‘Clawback cruelty’: Social security goes after overpayments, reversing Biden policy
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Senate Budget Committee vice-chair Patty Murray talking about Social Security during a news conference on March 3.
PHOTO: AFP
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NEW YORK – The US Social Security Administration will resume withholding full benefits from senior citizens who have received overpayments, reversing a Biden policy, in an effort to recoup US$7 billion (S$9.31 billion) over the next decade.
Critics say it is a return to the policy they called “clawback cruelty”, because many of the overpayments were mistakes by the government and resulted in seniors being unable to pay bills when their benefits were suddenly reduced to zero.
Under the Biden administration in 2024, the agency reduced the amount of overpayments that Social Security would recoup to just 10 per cent of any one pay cheque.
“We have the significant responsibility to be good stewards of the trust funds for the American people,” acting Social Security commissioner Leland Dudek said in a statement late on March 7. “It is our duty to revise the overpayment repayment policy back to full withholding, as it was during the Obama administration and first Trump administration, to properly safeguard taxpayer funds.”
The policy shift comes as the old-age and disability benefit agency comes under scrutiny from President Donald Trump and his billionaire adviser Elon Musk, who have demanded deep job cuts at the agency.
“We’re also identifying shocking levels of incompetence and probable fraud in the Social Security programme for our seniors and that our seniors and people that we love rely on,” Mr Trump said in a speech to Congress on March 4.
He also claimed erroneously that millions of dead people were receiving benefits. The Social Security administration said that missing death dates in a database of Social Security numbers does not mean dead people are receiving benefits.
Former Social Security commissioner Martin O’Malley said deep cuts to the agency make improper payments to beneficiaries more likely, and harder to discover.
“So now this return to the 100 per cent interruption and clawback of a beneficiary’s monthly payments will inflict dire financial hardship on greater numbers of innocent seniors who depend entirely on their monthly Social Security benefit to survive,” he added.
The Social Security Administration recovered US$4.9 billion in overpaid benefits in 2024, according to a report to Congress. Another US$10.3 billion was scheduled for repayment.
But the Social Security commissioner can also waive repayments if the beneficiary was not at fault and collecting them would be “against equity and good conscience”. Those waivers amounted to US$302 million in 2024.
The overpayment recovery rate will remain at 10 per cent for beneficiaries of the Supplemental Security Income programme, which provides payments to people with disabilities. The change goes into effect with benefits cheques beginning on March 27. BLOOMBERG
