Key Policy Change Affecting Seniors and Self-Employed
The Social Security Administration announced a significant policy reversal that could impact seniors and self-employed business owners receiving benefits. Starting March 27, 2025, the SSA will return to withholding 100% of monthly benefits when recouping overpayments, abandoning the more lenient 10% withholding rate implemented under the Biden administration in 2024.
Important Details:
- Implementation date: March 27, 2025
- Who is affected: Anyone who receives an overpayment after March 27
- Previous recipients: Those who received overpayment notices before March 27 will remain at their current withholding rate
- Financial impact: The SSA projects this change will recover approximately $7 billion over the next decade
What Recipients Need to Know:
If you cannot afford to have your entire benefit withheld, you can contact Social Security at 1-800-772-1213 or your local office to request a lower recovery rate.
Additional Context:
This policy change comes amid significant workforce reductions at the SSA, with plans to lay off between 7,000 to potentially 30,000 employees from its 60,000-person workforce. These cuts align with broader federal department reductions under the current administration and the newly formed Department of Government Efficiency.
For seniors and self-employed individuals relying on Social Security benefits, understanding this policy change is crucial for financial planning and avoiding potential hardship from unexpected benefit suspensions.
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