SSA Paid the Dead $46.8 Million

Audit: Feds paid disability beneficiary representatives long after they died

June 25, 2015

The Social Security Administration (SSA) paid individuals acting as representatives for disabled beneficiaries nearly $50 million even though they were dead.

An audit from the Office of Inspector General (OIG) is just the latest example of the SSA’s inability to figure out who on their rolls is still alive.

The audit focused on "representative payees," or a person who manages another’s finances due to mental or physical limitations. The OIG found that many payees acting on behalf of disability beneficiaries had died.

"SSA did not ensure new representative payees were selected when current payees died," the OIG said. "Based on our sample results, we estimated 2,548 deceased payees received approximately $46.8 million in [Old-Age, Survivors, and Disability Insurance] OASDI benefits and [Supplemental Security Income] SSI payments."

The total amount estimated to be "managed by deceased payees" was $46,886,205.

The majority of payments were made to dead payees who controlled payments to OASDI recipients, which receive an average $1,182.24 per month.

The OIG based its results on a sample of 200 representative payees, finding that 109 were deceased. The average total benefit payment to deceased payees was $15,762. Many received payments more than 2 years after their death.

The SSA is more likely to continue payments to dead payees than to cut them off, according to the OIG estimates. A total of 2,548 deceased payees received payments, while only 2,014 payees were not issued benefit funds after their death.

Though the OIG said a majority of payments to the dead did not show signs of fraud, the report highlights continuing problems with the SSA’s record keeping methods.

Of the 2,014 dead payees who did not receive funds after their death, 1,715 remained on the SSA’s Master Beneficiary Record (MBR) or Supplemental Security Records (SSR) databases. "Incorrect Social Security numbers (SSN) in SSA’s files compromises SSA’s computer matching efforts," the OIG said.

The agency has massive amounts of incorrect SSNs on file. Earlier this year the OIG reported that the SSA has 6.5 million Social Security Numbers for 112-year-olds on file, allowing for "thousands of instances of potential identity theft." There are only roughly 35 people aged 112 years or older living worldwide.

SSA has a habit of paying the dead. The OIG identified that the agency paid at least 740 dead people $17.1 million in benefits between 2013 and 2015, although benefit payments to the dead is likely much higher. Another audit found that SSA paid $3 million to 14 dead Californians who had died in the 1980s.

Payment to representative payees is another area where taxpayer funding goes to the deceased. The SSA is responsible for choosing a new person to manage a beneficiary’s payments when a payee dies. Most of the time the agency was able to determine the person had died soon after their death, but then unable to replace the payee and shut off payments.

"Although SSA knew about the death of payees in most cases within [one] month it took the agency more than 12 months to replace the deceased payees in 60 percent of the case in which a deceased payee was issued funds," the OIG said.

Though 84 out of the 109 deceased payees in the audit’s sample were identified as dead within one month, 34 still received benefit payments for more than two years after their death.

The findings were based on a review of SSA records between July 2014 and March 2015. Some payees had died as early as February 2000.

The problem of paying dead representatives has persisted for decades. The OIG issued audits in 1999 and 2006, when the SSA agreed with recommendations to "upgrade systems to ensure deceased payees are identified and replaced in a timely manner."

Nearly a decade later, the SSA said they agreed with the audit’s findings.

"We are committed to ensuring the accuracy of the benefits we pay individuals responsible for managing beneficiary payments," said Frank Cristaudo, counselor to the SSA commissioner. "As part of our efforts to improve the accuracy of our records, we are currently in a multi-year effort to improve our death report processing and make the Numident our official repository for death information going forward."

"Upon completion, the redesign will improve the availability of death information to all of our systems, including Title II, Title XVI, and the Representative Payee System," he said. "These enhancements should prevent the occurrence of any future cases described in this audit prospectively."