The Social Security Administration’s Office of the Inspector General (OIG) released a report entitled “Overpayments in the Social Security Administration’s Disability Programs – A 10-Year Study,” No. A-01-14-24114 (June 2015), available at http://oig.ssa.gov/audits-andinvestigations/audit-reports/A-01-14-24114.
The report followed 1,532 people who received disability benefits from October 2003 to February 2014. It found that 44.5% of the sampled population had at least one overpayment during that time, and this was the finding reported by many media outlets. However, the overpaid amounts were a very small percentage of the total benefits paid during this time. Most of the overpaid funds were recovered and the vast majority of overpayments occurred not because of fraud, but because of SSA’s errors or unavoidable consequences of program design. Furthermore, this report did not attempt to estimate how many people who receive Social Security disability benefits are ever underpaid.
Extrapolating from the sample, the report found that SSA likely overpaid $16.8 billion during the time frame studied. Of this, approximately $8.1 billion was recovered and $2.4 billion was waived or cancelled. While the remaining $8.7 billion in unrecovered overpayments from the Title II and SSI disability program is a large sum, it pales in comparison to the total amount of disability benefits paid in the ten-year period. For instance, in 2013 alone, and only counting Title II, SSA paid $140.1 billion in disability benefits.
The most common reason for an overpayment was a change in beneficiary’s income. This accounted for approximately 38% of overpayments. As discussed in a recent House Ways and Means Committee Social Security Subcommittee hearing (see article on page 1), when disability beneficiaries report earnings to SSA, it can take the agency months or years to adjust benefits, causing overpayments. SSA took an average of one month to identify overpayments due to a beneficiary’s death, three months to do so when a beneficiary was incarcerated, and nine months when a beneficiary had earnings.
Nearly 24% of the payments the report classified as overpayments occurred when individuals undergoing Continuing Disability Reviews opted to continue receiving benefits while their appeals were pending. SSA objected to these payments’ inclusion in the overpayment report because federal law allows beneficiaries to request benefit continuation in this situation, and even individuals who are found to have medically improved can have their overpayments waived if they pursued their appeals in good faith.
Please read the rest of the report for additional details
From the National Organization of Social Security Claimants’ Representatives.