Study: Social Security overpaid $1 billion

updated 7:24 p.m. ET Oct. 18, 2004

WASHINGTON - The Social Security Administration doled out nearly $1 billion too much in disability payments last year, frequently sending checks to people who had returned to work, congressional investigators said Monday.

The overpayments grew by 15 percent since 1999, contributing to mounting debt of nearly $3 billion in 2003, the congressional Government Accountability Office said.

In some cases, the payments have continued for years because Social Security uses outdated earnings information to verify that recipients remain eligible to collect disability, GAO said.

Even armed with figures to question eligibility, Social Security moves slowly to cut off payments, GAO said. Investigators found one person who collected $105,000 in excess payments stretching nearly seven years and Social Security officials could not explain why, GAO said.

The government paid $70 billion to 7.5 million disabled workers, their spouses and dependents in the 2003 spending year, the GAO report said. The average monthly benefit was about $723.

People who work and earn more than $810 a month lose their eligibility.

But information on recipients’ earnings often is up to 18 months old by the time the agency reviews it.

“SSA officials told us that the age of the earnings data impedes the agency’s ability to effectively detect potential overpayments in a timely manner,” GAO said.

Sen. Charles Grassley, R-Iowa, criticized the agency’s inability to act quickly. “The Social Security Administration’s failure to identify those who work and earn more than the law allows undermines the integrity of the disability program and hastens the insolvency of the trust fund,” said Grassley, who requested the study.

Social Security Commissioner Jo Anne Barnhart agreed that her agency needs to cut down on overpayments. “We agree that the agency needs to explore new tools and data sources that can be used to more effectively detect and prevent earnings-related overpayments,” Barnhart said.

GAO found that overpayments actually have increased from $772 million in 1999 to $990 million in 2003 and Social Security’s efforts to improve collections did not keep pace.

Debt from uncollected excess payments grew from $1.9 billion to nearly $3 billion, GAO said.

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