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NBC News
05-05-2025
- Business
- NBC News
Social Security reduces benefit clawback from 100% to 50% for some; experts still warn of 'devastating' effects
Just weeks after announcing a 100% withholding rate on new overpayments of benefits, the Social Security Administration has slashed the rate down to 50% for certain beneficiaries. Yet that clawback on monthly benefit checks may still cause a financial burden for individuals who are affected, experts say. For new overpayment notices sent on or after April 25, the 50% default withholding rate will apply to so-called Title II benefits, which include retirement, survivors and disability insurance, according to an emergency message released by the Social Security Administration. The withholding rate for Supplemental Security Income benefits remains 10%. 'Obviously, it's better not to lose all of your income,' said Kate Lang, director of federal income security at Justice in Aging, a national organization focused on fighting senior poverty. 'But if you're relying on your benefits to pay your rent or your mortgage and buy food, losing half of that income is going to be devastating and can still result in people becoming homeless,' Lang said. How beneficiaries end up owing Social Security Beneficiaries may owe the Social Security Administration money due to overpayments — when their monthly benefit checks are more than what they are owed. The erroneous payments can happen for a variety of reasons, such as if a beneficiary fails to report a change in their circumstances to the agency or if the agency does not process information promptly or enters errors in its data. When the Social Security Administration determines a beneficiary has been overpaid, a notice is sent to request a full and immediate refund, according to the agency. Beneficiaries typically have 90 days to request a lower rate of withholding, a reconsideration or waiver of recovery. If they do not make such a request within that 90-day window, the agency will withhold up to 50% of their benefits until the sum of the amount that was overpaid is fully recovered, according to the agency's update. The Social Security Administration had previously announced that it would increase the default withholding rate for overpayments to 100%. Under President Joe Biden's administration, the default withholding rate had been dropped to 10% of a beneficiary's monthly benefit or $10 — whichever was greater. Generally, the rate beneficiaries are subject to is based on the terms at the time they were notified. 'In the last 100 days, we've gone from as low as 10 [percent] to 100 and now to 50,' said Richard Fiesta, executive director of the Alliance for Retired Americans. The 100% withholding rate was 'ridiculously draconian and cruel,' Fiesta said. The Social Security Administration had said the change to that full recovery rate would generate about $7 billion in program savings in the next decade, based on estimates from the chief actuary. Yet even with the default withholding rate cut in half, beneficiaries may still struggle financially. 'Losing 50% [of benefits] for a lot of people could put them into immediate economic hardship,' Fiesta said. In most cases, it wasn't the beneficiary's fault that they were overpaid, Fiesta said. 'They shouldn't be put in a worse situation because of something they never caused in the first place,' he said. 'A lot of discretion' in negotiating repayment terms While beneficiaries do have the ability to negotiate the payments, there is no guarantee they will be successful and the outcomes may vary, according to Lang. 'There are thousands of employees that individual beneficiaries are going to be dealing with to ask for a waiver or ask to negotiate a different repayment rate,' Lang said. 'And those employees have a lot of discretion in what they decide.' Beneficiaries who are dealing with overpayment issues also face long wait times to make an appointment to visit a Social Security Administration office, which can interfere with their ability to exercise the options available to them, she said. The Social Security Administration did not respond to CNBC's request for comment.
