Social Security never tried to withhold benefits from 48 of the 175 people its own inspector general sampled, even though they owed overpayments from benefits paid to them as children. Those 48 debts add up to $216,373. The agency’s September 2026 audit, Overpayments to Children, projects the same gap across everyone selected for a tax refund offset at about $242.6 million.
How the auditors found the gap
The inspector general started with 249,227 people who had been selected for a Treasury tax refund offset as of September 2025. That is the program that lets the government take an overpayment out of a federal tax refund. From that group, auditors drew a sample of 175 people.
Of the 175, 121 were handled according to Social Security policy. The other 54, or 31 percent, were not. Those 54 cases carry $227,012 in overpaid benefits that had not been resolved.
In 48 of the 54 cases, no one attempted to withhold money from the person’s benefits, and those overpayments total $216,373. In the other six, benefit records were not updated or were miscoded, and those debts total $10,639. The people at the center of this are former child beneficiaries who owe the money back and who have since started drawing benefits of their own.
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These are old debts. The overpayments are for child’s insurance benefits paid under the Old-Age, Survivors and Disability Insurance program, money a child received years ago. The findings concern collection of those debts, not a change to what any beneficiary is paid today.
Collection did happen in some cases. As of June 2026, Social Security had received $53,651 through tax refund offsets that partly or fully repaid the overpayments of 34 of the 175 sampled people. The auditors’ concern is the 48 people for whom a second tool, withholding from monthly benefits, was never tried.
Sample counts and the projected total are different numbers
The 48 people and the $216,373 are counts from the 175-person sample. They are not totals for the program, and they should not be read as the size of the problem nationwide.
For the full group, the inspector general projects that about 76,904 individuals had overpayments that were not resolved under policy, worth about $242.6 million. At a 90 percent confidence level, the number of people could be as low as 62,575 or as high as 92,462. The projected dollar range runs from about $160 million to about $325 million.
The $242.6 million figure includes one outlier case of $57,676. Auditors left that case out of the projection and added it back at its actual value, which brings the point estimate of $242,546,929 to a total of $242,604,605. A projection is an estimate with a range, not a tally of confirmed unpaid debts.
What Social Security’s own rules require
Agency policy says that when an overpaid person is receiving a benefit, Social Security withholds part of the monthly payment to repay the debt. The inspector general cites the agency’s operating manual, section GN 02210.001 of the Program Operations Manual System, for that rule.
The rules also say when to switch tools. If an overpaid person, or someone in the same household who is contingently liable for the debt, starts receiving benefits, Social Security should stop the tax refund offset and withhold from benefits instead. If a contingently liable person in a separate household starts receiving benefits and the overpayment exceeds $20,000, withholding is required.
The order of those tools matters. A tax refund arrives once a year, and only if one is due, while a benefit payment arrives every month. A debt left to the refund offset alone depends on a refund showing up.
The inspector general made five recommendations, and Social Security agreed with all five. The September 30 memo asks the agency to provide within 60 days a corrective action plan that addresses each one.
Where a withheld dollar would show up
The size of the monthly check matters, because withholding takes part of it. Social Security’s 2027 fact sheet puts the average retired worker’s benefit at $2,095 a month now and $2,170 after the 3.6 percent cost-of-living increase that begins in January.
Beneficiaries will see any deductions spelled out. Social Security’s October 14 announcement says the one-page 2027 cost-of-living notice lists exact dates and dollar amounts, including any deductions. Account holders can see it online in late November, and paper notices go out in December.
The inspector general’s report does not say how many of the 76,904 projected people now receive benefits that withholding could reach. That count decides how much of the $242.6 million is within reach. Anyone who has received a notice about an old childhood overpayment can ask Social Security through ssa.gov about the balance, whether a refund offset has been applied and whether benefits are being held back.
The open question for each of the 76,904 projected people is whether anyone ever attempted that second step.
Holding a notice about a childhood overpayment?
The sample shows the debts are real and the collection effort uneven: $53,651 came in through refund offsets for 34 of the 175 people, while 48 others never faced withholding at all. A notice about an old childhood overpayment can reach a tax refund, and waiting for the agency to fix its own gaps leaves the response window running.
The Social Security Check Protection Kit puts the three SSA forms that stop or pause collection (SSA-561, SSA-632, SSA-634) in one place, along with an overpayment response worksheet. Part 5, Overpayments: The Full Playbook, walks through a notice step by step.
Get the 30-day overpayment response steps from the check protection kit →
More Financial Reading
- 21 Ways to Stretch a $2,087 Social Security Check
- 15 Places to Find Your Share of the $4.25 Billion States Give Back
- 15 Steps to Stop the Scams That Took $7.7 Billion From Seniors
This article was produced with AI assistance and edited for accuracy against the sources linked above.
