Report: Social Security Administration Paid Nearly $50 Million to Dead Representatives
Amber Athey /
The Social Security Administration hasn’t had a great summer.
The Office of Inspector General (OIG) recently reported that the Social Security Administration (SSA) paid $46.8 million to deceased individuals who had, prior to their death, been acting as financial representatives for Social Security recipients. This report comes just a few weeks after the OIG identified that nearly half of disability recipients had been overpaid within a 10-year period, including payments to deceased beneficiaries.
Beneficiaries may have a representative manage their finances when they are unable to do so themselves due to age or physical or mental impairment. In such cases, the representative receives Social Security payments on behalf of the beneficiary. When a representative dies, the SSA is supposed to ensure that a new representative is appointed and the old one is taken off the payroll. However, the SSA failed to assign new representatives in a timely manner, taking at least a year to do so in 60 percent of cases. This means that deceased representatives were still being sent checks from the SSA.
According to the report, the misallocated payments included $36.4 million in retirement and disability (OASDI) payments and $10.4 million in Supplemental Security Income payments. (Supplemental Security Income is a means-tested program targeting the elderly and those with disabilities who have insufficient work histories to qualify for sufficiently high disability and retirement benefits.) It is unclear whether the payments eventually made it to the intended beneficiaries, or if the money was recouped by the SSA.
It’s troublesome that the SSA can’t keep track of who is alive on their payrolls, especially considering the steep financial issues the Social Security programs are facing. Stopping improper payments and ensuring that payments reach their intended recipients make for an important first step in eliminating some of the waste and fraud that occurs in Social Security’s programs.
Social Security’s disability program is garnering particular attention in congressional hearings this year because its trust fund is projected to be exhausted before the end of 2016. The Heritage Foundation’s Social Security expert, Romina Boccia, recommends:
Congress should act responsibly by adopting reforms that protect benefits for disabled Americans who need them, while attacking fraud and mismanagement. It is important that Congress address the increasing use of Social Security’s disability program as a long-term unemployment and early retirement program, contrary to statutory intent.
Congress should adopt reforms that encourage a return to self-sufficiency among the marginally and temporarily disabled with a prospective period of disability that acknowledges individual needs.
Congress should further reduce unfair incentives for early retirement. Moreover, Congress should consider ways of encouraging greater provision of private disability insurance, which would help to provide benefits faster for those who become in need of them while emphasizing work accommodations over dependence.
The time for Social Security reform is now.
Amber Athey is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please click here.