CNBC
05-05-2025
- Business
- CNBC
Your Social Security card will soon be available digitally. What to know
For many Americans, a Social Security number is the first form of identification they receive, mailed as a paper card a few weeks after birth. Now, the Social Security Administration is looking to give that form of ID an update by enabling secure digital access to Social Security numbers that will provide an alternative to the traditional Social Security card. Experts are cautiously optimistic about the idea, but have some security concerns. The new digital feature will allow individuals who have either forgotten their Social Security number or who have lost their Social Security cards to access their personal number online through the agency's My Social Security website. They will also be able to access their Social Security numbers through digital devices and display them as identification for "reasons other than handling Social Security matters," according to the agency. More from Personal Finance:Social Security reduces benefit clawback rateTrump administration restarts student loan collectionsWhat experts say about claiming Social Security benefits early With the new effort, the Social Security Administration aims to reduce the inconveniences caused by lost or stolen cards, which currently requires individuals to apply for replacements either online or in person. "We believe that this modern approach will meet the needs of our constituents in a more efficient manner," Social Security Administration acting commissioner Lee Dudek said in a statement. The agency declined to provide more details the rollout, which is scheduled to become available early this summer. Experts are cautiously optimistic about the change. "Generally, anything that is a new avenue for accessing your account or in an interaction with Social Security is a good thing, so long as it's easy and secure," said Richard Fiesta, executive director at the Alliance for Retired Americans. However, the risk is that some individuals, particularly those who are older or disabled, may be left without access if they are not as tech savvy and have difficulty using the internet or mobile phones, he said. My Social Security is "not the most customer friendly website," Fiesta said, despite efforts to improve it over the years. The move toward digital Social Security identification is "certainly a step in the right direction," said Eva Velasquez, CEO of the Identity Theft Resource Center. If implemented properly, the digital Social Security numbers may provide more security than paper cards, she said. "But it really doesn't solve the problem of identity misuse," Velasquez said. Every adult's Social Security number has likely already been breached, according to Velasquez. The size of the 2024 National Public Data breach prompted some experts to speculate every American could have been affected. The 2017 Equifax breach was estimated to have affected roughly half the U.S. population. The new process will raise questions as to how to protect both the Social Security numbers and the devices on which they are accessed, she said. Ultimately, the U.S. in the future will likely move toward a federated identity system, where a user's identity can be verified with biometric data like fingerprints and facial recognition that is linked across multiple systems, said Cliff Steinhauer, director of information security and engagement at The National Cybersecurity Alliance. "There's going to be a future where there's a clean internet, where everyone that uses it has authenticated with this federated, proven identity so that nobody can pretend to be anybody else," Steinhauer said. The Social Security Administration's move is a first step toward digital identification, though it does not appear to include biometric authentication, he said. Because there will be risk for fraud, it will be important for the Social Security Administration to make sure its systems are properly protected, Steinhauer said. There should also be phishing-resistant authentication installed to ensure that only authorized individuals access the accounts, he said. It will be important for individuals to verify that any messages that allegedly come from the Social Security Administration do, in fact, take them to a verified Social Security website. Any messages the agency sends out, such as a reminder to log in and check an account, could be copied for phishing purposes, Steinhauer said.
Yahoo
25-02-2025
- Business
- Yahoo
Social Security advocates are ringing alarm bells about Elon Musk and DOGE
As billionaire Trump advisor Elon Musk continues to fire staff, cancel contracts, and eliminate office leases across the federal government, retirees, Social Security advocates, and Democratic politicians are fretting about what could happen to the agency that delivers cash benefits to some 73 million Americans each month—one charged with paying out $1.5 trillion in benefits annually, or over 20% of the federal government's total budget. In a lawsuit filed late last week, a coalition of unions and retirees sued the Social Security Administration (SSA) to halt what they call an "unprecedented, unlawful seizure of personal, confidential, private and sensitive data" by the Musk-led Department of Government Efficiency (DOGE). The coalition, led by the nonprofit Alliance for Retired Americans and the American Federation of State, County and Municipal Employees, is just one set of advocates ringing alarm bells about the billionaire's access to Americans' financial and medical data and personal addresses that are housed in SSA databases. "Social Security is a sacred trust between the American people and the government," Richard Fiesta, executive director of the Alliance for Retired Americans, said in a press release. "We cannot risk the