4 Ways President Donald Trump and His Administration Changed Social Security Forever in 2025

For more than 85 years, Social Security has been providing a financial floor for aging workers who could no longer do so for themselves. According to 24 years of annual surveys from national pollster Gallup, Social Security income is viewed as a necessity to make ends meet, in some capacity, by 80% to 90% of retirees.

However, this vital program isn't static. Various thresholds, such as the maximum monthly payout at full retirement age and the payroll tax earnings cap, change on a near-annual basis. Additionally, the president and their administration have the ability to alter the program.

Since Donald Trump was inaugurated on Jan. 20, he and his administration have made four direct and indirect changes to Social Security that have far-reaching implications for the program's more than 70 million traditional beneficiaries (retired workers, workers with disabilities, and survivors of deceased workers).

President Trump delivering remarks. Image source: Official White House Photo by Andrea Hanks, courtesy of the National Archives.

1. The Trump administration ended the Biden-era overpayment and recovery garnishment rate

One of the most headline-grabbing Social Security changes implemented under the Trump administration was the adjustment of the clawback rate for overpayments.

Occasionally, Social Security beneficiaries receive more than they're entitled to. While some of these errors are the fault of the Social Security Administration (SSA), they can also be due to beneficiaries failing to update important information.

For instance, non-blind workers with disabilities can earn up to $1,620 per month in wages and salary in 2025 without having their benefits halted. But if they secure a well-paying job and fail to update their income with the SSA, it can result in them receiving benefits to which they aren't entitled.

As of the end of the federal government's fiscal 2023 (Sept. 30, 2023), KFF and Cox Media found that nearly 2 million Social Security recipients had been overpaid, with the sum of this overpayment clocking in at $23 billion, according to the SSA's Office of the Inspector General.

During the COVID-19 pandemic, former President Joe Biden lowered the overpayment recovery rate to 10% from 100%. In other words, 10% of an individual's Social Security payout would be garnished, instead of 100%, until fully repaid.

The Trump administration, via the SSA, announced plans in April to begin garnishing 50% of benefits until overpayments are recouped. This garnishment was to start 90 days after the recipients received their notification letter.

The good news for these more than 1 million individuals who've been overpaid is that a trio of legal options exists that can potentially waive or reduce the amount they owe.

2. President Trump put an end to Social Security paper checks

A second way Donald Trump changed Social Security forever is through an executive order (EO) he signed on March 25 ("Modernizing Payments To and From America's Bank Account").

This EO established Sept. 30 as the compliance date when paper checks would no longer be used for Social Security payouts. The EO laid out three reasons why electronic fund transfers (EFTs) were advantageous:

1. EFTs get benefits into the hands of Social Security recipients considerably faster than mailing paper checks.
2. There's a defined cost advantage, with the average EFT costing Uncle Sam less than $0.15 per payment, and the typical paper check running the federal government about $0.50. Shifting to digital payments is expected to save the program approximately $2 million annually.
3. Paper checks are 16 times more likely to be lost or stolen when compared to an EFT.

More than 99% of traditional Social Security beneficiaries were already receiving a digital payment when the president signed this EO. Nevertheless, it meant more than half a million recipients (as of July 2025) were required to set up direct deposit or use a Direct Express card to continue receiving their monthly payout.

Image source: Getty Images.

3. The Trump administration beefed up personal identification measures for Social Security

Another change that's altered Social Security under the Trump administration is the new personal identification rules, which were fully implemented on April 14.

For example, beefing up personal identification methods means most recipients are no longer able to change their direct deposit information over the phone. Instead, adjusting direct deposit info can be done in person at an SSA office or online through a "my Social Security" account with two-factor authentication.

The purpose of these new rules is to reduce instances of Social Security fraud and theft. This keeps with the president's theme of eliminating perceived fraud and waste within federal government programs.

It should be noted that people with terminal illnesses and those set to be released from prison are exempted from the in-person and online verification rules that were implemented in mid-April.

4. The president's tariff and trade policy provided beneficiaries with a "Trump bump"

The fourth and final way President Donald Trump changed Social Security forever in 2025 is with his tariff and trade policy.

On April 2, a day the president dubbed "Liberation Day," Trump announced a 10% global tariff rate, as well as higher "reciprocal tariffs" on countries deemed to have adverse trade imbalances with the U.S. These reciprocal tariff rates have changed on several occasions following the announcement of trade deals.

The president's tariff and trade policy has had a direct impact on Social Security's cost-of-living adjustment (COLA), which is the raise beneficiaries receive on a near-annual basis that helps them combat the effects of inflation (rising prices).

On Oct. 24, the SSA announced benefits would rise by 2.8% in 2026, representing the fifth straight year of at least a 2.5% increase -- the first time this has occurred since a stretch from 1988 through 1997. A portion of the 2026 COLA can be attributed to Trump's tariff and trade policy.

Some of the goods being imported into the country are unfinished, such as steel and copper. Taxing these parts, accessories, and unfinished goods used to complete the manufacture of a product in the U.S. is what's known as an "input tariff." A study by four economists from the New York Federal Reserve ("Do Import Tariffs Protect U.S. Firms?") has shown that input tariffs can increase costs for U.S. manufacturers, leading to a higher inflation rate.

Since Social Security benefits can't decline from one year to the next if deflation (falling prices) occurs, it means the modest "Trump bump" for Social Security's 2026 COLA is a permanent part of the income traditional beneficiaries will receive going forward.

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