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Are Social Security's disability overpayments a symptom of a larger problem at SSA?


As if you weren't already worried that Social Security may not be around when you retire, the Social Security Administration is losing lots of money by sending over-payments on disability insurance checks, according to two federal reports.

Last year, Social Security made over $1.2 billion in new disability insurance over-payments, according to the Government Accountability Office, and that number is adding to an alarming debt.

Are Social Security's disability overpayments a symptom of a larger problem at SSA?

Watch: What's all the fuss over Social Security?

Overpaid pensions

A new report from the government accountability office found Social Security had overpaid about $129 million in disability insurance to roughly 4,900 beneficiaries.

This happened because agents did not account for pension benefits those people were already receiving. 

Overpayments up 70 percent

The total amount of disability insurance over-payment debt has increased 70 percent in the last decade, according to the report. While Social Security can collect the over-payments by withholding money from a liable beneficiary's disability checks, the agency often doesn't, according to another watchdog report.

The Social Security Administration's Office of Inspector General found in another report, published in April, that the agency had not collected over $80 million in over-payment debt that it should have.

Half of cases not even on SSA's radar

The administration made over 7,649 over-payments ranging from $987 to over $200,000 between 2005 and December 2014, the report said.

Investigators found that in nearly half of the cases it sampled, Social Security did not spot outstanding debts it could have collected. 

Cato criticism

Federal budget experts told Circa that these reports are just more examples of how the federal government is failing to protect tax dollars and taxpayer's future insurance benefits.  

"The new audit shows that the SSA is not doing everything it should to protect taxpayers' money," Chris Edwards, a federal budget analyst with the Cato Institute, said. "In a $1 trillion program, even small improvements in oversight could save billions of dollars."

Do you think Social Security will be around when you retire?

SSA budget cuts

But others argue that federal budget cuts have made it nearly impossible for Social Security to keep up with the workload. With a severely decreased workforce it's becoming more difficult for Social Security to keep track of the over-payments.  

According to the Center on Budget and Policy Priorities, Social Security's administrative budget has fallen from an already low 0.9 percent to just 0.7 percent. However, the demands on the administration have reach all-time highs as the baby boomer generation reaches the retirement age. 

SSA's plan to fix it

Social Security officials said they were looking into the over-payments and hoped to take appropriate actions by the end of July 2016, according to the Inspector General's report.

"Our goal is to build one comprehensive over-payment system that will allow us to track, collect, monitor and report on our over-payment activities," officials told the Inspector General.

Circa contacted Social Security to see if they had taken action on the over-payments but did not receive a response. 

National Taxpayers Union

But experts say those fixes and previous efforts by Congress to save Social Security from bankruptcy are too little, too late.

"Congress and the president may have forestalled for a few years (until 2022) the total bankruptcy of the fund by transferring money from other parts of Social Security, but that doesn't fix the structural problems of the system itself," Pete Sepp, president of the National Taxpayers Union, a nonpartisan tax watchdog, said.

Americans in genuine, dire need of these benefits are now left to wonder if disability can be made sustainable over the long term for their sake.
Pete Sepp, National Taxpayers Union

"Between over-payments, excessive claim approvals by administrative law judges, and qualification rules in need of reevaluation, Americans in genuine, dire need of these benefits are now left to wonder if disability can be made sustainable over the long term for their sake," Sepp said.

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