Social Security made nearly $72 billion in improper payments, most of which were overpayments from fiscal years 2015 through 2022, according to a recently released report by the Social Security Administration's Office of the Inspector General.
While the $72 billion is less than 1% of the total benefits paid during that period, at the end of fiscal 2023, SSA had an uncollected overpayment balance of $23 billion, according to the report, Preventing, Detecting, and Recovering Improper Payments.
The watchdog office has identified improper payments as a major management challenge since fiscal 2002, according to the report.
Clawing back improperly paid benefits can result in financial hardship. About a million people a year are billed by the agency for benefit overpayments, often thousands of dollars, "60 Minutes" reported in late 2023.
Social Security Commissioner Martin O'Malley told lawmakers earlier this year that addressing overpayments was a top priority.
On March 20, O'Malley, who took over as head of the agency in December, told Congress that SSA was ceasing the practice of recovering overpayments by withholding 100% of benefits, effective March 25.
Those who do not respond to repayment notices now have their benefits withheld at a rate of 10%, or $10, whichever is greater.
The SSA has said 10% is a "much more reasonable default withholding rate," similar to the current rate in the Supplemental Security Income (SSI) program.
"Improper payments have been a longstanding challenge for SSA," Michelle Anderson, assistant inspector general for audit and acting inspector general, said in a statement. "While the Agency has taken actions to address this challenge, it needs to do more, and OIG's recommendations can guide the Agency as it determines those corrective actions."
Anderson stated that "without better access to data, increased automation, systems modernization, and policy or legislative changes, improper payments will continue to be a major challenge for SSA into the future."
Root Causes
While O'Malley has prioritized addressing improper payments, Nancy Altman, president of Social Security Works, told ThinkAdvisor Thursday in an email, "there is a limit in what any commissioner can do."
Said Altman: "To address the root causes of improper payments, the Supplemental Security Income program must be simplified and the Agency must be adequately staffed. Only Congress can simplify the law. Only Congress can stop starving the agency."
