Social Security is a financial lifeline for millions of retirees, helping them cover everyday expenses like food, rent, and medical bills. But beginning July 24, 2025, many Social Security recipients could see a significant reduction in their monthly payments—some by as much as 50%.
The Social Security Administration (SSA) is ramping up efforts to recover overpayments and federal student loan debts—initiatives tied to past policy changes made under former President Donald Trump’s administration. These changes are expected to affect over 1 million older Americans, many of whom live on fixed incomes.
5 Mistakes That Could Cut Your Social Security Benefits
To avoid seeing a sharp drop in your monthly benefits, it’s essential to understand what actions—or inactions—could trigger a loss. Here are five common mistakes that could reduce your Social Security payments and how to avoid them.
Failing to Handle Defaulted Federal Student Loans
Beginning in summer 2025, the government will restart garnishing up to 15% of monthly Social Security checks from those who are behind on federal student loans. This change will impact over 452,000 retirees—many of whom borrowed money decades ago for their own or their children’s education.
What to Do:
If your loans are in default, don’t wait. Look into:
- Loan consolidation
- Income-driven repayment plans
- Deferment or forbearance options
Ignoring the problem could lead to automatic deductions from your monthly check.
Not Reporting Income or Life Changes to the SSA
The SSA is working to recover $23 billion in overpayments, and nearly 2 million people may be affected. One of the main causes? Beneficiaries not reporting changes in income, marital status, or dependent eligibility—or sometimes, SSA’s own administrative mistakes.
What to Do:
Report any changes immediately:
- Got a new job or part-time income? Report it.
- Got married, divorced, or widowed? Report it.
- A dependent child is no longer eligible? Let SSA know.
If you don’t, and the SSA later identifies an overpayment, they can legally reclaim the money—even if it was their fault.
Ignoring Overpayment Notices or Missing Deadlines
If the SSA believes you were overpaid, they will send a written notice. Many recipients make the mistake of ignoring these notices, assuming the issue will resolve itself. It won’t.
Starting July 24, 2025, the SSA will increase its deduction rate from 10% to 50% of monthly benefits when recovering overpayments.
What to Do:
If you receive a notice:
- Respond within 90 days
- Request a waiver, file an appeal, or arrange a repayment plan
Doing nothing allows the SSA to automatically begin withholding half of your check.
Not Requesting a Waiver If You’re Not at Fault
Many overpayments occur without the beneficiary even knowing—due to SSA errors or unclear updates. If this happens to you, you may qualify for a waiver, which forgives part or all of the amount owed.
What to Do:
Fill out Form SSA-632-BK to request a waiver.
You’ll need to prove:
- You weren’t at fault
- Repayment would cause financial hardship
Skipping this step might mean you’ll repay money you technically don’t owe.
Not Appealing When You Disagree With SSA’s Decision
If you think the SSA made a mistake—maybe the overpayment amount is wrong or you never received it—you have the right to appeal. But if you miss the deadline, SSA will still move forward with benefit cuts.
What to Do:
Use Form SSA-561 to request reconsideration. You can explain your case, submit evidence, and challenge the overpayment.
Appealing promptly is the only way to stop the process before your check gets reduced.
Final Warning: Act Before July 24, 2025
The SSA will begin enforcing the new 50% withholding rule at the end of July 2025. If you’re currently receiving benefits, addressing potential issues before this date could save you hundreds of dollars each month.
Stay proactive. Stay informed. Review your Social Security communications, check for notices, and take immediate action if anything looks off.
