Only a few weeks after announcing a 100% withholding rate in new payments excesses of benefits, the Social Security Administration has reduced the 50% rate for certain beneficiaries.
However, that monthly gains checks can still cause a financial burden for affected people, experts say.
For the new excess payment notices sent as of April 25 or later, the 50% default retention rate will apply to the so -called benefits of Title II, which include retirement insurance, survivors and disabled, according to an emergency message published by the Social Security Administration.
The retention rate of supplementary safety income benefits remains 10%.
“Obviously, it is better not to lose all its income,” said Kate Lang, director of Federal Income Safety of Justice In Aring, a national organization focused on combating senior poverty.
“But if you trust your benefits to pay your rent or your mortgage and buy food, losing half of that income will be devastating and can still result in people are homeless,” Lang said.
How beneficiaries end due to social security
The beneficiaries can obtain the money from the Social Security Administration due to excessive payments, when their monthly benefit checks are more than they are owed. Erroneous payments can occur for a variety of reasons, as if a beneficiary does not inform a change in their circumstances to the agency or if the agency does not processes the information immediately or enters errors in their data.
When the Social Security administration determines that a beneficiary has been paid in excess, a notice is sent to request a complete and immediate refund, according to the agency.
The beneficiaries generally have 90 days to request a lower rate of retention, a reconsideration or a resignation to recovery. If they do not make such a request within that 90 -day window, the agency will retain up to 50% of its benefits until the sum of the amount paid in excess is completely recovered, according to the agency’s update.
The Social Security Administration had previously announced that the default retention rate for 100%excessive payments would increase. According to the administration of President Joe Biden, the default retention rate had been reduced to 10% of the monthly benefit of a beneficiary or $ 10, whatever greater. In general, the beneficiaries of the rate are subjects are based on the terms at the time they were notified.
“In the last 100 days, we have passed as low as 10 [percent] 100 and now at 50, ”said Richard Party, executive director of the Alliance for Retired Americans.
The 100% retention rate was “ridiculously draconian and cruel,” said Fiesta. The Social Security Administration had said that the change at that full recovery rate would generate around $ 7 billion in programs savings in the next decade, according to the main actary estimates.
However, even with the default retention rate, in half, beneficiaries may still have financial difficulties.
“Lose 50% [of benefits] For many people I could put them in immediate economic difficulties, ”said Fiesta.
In most cases, it was not the fault of the beneficiary who were paid in excess, party said. “They should not put a worse situation due to something that never caused in the first place,” he said.
‘Much discretion’ in the negotiation of refund terms
While beneficiaries have the ability to negotiate payments, there is no guarantee that they are successful and the results may vary, according to Lang.
“There are thousands of employees with whom individual beneficiaries are going to deal with an exemption or ask to negotiate a different reimbursement rate,” Lang said. “And those employees have a lot of discretion in what they decide.”
The beneficiaries who deal with excessive payment problems also face long waiting times to make an appointment to visit an office of the Social Security Administration, which can interfere with their ability to exercise the options available for them, he said.
The Social Security Administration did not respond to the request for CNBC comments.
