The Social Security Administration (SSA) has come under intense scrutiny due to its persistent failure to address the issue of improper payments. A recent report from the SSA’s Office of the Inspector General (OIG) has highlighted the agency’s shortcomings in implementing key recommendations aimed at reducing these costly errors.
The improper payments in question include both underpayments, where beneficiaries receive less than they are owed, and overpayments, where beneficiaries receive more than they are entitled to.
Scale of the Problem
Between fiscal years 2015 and 2022, the SSA is estimated to have made nearly $72 billion in improper payments, with the majority being overpayments. By the end of fiscal year 2023, the balance of uncollected overpayments had ballooned to a staggering $23 billion.
This alarming figure underscores the urgency of the issue. The OIG’s report has emphasized that the SSA must take immediate action to minimize the risk of improper payments and recover overpayments promptly.
Missed Opportunities
The OIG report outlines the SSA’s failure to implement several critical recommendations that could have significantly improved its ability to recover overpayments and issue underpayments. Despite being urged to take action in 2018, the SSA’s response has been lackluster. The agency initially proposed a “comprehensive debt management product” to tackle the problem but abandoned the initiative in 2024 due to funding constraints.
This failure to act has drawn pointed criticism from Michelle L. Anderson, the Assistant Inspector General for Audit and Acting Inspector General. She remarked, “Improper payments have been a long-standing challenge for SSA. While the Agency has taken steps to address this challenge, it needs to do more, and the OIG’s recommendations can help guide the Agency as it determines those corrective actions.”
The severity of the problem was further highlighted by another OIG report, which revealed that the SSA had made over $1.1 billion in improper payments to a sample group of 528,000 beneficiaries as of February 2024. This report also noted the inefficiencies in SSA’s processes, particularly the lengthy average processing time of 698 days to resolve an improper payment.
Response to Overpayments
In light of growing concerns about the financial burden that overpayments place on beneficiaries, many of whom are unaware of these errors, the SSA has announced a change in its recovery practices. Previously, the agency could recover the full amount of an overpayment by withholding 100 percent of a beneficiary’s monthly Social Security payment. Recognizing the undue hardship this could cause, the SSA has now decided to limit the amount it recovers to 10 percent of a person’s monthly benefit.
SSA Commissioner Martin O’Malley emphasized the importance of this change, stating, “Social Security is taking a critically important step toward our goal of ensuring that our overpayment policies are fair and equitable and do not unduly harm anyone.” He acknowledged the severe consequences of the previous policy, noting, “It is unconscionable that someone could face homelessness or be unable to pay bills because Social Security withheld their entire payment to recover an overpayment.”
Challenges Ahead
Despite the SSA’s efforts to make its recovery practices more humane, the ongoing issues highlighted by the OIG suggest that the agency has significant work ahead. The SSA’s duty to the taxpayers requires it to be a good steward of the funds entrusted to it, but systemic issues, including outdated systems and a lack of modernization, continue to hamper its ability to effectively manage improper payments.
The OIG’s recommendations, if implemented, could provide a roadmap for the SSA to improve its processes. These include better access to data, increased automation, systems modernization, and potentially, legislative changes. Without these critical reforms, improper payments will likely remain a significant challenge for the SSA, continuing to undermine the agency’s mission to serve the American people effectively.
FAQs
What are improper payments?
Improper payments include overpayments and underpayments to beneficiaries.
How much has SSA overpaid since 2015?
The SSA has made nearly $72 billion in improper payments since 2015.
What is SSA’s new policy on recovering overpayments?
The SSA now limits overpayment recovery to 10% of a beneficiary’s monthly payment.
How long does it take SSA to resolve an improper payment?
It takes SSA an average of 698 days to resolve an improper payment.
What are the OIG’s recommendations for SSA?
The OIG recommends better data access, automation, and systems modernization.
