Social Security clawed back overpayments by docking 100% of benefits. Now it’s capping it at 10%. [Video]

The Social Security Administration said it’s reforming how it recovers overpayments of benefits following an outcry over policies that drove some Americans into financial distress, and even homelessness.

By law, the agency must claw back overpaid benefits, but SSA’s policies had sparked outrage and concern after some Social Security recipients reported surprise bills that demanded payment within 30 days. Sometimes the bills mounted into the tens of thousands of dollars.

If they couldn’t immediately pay the bill, the agency could dock their entire monthly Social Security payment, leaving some people financially destitute, as reported by “60 Minutes,” KFF Health News and other media outlets.

In a statement issuedWednesday, Social Security Commissioner Martin O’Malley said the agency will cease “the heavy-handed practice of intercepting 100% of an overpaid beneficiary’s monthly Social Security benefit” if they failed to respond to a demand for repayment. Instead, he added, the agency …