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GAO Report Examines Social Security Overpayments

by Mike Godfrey, Tax-News.com, Washington

19 December 2012


A report prepared by the United States Government Accountability Office (GAO) on the Supplemental Security Income (SSI) program has pointed out that its administrator, the Social Security Administration (SSA), has taken steps to prevent and detect overpayments, but that there is much room for improvement.

The SSI program provides cash assistance to disabled and aged individuals with limited income and assets. The Congressional Budget Office (CBO) has estimated that, in fiscal year 2013, the program will make payments to more than 8m people at a cost to the federal government of about USD53bn.

In fiscal year 2011, the SSA reported that overpayments to program recipients exceeded USD3.7bn, or about 7.3% of all payments, and an increase from the previous year. SSA data also showed that the amount of SSI debt recovered was less than half the amount of new debt detected.

In response to these overpayment statistics, Erik Paulsen (R - Minnesota), the Acting Chairman of the House of Representatives Ways and Means Subcommittee on Human Resources, which has jurisdiction over the SSI program, commissioned the GAO to review the major factors associated with SSI overpayments, what actions the SSA had taken to address them, and what was known about SSA’s recovery of overpayments from SSI recipients, including those not currently receiving SSI benefits.

According to the GAO report, SSI overpayment debt has "nearly doubled" since 2002 to USD7.3bn in fiscal year 2011. During the same period, overpayment debt collection has only grown modestly to USD1.2bn, with three-quarters of that debt being collected by reducing current SSI recipients’ benefits.

In addition, while the SSA has been developing more automated tools, such as "Access to Financial Institutions" and "Telephone Wage Reporting," to speed the processing of information, the GAO report reveals that the SSA is also allowing its field office claims representatives to unilaterally waive the repayment of overpayment amounts up to USD2,000 without supervisory review and approval.

The GAO concluded that the SSA should review its policies "concerning the supervisory review and approval of overpayment waiver decisions of USD2,000 or less, to determine if the policy is still appropriate given that federal agencies must have controls in place to ensure that no individual can control all key aspects of a transaction or event." The GAO report also recommended that the SSA should improve oversight to monitor the use of these waivers to identify trends and patterns.

Paulsen commented that "this report highlights the challenges that the SSA faces in administering a program as complicated as SSI. While the SSA has made progress in recovering overpayment debt, it also recognizes the need for new tools to collect more comprehensive and timely information to get the benefit amount correct at the earliest possible opportunity. This confirms the best solution for SSA, its beneficiaries, and taxpayers is the prevention of overpayments."

TAGS: individuals | compliance | tax | tax compliance | retirement | social economy | social security | United States

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