Government Improperly Paid $571 Million in Disability Benefits to People Who Already Had Jobs


The Social Security Administration improperly disbursed an estimated $571 million in disability benefits to people who had already returned to work, according to a government audit report.

Of the overpayments, nearly $201 million of the improperly disbursed benefits checks was due to the administration’s slow processing, and almost $371 million was the fault of the beneficiaries who didn’t complete paperwork on time, the Office of the Inspector General wrote in a report released Tuesday.

Analyzing a sample of disability cases from 2012, the IG found a total of $1.3 million in overpayments, $446,000 of which were made as a result of administrative errors, as well as $823,000 due to individuals failing to report wages that would disqualify them from benefits.

People receiving disability benefits from the SSA are granted a trial work period before the government stops sending the payments. Recipients must report when they start work so the SSA can conduct “continuing disability reviews” to determine whether the person is eligible to continue getting disability payments.

In many cases — 26 out of the total 78 instances of improper payments the IG discovered — it took the SSA an average of 155 days to process legitimate earnings reports of people on disability. The SSA’s goal is to process those cases within 45 days of the first wage report, but the bureaucracy missed the mark on 19 cases.

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In one example, someone on disability reported in November 2014 that she had returned to work, and the SSA did not verify her employment until June 2015, and didn’t complete the process to halt benefits until September 2015.

The person was earning well over what the SSA was paying her, but was not required to forfeit the $7,823 improperly paid to her because she reported her earnings on time.

“SSA overpaid nearly $90,000 to beneficiaries in our sample who reported their earnings directly to the agency because it did not process work (continuing disability reviews) in a timely manner,” the IG wrote. “Accordingly, we estimate SSA incorrectly paid over $40 million because of its delayed processing of (continuing disability reviews) related to direct reports.”

The SSA also overpaid an estimated number of beneficiaries in cases where they received alerts that the individual was receiving income from a job, but did not act upon it.

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In one case, administrators received an alert in June 2013 that someone was getting disability but also earned $50,000 from a job in 2012. The administrators saw the alert, but closed it within a week and took no action to investigate.

The alert came up again in June 2014, this time indicating the person made $45,000 in 2013, and the agency investigated. The person had actually been employed since 2011, and had the agency investigated at the time of the first alert, it could have saved $14,000 in improper payments.

The IG estimates that in 2012, SSA incorrectly paid out $121 million in benefits because it either delayed processing this type of alert, or missed it altogether.

The bulk of the improperly paid disability benefits came because individual recipients failed to report their earnings in a timely manner. The IG found that SSA paid $823,000 because individuals failed to report their work wages. That could mean the SSA was unable to prevent $571 million in improper payments across the disability program.

To make matters worse, the SSA is also not good at collecting the improper payments of the $1.3 million improper payments made in 2012, the administration had not been able to collect more than $712,000 by November 2017. About $197,000 could not be collected because the SSA was responsible for the overpayment, or because the SSA didn’t catch the incorrect payment.

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