Debt Collection Activities Through the Treasury Offset Program (TOP)
The Social Security Administration (SSA) announced on Thursday that it will immediately resume debt collection activities through the Treasury Offset Program (TOP) that had been paused since 2020, reports Credit and Collection e-newsletter of 3/23/25.
Why It Matters
The move marks a shift in agency policy as the SSA looks to strengthen program integrity and reduce financial shortfalls. It comes as part of President Donald Trump‘s broader initiative to reduce government spending and eliminate inefficiencies.
The Department of Government Efficiency (DOGE), established under his administration, has played a key role in identifying areas for budget reductions across federal departments and agencies.
With more than 71 million Americans relying on Social Security, the SSA has faced growing financial pressures, criticism over administrative costs, and delays in processing claims.
What To Know
The TOP, administered by the Department of the Treasury’s Bureau of Fiscal Service, allows the federal government to intercept federal and state payments to recover delinquent debts owed to federal agencies.
The SSA began using TOP in 1992 to collect overpayments tied to Old-Age, Survivors and Disability Insurance (OASDI) and Supplemental Security Income (SSI).
Overpayments happen for several reasons, such as a beneficiary neglecting to update their income, marital status or work situation, or the SSA miscalculating how much it
should pay, according to the finance website NerdWallet.
Regardless of whether the mistake was down to the beneficiary or the SSA, those who receive overpayments are required give back the money, as the SSA is legally required to recover overpayments.
Prior to the COVID-19 pandemic, the SSA successfully recovered nearly $2 billion in overpayments through this program, but collections were suspended in March 2020 due to the economic impact of the pandemic.
Now that the moratorium has been lifted, the Department of the Treasury has resumed intercepting payments for debts referred by the SSA before March 2020, impacting an estimated 280,000 Americans with a total debt balance of $2.7 billion.
The SSA emphasized that while it is resuming collections, it is also providing individuals with “the necessary information and options to address their debts,” including flexible repayment plans, waivers, and appeals.
If the SSA believes a beneficiary has received an overpayment, they will mail them an official notice. This will explain how much they were overpaid, options for repayment and rights to appeal.
In addition to restarting debt collections, the SSA is pursuing broader cost-cutting and restructuring measures, such as:
- Reducing its workforce from 57,000 to 50,000
- Implementing a phased plan to reduce operating costs of the Electronic Consent Based Social Security Number Verification (eCBSV) service by 40 percent.
- Reducing its Information Technology Systems (ITS) budget by $150 million by canceling non-essential contracts.
The SSA also reported identifying more than $800 million in projected cost savings in 2025 through hiring freezes, contract cancellations, and reductions in real estate expenses, according to a March 3 statement.
What People Are Saying
Lee Dudek, the acting commissioner of the SSA, said in a statement: “Resuming collections through the Treasury Offset Program is a critical step in our commitment to being good stewards of taxpayer funds and ensuring the integrity of our programs. We are dedicated to recovering overpayments while providing individuals with the necessary information and options to address their debts.”
Megan A. Curran, policy director at the Center on Poverty and Social Policy at Columbia University,told Newsweek previously: “Social Security is the single largest anti-poverty program in the U.S. For example, it kept close to 30 million people out of poverty in 2023, the majority of them being over 65.”
She added that this was “a reduction in poverty that is far larger than any other individual program.”
Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities, said according to the Kaiser Family Foundation (KFF): “The results are predictable: more unnecessary suffering.”
Kate Lang, a director at the advocacy group Justice in Aging, said according to the KFF: “Those who are most vulnerable, with the fewest resources, are the ones who will feel the harsh impacts of this change.”
She added that many of these individuals are “going to be unable to buy food or keep the roof over their head.”
What’s Next
Debt collection is set to restart immediately, the SSA announced.