The Social Security Administration (SSA) has recently made a series of significant changes to its overpayment recovery policies. These changes could have significant consequences for elderly residents or sites serving elderly or disabled residents. While the overpayment recovery policy isn't new, the rate at which SSA now withholds benefits to collect overpayments has changed in recent months, creating a possible source of financial disruption for many low-income renters.

Initially, SSA announced in March 2025 that it would begin recovering overpaid benefits by withholding 100 percent of a recipient’s monthly Social Security check until the debt was repaid. However, as of April 25, after strong backlash from the public and lawmakers, SSA has reduced the default withholding rate from 100 percent to 50 percent for Title II benefits, which include retirement, survivors, and disability insurance benefits.

While this reduced rate is a softer approach than full withholding, losing half of a fixed income can still push an affected household into crisis and may leave them unable to meet monthly expenses, including rent. This can lead to increased hardship requests, payment plans, or even missed rent payments.

Clawback Specifics

It’s also worth noting that these overpayment clawbacks can happen suddenly. Residents typically receive a mailed notice giving them 90 days to respond before the withholding begins. And many overpayment notices come as a complete surprise, especially when the overpayment was caused by the agency itself, not by the resident. A 2022 report by SSA’s Office of the Inspector General (OIG) found that tens of thousands of overpayments were caused by calculation errors or outdated systems within the agency and not by any fault of the beneficiaries.

The 50 percent withholding rate applies to new overpayments identified on or after April 25, 2025, for Social Security retirement, survivor, and disability benefits (SSDI). Prior overpayments or those identified before March 27 are generally still subject to the 10 percent withholding rate put in place by the Biden administration. Supplemental Security Income (SSI) overpayments remain capped at 10 percent, regardless of when they were assessed.

Residents notified of an overpayment have a 90-day window to respond before the clawbacks begin. During that period, they can:

Appeal the overpayment decision. If the resident believes he or she was not overpaid or the amount is incorrect, the resident would begin to appeal by completing Form SSA-561, known as the Request for Reconsideration. This appeal is submitted to the local Social Security office online, in person, or by mail. It’s important to act quickly, as the appeal must be filed within 60 days from the date listed on an overpayment notice.

Request a waiver of overpayment recovery.  If the resident acknowledges that he or she was overpaid but believes it wasn't his or her fault and that repaying the amount would cause financial hardship, the resident can request a waiver from SSA.

To do this, the resident would need to complete Form SSA-632, which is the Request for Waiver of Overpayment Recovery. In the form, the resident should provide a clear explanation and any supporting evidence showing that the overpayment wasn't due to the resident’s actions. The resident will also need to demonstrate that repaying the money would create a financial burden by detailing their current income and expenses. There is no deadline for requesting a waiver and if the resident submits a request soon after receiving the overpayment notice, SSA will pause collection efforts while the waiver is under review.

Negotiate a lower repayment rate. If a resident can’t afford the default rate of 50 percent, the resident should contact SSA either by calling 1-800-772-1213 or by visiting the local office. SSA has discretion in these cases, and outcomes can vary depending on the circumstances and the staff member handling the case. If the resident agrees to a repayment plan, it can be extended for up to 60 months, and in some cases, the resident may need to complete Form SSA-634, Request for Change in Overpayment Recovery Rate. If the resident doesn't request a lower rate within 90 days, the default withholding will continue until the overpayment is fully recovered.

Help Residents Navigate Benefit Reductions

Being aware of SSA’s policy shifts allows staff to respond with clarity and help refer affected residents to resources that can help them file appeals or hardship requests if needed. Residents often receive little notice before clawbacks begin. SSA is required to give 90 days’ notice, during which the recipient can request a waiver, appeal the overpayment, or negotiate a reduced withholding amount. But these options may not be clear or accessible for all residents—especially those without online access or support networks.

Managers can play a helpful role by encouraging residents to open and monitor their “my Social Security” accounts online, promptly report changes in household circumstances to SSA, and respond to overpayment notices without delay.

If you manage a site with elderly or disabled households, now is a good time to raise awareness and encourage residents to monitor their Social Security status regularly. For now, the default withholding rate stands at 50 percent for new overpayments, and HUD sites should be prepared for the disruptions this may cause in the months ahead.