Social Security Administration makes another concerning announcement

Social Security is a lifeline for many retired and disabled Americans, making it possible for older adults to continue to pay their bills.

While many choose careers that allow them to save for retirement with a 401(k),  other fields do not offer such perks, and employees in these fields often rely on Social Security in their later years.

💰💸 Don’t miss the move: SIGN UP for TheStreet’s FREE Daily newsletter 💰💸

An enormous number of people currently rely on Social Security — an average of nearly 69 million Americans in 2025, according to the Social Security Administration. That totals up to about $1.6 trillion in benefits paid during the year.

Since President Trump was elected for his second term, Social Security has been under fire, with many fearing that the administration will make devastating changes to Social Security that could leave millions struggling to survive.

The Social Security Administration (SSA) made an announcement in February that it intended to lay off 7,000 employees to “reduce the size of its bloated workforce and organizational structure,” leaving many concerned about what might come next.

Related: Shark Tank’s Kevin O’Leary sends strong message on Social Security

A March 7 announcement from the administration that it would reinstate the overpayment recovery rate also left millions reeling, as it stated it would increase the default overpayment withholding rate for Social Security beneficiaries to 100 percent of a person’s monthly benefit. The SSA stated that the change would generate about $7 billion in program savings over the next 10 years.

Now there’s a new update, and while it seems like an improvement on the prior ones, there’s still plenty for those who rely on Social Security to be concerned about.

Those who rely on Social Security may face difficult circumstances in the future.

Image source: Getty Images

Social Security announces exceptions

The SSA has announced in an emergency message that certain beneficiaries will see the withholding rate cut to 50 percent instead of the previously announced 100 percent.

The changes will affect Title II benefits, which include retirement, survivors, and disability insurance, and were effective as of April 25, 2025.

Related: Dave Ramsey bluntly warns Americans about Social Security

Previously, during Joe Biden’s time in office, the default withholding rate was lowered to 10% of a beneficiary’s monthly benefit or $10, whichever amount was greater.

The withholding rate for Supplemental Security Income benefits remains 10%.

What causes overpayments to happen

Considering the high penalty many are now forced to pay if an overpayment happens, it’s no surprise that many are worried about how it happens in the first place.

It’s one of the reasons it’s important to look carefully at your SSA paperwork and make sure you’re diligent about keeping things up to date.

One of the reasons that overpayment can happen is if a beneficiary has a change in circumstances and fails to report it to the agency. 

Another possibility is that the agency has errors in its data, or does not process information in a prompt manner. 

Should you be affected by an overpayment situation, it’s important to know your options. Beneficiaries are able to request a lower rate of withholding, a reconsideration, or a waiver of recovery within a 90-day period. 

However, if you miss this window, the SSA will withhold up to 50% of a beneficiary’s benefits until the overpaid amount has been paid off.

Related: White House will make surprising changes to Social Security payments soon