2026 Social Security COLA Projected at 2.2% as Government Increases Overpayment Clawbacks

The Senior Citizens League (TSCL) has released its latest projection for the 2026 Social Security Cost-of-Living Adjustment (COLA), forecasting a 2.2% increase. This estimate follows a drop in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to 2.7% in February, down from 3.0% the previous month. The projected COLA for 2026 is slightly lower than the 2.5% adjustment seen in 2025, reflecting a slowdown in inflation.

At the same time, the federal government is ramping up efforts to recover overpaid Social Security benefits, with new policies set to take effect on March 27. Under the updated rule, the Social Security Administration (SSA) will withhold 100% of future payments from seniors who have received accidental overpayments until the full amount is recovered. This marks a sharp shift from the Biden administration’s policy, which capped withholdings at 10% of monthly benefits or $10, whichever was greater. The new policy applies only to overpayments occurring after March 27.

According to SSA financial reports, the agency has recovered an average of $4.2 billion in overpayments annually from 2017 to 2023. However, the total outstanding balance of uncollected overpayments stood at $22.8 billion during the same period. TSCL analysis suggests that if the government were to recover all outstanding overpayments, it could potentially distribute an extra $495 to each Social Security recipient in a given year. Additionally, if recovered funds were redirected as annual dividends to retirees, seniors could see an average increase of $77 in yearly benefits.

Despite the government’s intensified efforts, TSCL has voiced concerns over the potential hardships the new policy could impose on seniors. Currently, beneficiaries have just 30 days from notification to repay overpaid benefits before their Social Security checks are withheld. TSCL previously supported the Social Security Overpayment Fairness Act, a legislative proposal that would have extended this repayment window to 120 days. While the bill failed to pass in the previous Congress, TSCL hopes lawmakers will revisit the issue to provide seniors with greater financial relief.

"While we support recovering overpaid Social Security benefits, the immediate 100% withholding policy could impose significant financial strain on beneficiaries," said Shannon Benton, Executive Director of TSCL. "Many seniors are unaware of overpayments and could suddenly find themselves without financial support. Extending the repayment window would offer much-needed flexibility."

TSCL continues to advocate for fair Social Security policies that protect retirees’ financial stability while ensuring responsible government oversight. With COLA adjustments expected to remain below the inflation averages of the early 2020s, TSCL urges lawmakers to explore alternative ways to strengthen Social Security benefits.

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