The Social Security Administration has paid more than $1.29 billion in excess payments to 36,000 people from December 2010 to January 2013. That's according to a recent report from the Government Accountability Office, or GAO, after its audit of Social Security Disability Insurance.
That sounds like an enormous number, but Steve Lord, director of forensic audits and investigative services for GAO, points out that the Social Security Disability program is the nation's largest cash assistance program for the disabled, with more than 10 million people receiving more than $128 billion in benefits in 2012. This error -- if there was one -- represents less than 1 percent of the dollars spent by the program during the designated time period. Social Security believes the GAO overestimated the amount that was paid improperly.
The problem revolves around rules that allow people to either work a limited amount while they wait for benefits or work at a test job to see if they are able to forgo their benefits. In both cases, workers apparently continued to receive benefits after the test and waiting periods ended.
Lord points out that both of these programs require self-reporting, so consistency is always going to be a problem.
Every time I write about Social Security's retirement program, several readers point out their belief that Social Security Disability has recipients who shouldn't be benefiting because they are healthy enough to work. Lord acknowledges that and says, "This is a really important program for those truly in need. The Social Security Administration needs to enhance oversight to make sure that only those eligible for benefits receive benefits, especially as concerns grow about the solvency of the program."
Even if in the scheme of things this is a small amount of overpayment, $1.29 billion is a big number for a lot of people who have paid into Social Security and whose retirement planning depends on it. Social Security disability and retirement funds are separate pots of money, with the much smaller disability fund in much worse financial shape. It is expected to run too short of money in 2016 to pay all benefits. The likeliest fix is for Congress to move money from the much larger retirement fund. That's what it did in 1994, when there was a similar shortfall.
Borrowing isn't a good answer. Figuring out a system to uncover discrepancies and eliminate them is a step in the right direction for Social Security.