This means Social Security garnishment may have kicked in as early as July 24 for some beneficiaries.
Image source: Getty Images.
Overpaid beneficiaries may have options to legally reduce or avoid Social Security garnishment
You might be wondering how Social Security overpayments occur in the first place. Sometimes, it's entirely the fault of the SSA. But in other instances, it comes down to beneficiaries not updating their income with the agency.
For instance, let's say a non-blind worker with disabilities lands a new job. In 2025, non-blind workers with disabilities are allowed to earn up to $1,620 per month in wages and salary without having their disability income stopped. But if this individual fails to report their newfound income, and it's considerably higher than $1,620 per month, they'll receive more Social Security income than they're entitled. Once their federal and/or state income taxes are filed, it can alert the SSA to an overpayment.
The silver lining for these overpaid individuals is there are three options that may allow them to reduce or completely avoid paying back these funds -- and these options are 100% legal.
The most favorable of the three choices would be to have the overpayment completely waived/forgiven. If the overpayment wasn't your fault, and you can demonstrate to the SSA that paying back the extra benefits would create a financial hardship, filing Form SSA-632BK (Request for Waiver of Overpayment Recovery) may be your best path forward. Just understand you'll need documentation showing that your qualified expenses would be higher than your remaining income with repayment.
The next most-favorable approach would be to file Form SSA-561 (Request for Reconsideration). Overpaid beneficiaries go this route with two purposes:
- If you believe you haven't been overpaid and the SSA made a mistake, you'd file SSA-561 and provide evidence that supports your claim.
- If you agree that you've been overpaid but are contesting the amount the SSA seeks to recover, you'd file SSA-561 and offer evidence that supports the overpayment figure you claim is correct.
SSA-561 can result in your overpayment liability being waived, or can potentially reduce how much you'll need to repay.
The final legal option available to overpaid beneficiaries is Form SSA-634 (Request for Change in Overpayment Recovery Rate). This option is an admission to the SSA that you've been overpaid, but requests a way to manage how much or how long your Social Security payout will be garnished.
Similar to the first option, you'll need to provide documentation that lists your qualified expenses. If you can demonstrate that a 50% garnishment rate would lead to a financial hardship, the SSA can work with you to possibly reduce your garnishment rate and/or set up a payment plan spanning 12 months or potentially up to 60 months (five years).
