A Sept. 30, 2025 audit by the Social Security Administration’s Office of the Inspector General estimates that the agency overstated by about $904 million the overpayments it recovered through benefit withholding in fiscal years 2022 and 2023. SSA’s annual financial reports for those years said it had recovered more than $5 billion, and the auditors estimate it actually collected $4.1 billion, a shortfall of 18 percent. Acting Inspector General Michelle L. Anderson sent the report, “Processing Old-Age, Survivors, and Disability Insurance Overpayments”, to Commissioner Frank Bisignano.
The audit is 13 months old, but its findings reach people who are dealing with an overpayment notice now. Anyone whose benefit is being held back, or who has asked for a waiver or a reconsideration and is still waiting, is in the group the auditors examined. The question for those beneficiaries is whether the amount on the notice, and the recovery recorded against it, is correct.
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More than $5 billion reported, an estimated $4.1 billion collected
The auditors found that SSA’s records did not show what was recovered through benefit withholding. In a random sample of 200 overpayments, the recovery data was wrong for 24, or 12 percent of the sample, and those 24 totaled almost $316,000. Projected across all beneficiary segments, the report estimates the recovery status was incorrect for nearly 119,000 overpayments totaling over $922 million.
That estimate includes about $904 million in recoveries that were recorded but did not happen and $18 million in recoveries SSA did not record. The report says SSA’s systems “reflected overpayments as recovered by benefit withholding when they were not.” The two annual reports for fiscal 2022 and 2023 had said more than $5 billion was recovered.
37 of 200 sampled overpayments were mishandled
The audit set out to learn whether SSA followed policy and used its available tools when it processed overpayments in Old-Age, Survivors and Disability Insurance. Auditors drew a sample of 200 from 49,484 overpayments established between Oct. 1, 2021 and Sept. 30, 2023 in one segment holding 5 percent of beneficiaries. Overpayments of $1,000 or less were left out.
SSA either did not use available tools or processed 37 of the 200 incorrectly. Applied to all 20 segments, the report estimates about 183,100 of roughly 989,680 overpayments, or 18.5 percent, were processed incorrectly or could have been processed sooner, with error amounts over $612 million.
- Recovered although not owed: more than 20,000 overpayments, about $196 million
- Calculated incorrectly: nearly 35,000, about $245 million
- Collected later than it could have been: more than 40,000, over $122 million
- Recovery started during a due-process period: more than 29,000, about $49 million
Nearly 15,000 more overpayments were set up in error and later removed.
Waiver requests took 6 to 31 months to decide
Among the sampled cases, 17 requests for an explanation, a reconsideration or a waiver took SSA between 6 and 31 months to decide. The report ties the delays to a policy gap, since SSA did not require a decision within a set time frame. Nearly 44,000 overpayments had a request pending when the audit was done, and nine of the sampled requests were still pending in November 2024.
In six sampled cases, employees did not record that a request was pending. The system began taking money anyway, and SSA collected more than $10,000 that policy said it should not have.
SSA agreed to all five recommendations
The inspector general asked SSA to resolve the 37 incorrectly processed overpayments in the sample, set up controls so employees process overpayments accurately, and improve its systems to cut inaccurate overpayments. The auditors also asked for a policy that requires staff to decide explanation, reconsideration and waiver requests within a set time, and for system and procedure changes so the recovery report shows correct figures for the annual financial report. SSA agreed to implement the recommendations.
The report does not say when each change would be finished.
Withholding waits 30 days, and a request in that window pauses it
SSA’s page on resolving an overpayment says the agency automatically withholds 50 percent of a benefit, or 10 percent of an SSI payment, each month until the overpayment is repaid. It waits at least 30 days after sending the notice before it starts to collect. Under the same page, a waiver or appeal requested within 30 days stops collection until SSA decides the request.
The page says an appeal should be filed only for someone who disagrees with the amount of the overpayment. A waiver is a different request, and the audit’s numbers show why a written record of what was asked and when matters.
Is the overpayment on the notice the amount SSA is really owed?
The audit found that an estimated 18.5 percent of overpayments in the sample were processed incorrectly or late, and that money was taken while requests sat unrecorded. A beneficiary holding a notice has a narrow window, and a missed step can start the withholding.
“The Social Security Check Protection Kit” is a 75-page guide that includes the three SSA forms that stop or pause collection (SSA-561, SSA-632, SSA-634) and an overpayment response worksheet. Part 5 is the full overpayment playbook, built for a reader who has to choose between a waiver and an appeal.
This article was produced with AI assistance and edited for accuracy against the sources linked above.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