catastrophic consequences should this very personal data fall into the wrong hands." The agency is "the central hub for Americans' most sensitive personal and financial information," say a group of Democratic senators who are also worried about DOGE's actions. The data contained in Social Security profiles includes: Social Security Numbers Bank and credit card information Birth and marriage certificates Pension information Home and work addresses School records Citizenship status Immigration or naturalization records IRS earnings records Health care providers' contact information Family court records Employment and employer records Psychological or psychiatric health records Hospitalization records and addiction treatment records Test for or records of HIV/AIDS That data could have "significant commercial value," the senators wrote in a letter to DOGE-appointed Acting Commissioner Leland Dudek, and there are many privacy laws in place to protect it that DOGE does not appear to be following. "There is a profound risk of causing irreparable harm to the agency's systems and Americans' financial security," stated Sens. Ron Wyden (D-Ore.), Chuck Schumer (D-N.Y.), Patty Murray (D-Wash.), Tammy Baldwin( D-Wis.), and Bernie Sanders (I-Vt.). Fiesta notes that if that sensitive information were to be compromised, it could lead to untold troubles for all Americans whose data is stored by SSA. In the wrong hands, scammers could use it to claim someone else's tax refund, Social Security benefits, and so on. He says members around the country have been contacting his organization to express their discontent with the situation. "It's a large agency that all Americans rely on and have paid for the operation and benefits of from their first paycheck onwards," says Fiesta. "There's a lot of concern and heightened anxiety of the preservation and security of personal data." SSA did not immediately respond to a request for comment. In the aftermath of the initial uproar last week, Dudek recently released a statement saying that DOGE will not disrupt how the SSA works, and that if DOGE personnel violate the law, "they will be referred to the Department of Justice for possible prosecution." "Our continuing priority is paying beneficiaries the right amount at the right time, and providing other critical services people rely on from us," he said. "DOGE personnel CANNOT make changes to agency systems, benefit payments, or other information. They only have READ access." Advocates are worried about potential changes to benefit payments because 37.3% of older adults would have incomes below the poverty level without their monthly Social Security checks, according to the Center on Budget and Policy Priorities. All together, 22.0 million adults and children would fall below the poverty line without Social Security. Any disruption in benefits could be detrimental, says Fiesta. Despite President Donald Trump's assurances that Social Security "won't be touched" by Musk and DOGE, advocates worry that the cost-slashing measures could harm the tens of millions of retirees and others who rely on the benefits to get by. Already, Musk has come under fire for falsely implying that millions of dead Americans are receiving benefits, an easily-disproven claim which the president has repeated. Meanwhile, Acting Commissioner Michelle King was replaced after reportedly refusing to provide Musk and DOGE access to the agency's data without proper documentation. Now embedded in the agency, the DOGE efforts have also led to the elimination of dozens of jobs and the scheduled closure of at least 10 local SSA offices. These closures, advocates say, could prevent some of the neediest people in the country from accessing their benefits; many people go to the offices to receive in-person help navigating the often complex system. That includes retirees, but also disabled adults and surviving spouses and children. One of the offices scheduled to be closed, for example, is a hearing office located in White Plains, New York, in the lower Hudson Valley. Hearing offices allow those who were denied eligibility for Social Security Disability Insurance or Supplemental Security Income (SSI) to appeal their case, and many end up receiving benefits. According to Sen. Kirsten Gillibrand, D-N.Y., that office is the only one that services seven counties in the region, and has approximately 2,000 cases pending. If it is closed down, Gillibrand says, beneficiaries will need to travel between 24 and 135 miles to receive service—made all the more difficult by the fact that many are elderly or disabled. Fiesta points out that SSA has already been understaffed for decades, with the long wait times for even basic services to prove it. This is the exact wrong time, he says, to further cut staff and resources. "We have more beneficiaries and applicants than ever before because we are at the height of the baby boom entering their mid 60s, and we have the lowest staff levels in a generation," Fiesta says. "They are coming in and making it less efficient as more people come in and rely on the system." White House Press Secretary Karoline Leavitt, after repeating the false assertion that millions of dead people are receiving benefits, said last week that "fake news reporters" are "fearmongering" about Social Security, and that DOGE is focused on eliminating fraud and waste in the program. More than 73 million people received Social Security or SSI payments in January, including 54.5 million retirees. Fiesta is encouraging retirees and other beneficiaries to be proactive about checking their payments each month going forward, as well as credit reports. "We're telling our members to check every month that it's there and it's the right amount, just to make sure," he says. "Be vigilant." This story was originally featured on
