The lives of millions of retired citizens in America depend on Social Security. It is not only a source of income for them, but also the basis for living in old age. But now the alarm bells have rung for more than 10 lakh elderly people.
Due to some rules introduced during the Trump government, now the Social Security Administration (SSA) is going to deduct money from their monthly check. There are two reasons for this – recovery of old student loans and refund of overpayments (amount given more by mistake) made by SSA.
Let us understand in detail what this decision is, who will be affected and how it can be avoided.
What Has Changed in Social Security?
During Donald Trump’s tenure, some policies were implemented in the name of reducing expenses and increasing efficiency in government departments. Two of these policies are now being implemented:
- Deduction of money from the pension of those who default on federal student loans
- Recovery of overpayments made by SSA
Due to both these policies, thousands of elderly people may lose a large part of their monthly pension.
Deduction from Pension Due to Student Loan
From July 24, 2025, SSA will start deducting up to 15% from the Social Security of those elderly who have federal student loan dues.
- This will directly affect about 4.5 lakh elderly people.
- Many elderly people had taken this loan not for their own education, but for their children or grandchildren.
- Some people had just co-signed i.e. guaranteed for someone else, but now recovery is being done from them.
Example:
If an elderly person gets Social Security of $1,200 (about ₹1 lakh), then 15% i.e. $180 will be deducted and they will get only $1,020.
Recovery of $23 Billion in Overpayments
The SSA has mistakenly overpaid many beneficiaries over the years. These mistakes are often due to:
- Someone’s income changed but was not updated in the records
- Someone bought a new house, got married or some other circumstance changed, but did not inform the SSA
- Clerical error by SSA employees
Now the SSA is working on a plan to recover these overpayments by deducting up to 50% from the monthly pension.
For example:
| Monthly Pension | 50% Deduction | Remaining Amount |
|---|---|---|
| $1,600 | $800 | $800 |
| $1,200 | $600 | $600 |
| $900 | $450 | $450 |
Imagine that all the expenses of an elderly person’s medicines, rent and food are met from this pension. Now if half of it is cut, how will they survive?
What Can You Do?
If you received a notice from the SSA saying money will be deducted from your pension, you can get relief in three ways:
1. Apply for a Waiver (Form SSA-632)
- If you have made no mistake and paying back the money would make your financial situation worse, you can ask for a full waiver.
- With this form, you will need to provide a full description of your income, expenses, and hardship.
- If the SSA believes that paying back the money would affect your food or housing arrangements, it may be waived.
2. Appeal (Form SSA-561)
- If you do not agree with the amount or reason for the overpayment stated by the SSA, you can appeal.
- With this form, you can say that the payment was not made in error or that you were not aware of it.
3. Request a Lower Deduction (Form SSA-634)
- If you believe that the money was received by mistake but you cannot afford a 50% deduction, you can ask for a lower monthly deduction.
- The SSA can review your situation and decide on a deduction of 10%, 20% or any other deduction that is feasible for you.
Read more: KTM Duke 2025 Launched with Design and Next-Gen Features
Why Is This Important?
According to a survey, 86% of the retired citizens of America are dependent on Social Security in some form or the other. In such a situation, if half of their pension is deducted, then it becomes not just a small blow but a serious financial crisis.
There are many people with whom SSA made this mistake and now they are also being charged for the recovery.
What Should You Do Now?
- Read the notice sent by SSA carefully
- Keep a record of your income and expenses ready
- Fill in the form mentioned above whichever you think is correct
- The last date for submitting the form is July 24, 2025. Apply before that
If you submit the form on time, SSA will not deduct money from your pension until your appeal is settled.
FAQs (Frequently Asked Questions)
Q1. Why is SSA deducting money from Social Security?
Under a Trump administration policy, SSA is now recovering money from people who were mistakenly overpaid or who have outstanding student loans.
Q2. Can I avoid this deduction?
Yes, you can ask for a full waiver, appeal or reduced deduction by filling out the SSA-632, SSA-561 or SSA-634 form.
Q3. Will this apply to every pensioner?
No, only those who owe SSA overpayments or are student loan defaulters.
Q4. How do I know if I’m affected?
The SSA will send you a notice by mail. You must respond within 90 days of receiving the notice.
Conclusion
Social Security is the lifeline of America’s seniors. Policies that put their lives in jeopardy are a very serious matter. If you or someone you know may be affected by this policy, take immediate action. Timely action can save you from unnecessary cuts.