The individuals who have established themselves as eligible for receiving Social Security benefits may witness a few delays or even reductions in their amounts this June 2025. This is because the Debt Collection Improvement Act has already been implemented. The act allows the Treasury Department to keep 15% of the amounts of those who have outstanding federal student loans. If you are someone who wants to know more about the possible delays and reductions, the following article is for you.
What Is The Debt Collection Improvement Act That Is Going To Affect Social Security?
The Debt Collection Improvement Act first came into effect back in 1996 and is now expected to affect the beneficiaries of Social Security. It allows the Treasury Department to withhold the amount to recover the student loan debts in default. This 15% reduction is going to affect around 450,000 American citizens who are above the age of 62.
The sources suggest that the measures to collect the federal student loans through Social Security are going to come into effect this month. This means many beneficiaries who are above the age of 62 and depend on the payment for their daily expenses will receive less.
Who Will Be Affected The Most By The Reduction In Social Security Payments?
According to the sources, the beneficiaries who have established themselves as eligible for receiving the payments but have outstanding federal student loans will be affected the most. For instance, those who receive benefits under Social Security Disability Insurance, Supplemental Security Income, and beneficiaries with active federal debt will witness a $296.40 reduction in their payments. This means all those beneficiaries with active federal loans are only going to receive $1679.6 instead of the usual $1,976.
Will There Be Any Delays In Social Security Payment Disbursement This Month?
The beneficiaries who are awaiting their Social Security payments this month will probably see a particular delay in June. The following is the payment schedule defined at the beginning of this year. Knowing the schedule beforehand will help you plan your expenses accordingly and know when there is an unforeseen delay in the payments.
- The payments for those who started receiving SSI payments before May 1997 were scheduled for issue on the 3rd of June.
- The payments for those who started receiving payments after May 1997 and have birth dates between 1-10 are scheduled on June 12.
- The payments for those who started receiving payments after May 1997 and have birth dates between 11 and 20 are scheduled for June 18. The payments for those who started receiving payments after May 1997 and have birth dates between 21-31 are scheduled on June 25.
What Can You Do To Avoid The Reductions In Social Security Benefits?
In case you are someone who has an outstanding federal loan and doesn’t know what to do to avoid the reductions in Social Security payments, don’t worry. The following are a few things you can try to avoid the 15% reduction in your Social Security payments.
- You can either pay the outstanding amount of your federal loan or agree on a payment plan instead with the Department of Education.
- You can also request the administration for a review or an exception if they find out the reduction is inappropriate during the review.
- You must switch to direct deposit as your preferred payment method.
- You must also check your My Social Security account for any new updates regarding the Social Security payments.
What To Do In Case You Face Unforeseen Delays In Social Security?
The Social Security Administration has laid out clear instructions to wait for at least 3 working days for the payment process. You must also check your My Social Security account for any notifications on possible delays. If the payment doesn’t reflect in your account within 3 days, you will have to contact the Social Security Administration and report the delay.
FAQs
1. Why are Social Security payments being reduced in June 2025?
Social Security payments are being reduced in June 2025 due to the implementation of the Debt Collection Improvement Act, which allows the U.S. Treasury Department to withhold up to 15% of monthly benefits from individuals who have defaulted federal student loans.
2. Who will be most affected by the Social Security reductions?
Individuals over the age of 62 who are receiving Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), or regular retirement benefits and have outstanding federal student loans will be most affected. They may see reductions of up to $296.40 from their usual payments.
3. Will Social Security payments be delayed in June 2025?
Yes, some delays are expected. The Social Security payment schedule for June 2025 may experience disruptions, especially due to administrative changes. Payments may be issued later than scheduled for certain birth date groups.
4. How can I avoid the 15% reduction in my Social Security payments?
To avoid the 15% deduction:
-
Pay your outstanding federal student loan
Set up a payment plan with the Department of Education
Request a review or hardship exemption
Enroll in direct deposit
Monitor your My Social Security account for updates
5. What should I do if I don’t receive my Social Security payment on time?
If your payment is delayed:
-
Wait at least 3 business days
Check your My Social Security account for notices
If still not received, contact the Social Security Administration (SSA) to report the issue and seek assistance.
