By David Hilzenrath and Jodie Fleischer, Cox Media Group and KFF Health News

The Social Security Administration is backing off a plan it announced in March to withhold 100% of many beneficiaries’ monthly payments to claw back money the government had allegedly overpaid them.

Instead, the agency will default to withholding 50% of old-age, survivors, and disability insurance benefits, the agency said in an “emergency message” to staff dated April 25.

The agency long made it a routine to halt benefits to recoup billions of dollars it sent recipients but later said they should not have received. A policy under the Joe Biden administration to provide relief to beneficiaries, who often live on the fringe of poverty, last year had capped the clawbacks at 10%.

The partial reversal is another twist in the Trump administration’s tumultuous approach to Social Security, which has included staff cuts and the acting commissioner’s threat, which has since been withdrawn, to essentially shut down the agency.

The emergency message involves the agency’s practice of paying beneficiaries money they were not supposed to receive — and then, often after years have passed and the amounts have ballooned to tens of thousands of dollars or more per person — demanding the money back, even if the overpayment was Social Security’s fault.

In many cases, recovering the money had entailed withholding 100% of monthly benefits.

Millions of beneficiaries, including people struggling to get by on monthly checks, have received overpayment notices, a 2023 investigation by KFF Health News and Cox Media Group found. Clawbacks have left some homeless, the news organizations reported.

In the aftermath of that reporting, Martin O’Malley, tapped by President Joe Biden in 2023 to head the agency, sought to end what he described as “grave injustices” that left people “in dire financial straits.”

In March 2024, O’Malley said the agency would stop “that clawback cruelty” of intercepting 100% of a beneficiary’s monthly check if they fail to respond to a demand for repayment. Instead, the agency would default to withholding 10% of the recipient’s monthly benefits, he said.

A year later, the Trump administration reversed that policy change, returning to 100% withholding for new overpayments. “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,” acting Commissioner Lee Dudek said in a March news release.

Now, in a pattern that has played out on multiple fronts during the first 100 days of President Donald Trump’s second term, the administration is partly reversing the reversal.

This time, it issued no news release.

“I think that we had the policy right before,” O’Malley said in an interview April 28. “We looked at the various break points, and if you would depend entirely on your Social Security check, having half of it interrupted means what? That means you go without paying your heating bill for the month; that means you’d go without your medicine instead of buying medicine and food.”

“So it was a cruelhearted policy before,” he added. At 50%, “it’s half as cruel, but it’s still cruel.”

Withholding even 50% of monthly benefits will “cause hardship for many older and disabled people,” said Kathleen Romig, who worked at the Social Security Administration under O’Malley and is now director of Social Security and disability policy at the Center on Budget and Policy Priorities. “Going without half a Social Security check would make it harder for many people to afford basic needs like housing, food, and health care,” Romig said.

The SSA press office did not respond to questions for this article.

The emergency message to SSA staff said the new policy applies to overpayment notices sent on or after April 25. In one place, the message said the new withholding rate will be “up to 50 percent.” If the recipient does not request a lower rate of withholding, reconsideration, or a waiver — and “if there is no fraud or similar fault” — the agency will begin cutting their benefit payment after about 90 days, it said.

That does not apply to withholding of benefits in the Supplemental Security Income program, which serves people who have disabilities and older adults who have little or no income or resources, as the SSA explains. The agency said in March that withholding of SSI benefits would remain capped at 10%.

Kate Lang, director of federal income security at the advocacy group Justice in Aging, welcomed the shift from 100% withholding but said she was disappointed the agency didn’t revert to 10%. Lang called the agency’s conduct “chaotic and confusing.”

“It creates more work for SSA — more people calling with questions, more errors being made that need to be corrected, more confusion and uncertainty about what is going on,” Lang said.

“It’s a nightmare,” O’Malley said, “for not only the staff to have all of the switcheroo on policy, but also for the beneficiaries.”

©2025 KFF Health News. Distributed by Tribune Content Agency, LLC.