Social Security Administration Hands Out $1.3B In Disability Insurance Benefits To Ineligible People

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The Social Security Administration hopes to recoup some of the $1.3 billion it overpaid to people claiming to be disabled. 401(K)2012, CC BY-SA 2.0

The Government Accountability Office (GAO) estimates that the Social Security Administration (SSA) gave about $1.3 billion to people who weren’t actually eligible for the benefits. The figure is based upon analyzing SSA data on beneficiaries who received disability insurance between December 2010 and January 2013. 

The GAO estimated that $1.29 billion in cash benefits were overpaid to about 36,000 people, according to a statement. Although both the amount of payments and the number of beneficiaries account for less than one percent of each, the GAO still says that the overpayments highlight weaknesses in the administration's procedural system, FOX News reported.  

“This report demonstrates just how little importance the Social Security Administration places on policing its disability rolls,” said Sen. Tom Coburn of Oklahoma, the ranking Republican on the U.S. Senate Committe on Homeland Security and Governmental Affairs, according to the AP. “SSA has known for years that it could prevent millions of dollars in improper disability payments using quarterly wage records, but chose not to.”

In order to receive disability benefits, beneficiaries have to wait five months, during which time they should earn at most $1,000 a month. By requiring a waiting period, the administration can be confident that disability insurance is going to someone with long-term disabilities.

By searching a federal wage database, the GAO was able to determine that some people had worked, and earned significant wages during the earning period. One physician, for example, received $90,000 in benefits over the course of three years, even though he had earned as much as $22,000 a month during the five month waiting period, CNN Money reported.

The GAO found that others, who had returned to work for what’s called a trial work period, were receiving benefits long after the nine-month cut off period. One woman got up to $74,000 in benefits after her nine-month period ended.

One potential weakness, the report said, was that the administration might overlook certain cases in which the waiting period started in one year and ended in another year. Sen. Tom Carper (D-Del.), chairman of the U.S. Senate Committee Homeland Security and Governmental Affairs, told FOX News that the report offers some steps for avoiding another incident.

“We are planning to do an investigation, and we will recoup any improper payments from beneficiaries,” SSA spokesman Mark Hinkle said. “It is too soon to tell what caused these overpayments, but if we determine that fraud is involved, we will refer these cases to our office of the inspector general for investigation.”

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