GAO report: Social Security made nearly $5 billion in improper payments in 2019

(The Center Square) – The U.S. Government Accountability Office found that the Social Security Administration made billions of dollars in improper payments, including overpayments, to SSI beneficiaries despite having for years been instructed to make reforms.

The GAO has made several recommendations to SSA to improve its processes but the “SSA hasn't resolved its lags in processing beneficiaries' earnings information, which can lead to overpayments even if the earnings were reported on time,” the GAO report found.

Additionally, “SSA hasn't measured the effectiveness of how it deals with payment errors, despite our priority recommendation to do so.”

Part of the problem stems from the administration of work incentives and other employment support for transition-age youth (ages 14 to 17) receiving SSI benefits. A 2017 GAO analysis of SSA data from 2012 to 2015 found that less than 1.5% of SSI youth benefited from the incentives.

Those who worked and received benefits at the same time received overpayments for a variety of reasons. SSA overpayments "may be especially burdensome if the recipients were not aware they were overpaid and spent the money," the report adds.

Another issue stems from work incentives for working-age adults called the Ticket to Work and Self-Sufficiency Program (Ticket). The voluntary program was established to assist individuals with disabilities to find gainful employment.

Overpayments can occur when beneficiaries who work do not report earnings to SSA at all or late, or SSA delays in adjusting their benefit amounts. SSA reported that SSI's overpayment rate in fiscal year 2019 was estimated at 8.13%, higher than other SSA programs.

In 2019, SSA made approximately $4.6 billion in SSI overpayments that it is aware of.

Likewise, SSA's Office of Inspector General found that SSA had not resolved lags in updating information on beneficiaries' earnings and SSA has not implemented a 2020 GAO priority recommendation requiring it to develop and implement a process to measure the effectiveness of its corrective actions for improper payments and overpayments.

As of July 2021, about 71% of SSI beneficiaries were minors or working-age individuals with disabilities.

“SSA faces longstanding challenges related to administering SSI and its other disability programs,” GAO states, adding that it has issued multiple reports with recommendations on how SSA might address these challenges.

The GAO also provided testimony at a recent hearing before the U.S. Senate Finance Subcommittee on Social Security, Pensions, and Family Policy.

U.S. Sen. Sherrod Brown, D-OH, chaired the hearing and emphasized that SSI needed to be “brought into the 21st Century.” He’s recommended program updates to be included in the budget reconciliation bill and sponsored the SSI Restoration Act to update the program.

SSI benefit levels and eligibility rules have not been updated since the 1980s, he added, and in many cases since the program’s 1972 inception.

This was the first senate hearing held to address SSI since 1998.

When asked if eliminating SSI’s “in-kind maintenance and support” rules would reduce SSI underpayments and overpayments, Elizabeth Curda, a director in GAO’s Education, Workforce, and Income Security team, said, yes and no.

“We haven’t done any work on this issue specifically, but it’s a mathematic truism that if you raise the threshold for income and earnings, fewer people would automatically be in an overpayment status. But there are some countervailing effects that you need to keep in mind. On the one hand, in the short run, fewer would be in the over/underpayment status.

“But, overall, the program costs are going to increase, because what was once an overpayment, subject to recovery, is now a program cost. In addition – to the extent that raising the limit expands the population of individuals who might be eligible for benefits – it might also increase the number of SSI recipients.

“And then, even after raising the limits, improper payments, over payments, under payments might all continue to be an issue if the system for determining individual eligibility continues to work the same way, with benefits changing as earning or living arrangements change. They just may be occurring at a higher level.”

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