This month, some Social Security beneficiaries may see reduced payments, meaning some retirees will receive less money. If you qualify for retirement benefits, it’s important to understand the reasons why your payments might decrease, as this will affect your monthly budget. Knowing these reasons can help you better plan your finances. Key factors that could lead to reduced Social Security checks include federal or creditor debts, overpayments, Medicare payments, and Social Security funding shortages, which will be discussed below.
Reasons for Reduced Social Security Checks in August
Federal Debts
If you have an outstanding federal tax liability, your Social Security checks could be reduced. The Internal Revenue Service (IRS) can withhold up to 15% of your Social Security benefits to cover unpaid tax debts. You can also choose to have a portion of your monthly payments withheld to pay off any owed taxes.
Debts to Other Creditors
Creditors may garnish your Social Security payments under certain circumstances, such as delinquent child support, federal student loans, and court-ordered restitution. However, Supplemental Security Income (SSI) benefits are exempt from garnishment, and private education loans cannot be deducted from your Social Security benefits.
Recovering Overpayments
Overpayment recovery is a common reason for payment reductions. If you received overpayments from the Social Security Administration (SSA) or another federal agency, you could request an administrative adjustment to recover them. This frequently happens with SSI overpayments. The SSA also has the authority to deduct these overpayments from your tax refunds or future benefits.
Medicare Part B Premiums
Enrollment in Medicare Part B can also reduce your Social Security benefits. If you have Medicare Part B, your Social Security check is automatically reduced by the premium amount. If your Medicare Part B premiums exceed the Social Security cost-of-living adjustment (COLA), your monthly benefit may be lower. This situation is more likely in years when the COLA is low or nonexistent, such as in 2009, 2010, and 2015.
Social Security Trust Funding Shortages
Although it hasn’t happened yet, future reductions in Social Security checks could occur due to funding shortages. The Congressional Budget Office projects that the Social Security Trust Fund will be depleted by 2033. If no action is taken, benefits could be reduced by 25% starting in 2034. While measures can be implemented to protect benefits, some options may result in lower payments.
Average Monthly Income for Beneficiaries
Social Security beneficiaries receive different payment amounts based on the program they qualify for and other factors, such as full retirement age (FRA), work history, contributions to the system, and type of disability, especially for those receiving Social Security Disability Insurance (SSDI). On average, retired workers receive up to $1,900, survivors $1,505, disabled individuals $1,537, and SSI recipients up to $698. However, these are only the average payments, as higher maximum Social Security checks are available for beneficiaries. The table below outlines the approved payment amounts for each program this year:
| Social Security Checks | Retirement Benefits | Survivors Benefits | Disability Benefits | SSI Benefits |
|---|---|---|---|---|
| On Average | $1,900 | $1,505 | $1,537 | $698 |
| Other Payments | Age 62: $2,710 | Individual: $1,773 | Blind Recipients: $2,590 | Individuals: $943 |
| Age 67: $3,822 | 2 Children: $3,653 | Maximum Payment: $3,822 | Couples: $1,415 | |
| Age 70: $4,873 | Essential Person: $472 |
Note that August includes an additional payment for recipients from the Supplemental Security Income (SSI) program. In August, SSI recipients will receive $1,886 for individuals, $2,830 for couples, and $944 for those who qualify as essential persons (EP).
