Social Security Distributed Almost $72 Billion in Improper Payments, Watchdog Says

The Social Security Administration (SSA) made nearly $72 billion worth of improper payments over a period of seven years, with almost a third yet to be recouped, according to the SSA’s Office of the Inspector General (OIG).
The agency still had $23 billion in uncollected overpayment balance at the end of fiscal year 2023. The report cited improper payments as a “longstanding challenge” for the SSA. The agency has taken actions to remedy the situation, the OIG said.
For instance, the SSA is developing an information exchange to access wage data from payroll data processors to reduce payment errors. And in October, the agency initiated a review of its overpayment procedures, systems, and communications to identify areas where improvements can be made.
However, “there is more it needs to do,” the report stated. The OIG pointed out that it is crucial for the SSA to find ways to prevent improper payments before they occur to reduce the administrative and productivity costs incurred to correct these errors.
Improper payments not only create additional work for SSA employees but also it impose burdens on beneficiaries who receive such payments, the watchdog noted.
“Without better access to data, increased automation, systems modernization, and policy or legislative changes, improper payments will continue to be a major challenge for SSA into the future,” said Michelle L. Anderson, assistant inspector general for audit and acting inspector general.
“We have been deeply concerned by stories from our constituents and recent reports of the extreme financial hardship placed upon beneficiaries who are asked to quickly repay in full or whose payments are halted, reduced, or reclaimed as the agency attempts to correct improper payments, many of which occurred due to agency error,” they wrote.
While the senators admitted that the SSA may be facing constraints such as low staffing levels and high staffing turnover, it asked the agency to prioritize efforts to correct the improper payments issue.
Earlier, the agency would have deducted 100 percent of a beneficiary’s monthly benefits until the overpaid amount was clawed back. The SSA’s new system limits this to just 10 percent of monthly benefits.
The SSA took steps to make it “much easier” for overpaid beneficiaries to request a waiver of repayment, which would be applicable in conditions in which an individual does not have the ability to repay the overpaid amount.
Earlier, beneficiaries who were overpaid had to return the funds within 36 months. The SSA has now extended this by two years. As such, people have 60 months to repay the overpayments.
“Implementing these policy changes—with proper education and training across the people, policies, and systems of the agency—is an important but complex shift. And we are undertaking that shift with urgency, diligence, and speed,” Social Security Commissioner Martin O’Malley said.