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8 Things That Can Lower Your Monthly Social Security Payments

Medicare premiums, government pensions and other factors can reduce what you collect

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In Social Security parlance, “benefit” and “payment” are often used interchangeably, but they do not mean precisely the same thing.

Your benefit is the amount the Social Security Administration (SSA) calculates you are eligible to receive each month, based on your earnings history, claiming age and the type of benefit you get. Your payment is the amount of money that pings monthly into your bank account.

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There can be a considerable difference between the two, based on such factors as employment or Medicare status. Here are eight things that could cause dollars to be deducted from your benefit.

Medicare premiums

If you are collecting Social Security and enrolled in Medicare, premiums for Part B, the part of Medicare that covers doctor visits and other outpatient treatment, are automatically deducted from your monthly benefit payment.

Most people pay the “standard” Part B premium ($174.70 in 2024). Beneficiaries with higher incomes (over $103,000 a year for an individual taxpayer and $206,000 for a married couple filing jointly) are charged up to several hundred dollars a month more for Part B.

People who pay the standard rate are covered by “hold harmless,” a provision of Social Security law that prevents a beneficiary’s monthly payment from going down year to year due to an increase in Part B premiums. The provision does not apply to those paying the higher premium rates or to anyone in their first year of Medicare coverage.

Those who have Medicare Part C (Medicare Advantage) or Part D (prescription drug) plans may choose to pay those premiums directly out of their Social Security. Talk to your plan provider about billing options.


If you claim Social Security before your full retirement age, or FRA (currently between 66 and 67, depending on your year of birth), and continue to work, you are subject to the SSA’s “earnings test.” In the years before you reach your FRA, $1 is temporarily withheld from your benefit payment for every $2 you earn above an annually set cap.

In 2024, that cap is $22,320. Suppose you earn $30,000 from a part-time job. The difference between that and the earnings limit is $7,680, so $3,840 — half that amount — would be deducted from your benefits for the year.

In the calendar year you will reach FRA, the limit goes up (to $59,520 in 2024) and withholding goes down, to $1 for every $3 in earnings above the cap.

When you reach full retirement age, the earnings test ends and there is no withholding, no matter how much you earn. In addition, the SSA recalculates your benefit to a higher amount so that over time you are, in effect, repaid for the pre-FRA withholding.

Federal income taxes

Beneficiaries with incomes above $25,000 for a single taxpayer and $32,000 for a couple filing jointly may be liable for federal taxes on up to 85 percent of their Social Security income. As with work income, you can have federal taxes withheld from your monthly Social Security payment so you don’t have to pay it all at tax time.

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You can specify if you want federal tax withholding, and at what rate (7 percent, 10 percent, 12 percent or 22 percent), as part of your application for benefits, or later by filling out IRS Form W-4V and submitting it by mail or in person to your local Social Security office.

Several states tax Social Security income, but there is no mechanism for withholding state tax payments from your monthly benefits.

Government pension

As of December 2023, about 2.1 million Social Security recipients were covered by the Windfall Elimination Provision (WEP), a rule that can reduce retirement benefits or Social Security Disability Insurance (SSDI) payments for people who:

  • Collect a pension from a job in which they did not pay Social Security taxes.
  • Also qualify for Social Security based on other work in which they did pay into the system.

The WEP mainly affects people who worked for state or local government agencies that are not “covered” by Social Security (including many teachers, firefighters and police officers) and federal retirees who joined the U.S. government workforce before 1984. It can reduce a beneficiary’s Social Security payment by up to one-half the amount of their pension payment.

A similar rule, the Government Pension Offset (GPO), applies to people who receive Social Security spousal or survivor benefits as well as a “non-covered” government pension. The GPO benefit reduction can be as much as two-thirds of the pension amount.

Military retirement pay does not come under the WEP or GPO and does not affect Social Security benefit amounts.

Some kinds of debt

Social Security benefits cannot be garnished to pay commercial debt (such as your car loan or credit card bills) or seized in a bankruptcy proceeding. However, the federal government can withhold benefits for certain types of government-managed debt, including:

  • Back taxes. Up to 15 percent of your benefit can be withheld if you’re in arrears to the IRS.
  • Non-tax debt to federal agencies, such as student loans (although garnishment for most student loan defaults is on hold until at least September 2024 under the U.S. Department of Education's Fresh Start program). These deductions are also capped at 15 percent.
  • Court-ordered payments such as alimony, child support or restitution to crime victims. The terms of garnishment vary by state.
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Benefit overpayment

If Social Security determines that you received more than you were entitled to get in previous benefit payments, it may withhold up to 10 percent of your monthly benefit going forward to recoup the overpayment.

This most often occurs with Supplemental Security Income (SSI), an SSA-managed benefit for people with very low income and limited assets who are 65 or older, blind or have a disability. Eligibility and benefit amounts for SSI are subject to a complex set of rules and reporting requirements involving beneficiaries’ finances and living situation.

SSA officials told Congress in October that about 987,000 Social Security and SSI beneficiaries were sent overpayment notices in the 2023 federal fiscal year, which ended Sept. 30. Just over 1 million such notices were sent out the year before. 

The SSA publishes an overpayments fact sheet that details how benefits are withheld in such cases along with other repayment options and beneficiaries’ rights to appeal or seek a waiver of the debt.

Family maximum

Spousal and survivor benefits can be reduced by the family maximum benefit, a cap on how much a family can collectively receive from Social Security on the basis of one member’s earnings record.

Let’s say you’re getting retirement benefits and your spouse and kids qualify for benefits on your record. Social Security uses a formula to calculate the family maximum, which generally will be between 150 and 180 percent of your basic benefit — the amount you’re entitled to receive if you file at full retirement age.

If all the family’s benefits added together exceed that figure, your spouse’s and kids’ payments will be reduced in equal measure to meet the cap. Your own retirement benefit won’t be touched — the family maximum affects only auxiliary benefits paid on the primary earner’s record.

Workers’ compensation

If you are receiving both SSDI and workers’ compensation, Social Security may apply an “offset” that can reduce your disability benefit.

Under federal rules, workers’ comp and SSDI payments combined can’t amount to more than 80 percent of what Social Security determines to have been your average earnings before a disability stopped you from working. If they do, one or the other benefit will be reduced to get under the cap.

In most states, that will be your SSDI benefit, although some states have their own offset policies and reduce workers’ comp payments instead.

The same offset rules may apply if you are receiving another form of public disability benefit from a federal, state or local government. Veteran disability benefits, however, do not affect SSDI payments.

Andy Markowitz is a writer and editor for AARP, covering Social Security and fraud. He is a former editor of The Prague Post and Baltimore City Paper

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