You need to subtract the seam allowance from each patch (1/2") downsize the piece, then add the seam allowance back on.
For instance, if the pattern tells you to cut a 4 1/2" square, you subtract the seam allowance: 4 1/2 - 1/2, which leaves you 4". Downsize this (you are going for half) so that would be 2". Now add the seam allowance back on which gives you a 2 1/2" square.
Another way to look at it is if you consider the size of the patch AFTER it's sewn into the block. A 6" patch is cut at 6.5" if you want it half that size, or 3", you would cut a 3.5" square.