Social Security struggles to collect $5.4 billion it overpaid to disabled workers

Introduction

The Social Security Administration (SSA) overpaid disabled Americans more than $1.4 billion in disability checks during fiscal year 2010 and was able to recover only $839 million of that amount, according to a report issued Thursday by the Government Accountability Office.

The agency’s chronic problem with overpayments means that the government is now owed a total of $5.4 billion from disabled Americans, the GAO said.

Most of the overpayments occur because SSA lacks timely earnings data for people who return to work and may no longer qualify for disability payments because their income exceeds the $1,000 per month limit, the GAO said. In 49 out of 60 of those cases examined by the GAO, “there was no evidence in the file that the beneficiary reported his or her earnings, as required by program guidelines.”

The SSA relies on year-old data it obtains from the Internal Revenue Service to detect if a beneficiary’s income exceeds the limits.

The agency also lacks clear deadlines and goals for processing the reports that determine whether or not a working individual still qualifies for disability payments, the report said, adding that some cases may wait up to 15 months for review. While the SSA “targets 270 days to complete a case, actual

processing time ranged from 82 to 992 days (with a median of 396 days) in the 60 cases GAO reviewed, and overpayments which accrued as a result topped $1 million total,” the report said.

“We use many tools to assist us in collecting overpayments—benefit withholding, repayment arrangements and external collection agencies,” an SSA official wrote in response to the report. “We pursue other options to prevent overpayments from occurring. . . . We are also pursuing legislative changes.”

Among the 60 cases the GAO examined, individual overpayments ranged from $1,126 to $53,436. The agency tries to collect repayments within 36 months, but some repayment plans can take decades because of an individual’s small income.

In the case of one 60-year-old repaying $10 per month, it will take 223 years to pay off the entire $26,715 owed to SSA, the report said.

The SSA told the GAO it plans to refer debts that are delinquent for at least 10 years to the Treasury Department for collection, and agreed to follow adopt GAO recommendations to improve how the agency detects, prevents and recovers overpayments.

FAST FACT: The Social Security Administration, which paid nearly $123 billion to 10 million disabled Americans in fiscal 2010, may be owed more money than the agency realizes. The GAO found manual processing errors accidentally deleted $53,097 in overpayments from agency records, and the SSA’s computer system to track collections can’t go beyond the year 2049 even though some repayment plans take decades.