Social Security Administration Overpaid $371.5 Million in Disability Benefits

SSA overpaid some individuals for more than a decade, totaling $100,000 per person

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The Social Security Administration (SSA) overpaid individuals a total of $371.5 million in disability benefits from fiscal year 2009 through fiscal 2013, according to a Government Accountability Office (GAO) report.

These overpayments are cause for concern, as the Social Security’s Disability Insurance Trust Fund is expected to go broke by 2016, according to SSA’s 2015 annual report.

"During a time of growing concern about the solvency of the DI trust fund, it is important for SSA to take every opportunity to help improve the financial status of the program," the GAO said. The report examined how these concurrent Federal Employees’ Compensation Act (FECA) payments affect Disability Insurance (DI) overpayments.

The GAO found that SSA did not detect concurrent FECA payments for about 1,040 individuals during at least one month from July 1, 2011, through June 30, 2014.

To test SSA’s internal controls, GAO randomly selected 20 beneficiaries for review. In all 20 cases, SSA’s controls failed to detect and prevent overpayments. In seven of the cases, SSA did not detect overpayments for more than a decade, and each of these individuals received $100,000 in overpaid benefits.

One of these seven individuals received FECA benefits in the 1980s and was approved for disability benefits 14 years later in 1994. The GAO found that this individual received $200,000 in overpayments for more than 20 years.

The SSA’s "internal controls" rely on beneficiaries to self-report overpayments.

"SSA officials told us that if beneficiaries do not self-report benefits, there are no system prompts that would alert SSA staff to ask beneficiaries if they are receiving any workers’ compensation benefits, including FECA payments," states GAO. "SSA officials agreed that relying on beneficiaries to self-report benefits presents a challenge in identifying overpayments related to the concurrent receipt of FECA benefits."

The disability insurance program is the nation’s largest cash assistance program for workers with disabilities. In fiscal year 2014 it paid $142 billion to 11 million beneficiaries.