The federal government has launched a large-scale audit and investigation into Social Security payments, relied upon by the vast majority of Korean-American seniors and retirees, starting this month. The aim is to recover overpayments made due to errors or fraudulent claims.

According to reports from The New York Times (NYT) and The Wall Street Journal (WSJ) on July 14, the Social Security Administration (SSA) began auditing Social Security benefits for overpayments in April. This action aligns with the Trump administration’s directive to reduce federal spending and eliminate wasteful budget practices.

The SSA plans to recover overpaid benefits by reducing monthly Social Security payments by up to 50% for affected recipients. Media outlets report that many beneficiaries have already been notified of these recovery plans, causing significant financial strain. This recovery effort is part of the U.S. Treasury’s “Treasury Offset Program” (TOP), which deducts 50% of monthly payments not only from Social Security but also from other federal benefits until overpaid amounts are fully repaid.

Overpayment recovery, temporarily halted during the COVID-19 pandemic, resumed two years ago with a 10% monthly deduction cap. In March, the SSA proposed a stringent 100% deduction policy but scaled it back to 50% due to public backlash. The SSA began sending overpayment notices on April 25, with actual deductions starting this month.

SSA Commissioner Lee Dudek emphasized, “We are committed to accountability for taxpayers’ money, and this is a critical step to maintain the integrity of the system.”Federal government reports indicate that overpayments typically result from unreported income changes, eligibility errors, miscalculations, or fraudulent applications. Between 2015 and 2021, approximately $72 billion in overpayments occurred due to errors or fraud, with $23 billion still unrecovered.

The SSA noted that recipients unable to repay can apply for installment plans, or request a waiver or appeal if the overpayment was not their fault. Experts warn that the recovery measures could impact millions of Social Security recipients nationwide, particularly vulnerable groups like retirees and disabled individuals reliant on fixed incomes, creating significant financial burdens. Residents needing assistance can check procedures at local SSA offices or the official website (ssa.gov).Additionally, the SSA does not pay Social Security benefits for the month of a recipient’s death and seeks to recover any such payments already made. Despite efforts to improve federal systems, payments are often issued to deceased recipients before recovery, causing frustration among spouses and survivors.

However, the SSA provides a one-time $250 “death benefit” to the spouse of a deceased Social Security recipient for the month of death. Social Security benefits can be claimed as early as age 62, with “full benefits” available at age 67. Payments increase annually if delayed from age 67 to 70, but no additional increases apply after age 70. Thus, it is recommended to begin receiving benefits no later than age 70.