Social Security Adminstration Overpaid Billions in 2009

According to a U.S. Government investigator, the Social Security Administration (SSA) paid out $6.5 billion in 2009 to people who were not rightfully entitled to those funds. Roughly two thirds of that were under a program which aims to help the most financially disadvantaged among us. In most cases, these overpayments were because the recipients had income or other assets that were unreported or under-reported. In simpler terms, this really means that the funds were obtained under fraudulent circumstances.

According to Patrick P. O’Carroll, Inspector General of the SSA, about ten percent of the agency’s payments under the Supplemental Security Income (SSI)

program are improper. However, O’Carroll stated that the overpayment rates for disability, retirement and survivor benefits are much lower. These programs constitute the vast majority of the agency’s payments.

These overpayments have drawn the attention of the House Ways and Means Subcommittee, which oversees the funding for the SSA. According to Subcommittee Chairman Rep. Charles Boustany, R-La., “The scope of these problems is considerable”. Whether these improper payments are the result of a mistake on the part of the agency or fraud on the part of the recipient, the end result is that funds are needlessly taken from those who may need them in the future. The bottom line is that the very future of these programs may be shortened. In addition, they waste billions of taxpayer dollars each year.

Given the state of the American economy and the record size of the Federal budget deficit, the government has begun to focus on areas where avoidable waste is most evident. With this in mind, President Obama in 2009 challenged federal agencies to reduce improper payments. In 2010, Congress established the goal of a 50 billion dollar reduction of improper payments in a two-year period.

Putting a positive spin on these improper payments, the SSA’s deputy commissioner, Carolyn W. Colvin highlighted the fact that the agency makes payments to nearly 60 million recipients in an accurate and timely manner, month-in and month-out. Further, Colvin notes that the agency has improved the accuracy of their payments in each of the past three years.

In an effort to continue this trend, the agency has stepped up the number of reviews it conducts each year to be certain that applicants still qualify to receive disability benefits under medical and financial guidelines. Additionally, the SSA is continuing to take advantage of technological advances in order to track the intentional misuse of funds. These efforts are especially noteworthy in light of the fact that in 2009, only two other agencies (the Departments of Health and Human Services and Labor) paid out more in improper payments than the SSA.

Given the fact that the trust funds which support the SSA’s disability and retirement programs are currently projected to run dry in 2036, it is imperative that the agency find ways to curb wasteful spending, while at the same time making these funds accessible to those who need them. As distasteful as most of these fraudulent payments are to the majority of us, even more distasteful is the idea that someone who has worked a lifetime paying into this system would need those funds, only to find that they are no longer available.