A new report from the Social Security Administration’s (SSA’s) Office of Inspector General (OIG) confirms that SSA often spends more money pursuing certain low-dollar overpayments than it ultimately recovers. The audit, issued in May 2026, highlights inefficiencies in the agency’s overpayment collection practices and raises questions about the value of pursuing aggressive recovery efforts against beneficiaries who owe relatively small amounts.
The OIG reviewed a sample of 250 low-dollar Title II overpayments and found that in 20 percent of the cases reviewed, SSA’s collection efforts were not cost-beneficial. In these cases, the resources devoted to processing and collecting the overpayments likely exceeded the amounts owed. Auditors also found instances in which SSA issued more notices than required under agency policy, further increasing administrative costs.
For the 50 overpayments identified as not cost-beneficial, SSA spent an estimated $14,492 attempting to recover debts totaling just $8,129. Extrapolating those findings to the broader population of Title II beneficiaries, the OIG estimated SSA spent approximately $4.6 million pursuing nearly 16,000 low-dollar overpayments totaling about $2.6 million. In other words, the agency may have spent $2 million more in collection efforts than it could expect to recover.
The report revisits deficiencies identified in a prior July 2015 OIG audit, after which SSA agreed to develop a cost-efficiency tracking system to identify when pursuing overpayment recovery is not economically justified. Although SSA maintained such a system for Supplemental Security Income (SSI) overpayments, it never implemented a comparable system for Title II cases, citing resource limitations. The current audit found that SSA still lacks clear standards for determining when the collection costs are likely to exceed the amount recoverable and recommended that SSA standardize its cost calculations, address non-cost-beneficial cases, and establish criteria for suspending or terminating collection efforts.
The timing of the report is notable because it arrives one year after the agency returned to more aggressive Title II overpayment recovery practices. Under current policy, SSA generally recovers Title II overpayments by withholding up to 50 percent of a beneficiary’s monthly benefit payment.
As reported in our April 2026 issue, SSA adopted a default withholding rate of 50 percent for most new Title II overpayments issued on or after April 25, 2025. In August 2025, SSA issued Emergency Message (EM) 25029 REV, updating internal instructions related to implementation of the 50 percent withholding rate. The guidance followed a period of policy reversals earlier in the year. In March 2025, SSA announced that it would return to a 100 percent withholding rate for newly established Title II overpayments, effectively recovering the entire monthly benefit until the debt was satisfied. Weeks later, the agency reversed course and reinstated the 50 percent withholding rate through EM-25029.
Another OIG audit issued earlier this year identified broader staffing, workload, and service-delivery challenges currently faced by SSA. The OIG’s findings in the new report call into question whether the agency’s limited administrative resources are being used efficiently when pursuing small overpayments.
