One of the most concerning issues for Social Security (SSA) payment recipients in the United States has been the threat of cuts to their checks. Millions of retirees and people with disabilities depend on these benefits to cover essential expenses such as housing and food. Any reduction in their monthly income could compromise their financial stability, especially when many don't have other sources of income.
Concerns about possible garnishments intensified under the Biden administration, which implemented changes that directly affected monthly payments. However, as the Trump administration takes the reins, the concern is waning. Now, the goal is to limit these cuts and ensure that citizens don't lose a significant portion of their benefits.
These are the cuts Social Security has suffered
One of the key factors that caused anxiety among recipients was the increase in the overpayment recovery rate under the Trump administration. Instead of a 10% or $10 limit as was implemented during the Biden administration, a 50% recovery rate was established. This rate, which could reach 100%, means that recipients would lose a portion of their checks if SSA made a mistake or the recipient received overpayments.
"Obviously, it's better not to lose all your income," said Kate Lang, director of federal income security at Justice in Aging. "If you depend on your benefits to pay rent or a mortgage and buy food, losing half of that income will be devastating and will cause people to become homeless."
The impact of garnishments on student loans
At the end of April, the Trump administration announced the resumption of federal student loan collections, which had been suspended for almost five years due to the COVID-19 pandemic. Now, with the suspension lifted, those in default could see up to 15% of their checks garnished, a situation that affects hundreds of thousands of recipients over 62 years old (62 años).
The country faces a federal student loan debt that exceeds $1.6 trillion (1,6 billones de dólares). Approximately 425,000 borrowers in default receive Social Security benefits, which means that a significant portion of them could lose a large part of their monthly checks. However, many of these recipients may qualify for the hardship exemption, which would allow them to avoid this garnishment.
How to request the overpayment recovery exemption
If a recipient receives an overpayment notice, they have options to avoid having a significant portion of their check recovered. SSA allows recipients to request a withholding exemption if they submit documentation within 90 days of the notice. If the overpayment was caused by SSA, the recipient could obtain the exemption from the withholding of their benefits.
Otherwise, recipients can appeal the overpayment notice or request a change in the recovery rate if the 50% withholding is a significant financial burden. In any case, it's essential for recipients to keep themselves informed and act quickly to protect their income.