Sep 3, 2014

Big Dual Benefit Overpayment Problem

     A recent report by Social Security's Office of Inspector General (OIG) found that "Of the 50 sample Title II beneficiaries who were receiving benefits on 2 Social Security records, we determined that SSA incorrectly paid 29 (58 percent) beneficiaries full benefits on both records." 
     Let me give an example of how this happens. A woman goes on Social Security disability benefits at age 50. A couple of years later, her husband dies. She files a claim for Disabled Widows benefits. What's supposed to happen is that the widows benefit is reduced by the amount of benefits she's already receiving on her own account. The OIG report, which is based on a fairly small sample, suggests that more than half the time, Social Security is paying the full widows benefit. That would quickly cause a large overpayment. There are many, many cases along these lines.
     OIG estimated that there were over $6 million in potentially recoverable overpayments in just the 29 cases identified in their small sample, over $200,000 per case, and that there were more overpayments that would not be potentially recoverable.
     You can look at this report and say that Social Security is run by a bunch of incompetents. Maybe. What I see here is a demonstration of how completely inadequate Social Security's data system is. Why didn't the computers stop these overpayments before they ever happened? How can anyone think that Social Security's data systems are so wonderful that the agency can dispense with field offices?
     Note that these overpayments are entirely due to agency error. The claimants would have no idea they're being overpaid. They'll be very unhappy when they're told of the large overpayments. It's not just the Social Security trust funds that are the victim here. These claimants are victims also.
     In any case, the OIG report has identified a problem that will have to be addressed. This data system problem must be definitively resolved quickly.

17 comments:

Anonymous said...

Strange, I see it otherwise. Claimant's know the system and are trying to scam it by drawing more than they deserve. A claimant files for disability on her own account. She retains a representative. They go to the hearing and win. They both get paid, the claimant a sizeable chunk of back payment. The rep her $5,200.00 at the time. Later, the Agency catches that the woman has been drawing on her husbands already and is now drawing on her own account. Guess who gets hurt? The rep as she now has to pay the Agency back the $5,200.00 which has long been spent. She rightfully earned the money, but too bad... The claimant has to pay back what was overpayment and not rightfully hers. Way too many claimants are playing games with the system...

Anonymous said...

Bureaucrats who comment on this blog always seem to ascribe much more knowledge of the system to
claimants than is actually the case; they seem to be indoctrinated that the public is nothing but a bunch of fraudsters. There are a few people who try to "double-dip," but most disability claimants in my area are poorly educated former blue-collar workers. I see many more claimants who have been unaware of such important matters as dates of last insurability for SSDI and adult disabled child benefits. I wonder if the number of people who lose out on benefits for which they are qualified outweighs the "fraud" cases--I see many more of those cases.

Anonymous said...

Well said, 10:37. The claimants I see and too worried about how they're going to pay next month's rent instead of trying to think of ways to "fraud the system." It's tough out there - many people are just trying to figure out how to survive.

Anonymous said...

Yeah, trying to figure out how to survive. I had a claimant, and we figured up her amount of entitlements and she would have to make $20.00 an hour to earn the same amount. Tough since she wasn't but worth $8.00 an hour...

Anonymous said...

11:11: so this claimant was only "worth" $8/hour to you? Please tell me that you are not an SSA employee.

ash is rad said...

Is anyone else's late? Its usually in at Midnight but has yet to be in.

Anonymous said...

There isn't a job in the world that she could get more than $8.00and hour for. No education, no experience, a lot of alcohol and drugs. And yes, not all Agency employees are bleeding heart liberals. Some of us deal in reality.. If enough would, it would help with the national debt.

Anonymous said...

Charles, you realize that the field offices do not process T2 payments. That is done by the Payment Service Centers, so decreased field offices would not make a difference. What needs to happen is for SSA to rely less on obscure codes and utilize plain English. If the MBR stated in plain English that beneficiary "A" began receiving spousal benefits on date X, then when she becomes entitled to DIB on her own record on date Y, it would be much more likely for the SSA employee to recognize the need for an offset. However, when I suggested this to SSA (as part of the employee suggestion program), I was told it was not possible (read as "we do not want to do the work").

SSA causes many overpayments by careless rushed processing and by failing to properly explain and support its actions.

Anonymous said...

Charles, you realize that the field offices do not process T2 payments. That is done by the Payment Service Centers, so decreased field offices would not make a difference. What needs to happen is for SSA to rely less on obscure codes and utilize plain English. If the MBR stated in plain English that beneficiary "A" began receiving spousal benefits on date X, then when she becomes entitled to DIB on her own record on date Y, it would be much more likely for the SSA employee to recognize the need for an offset. However, when I suggested this to SSA (as part of the employee suggestion program), I was told it was not possible (read as "we do not want to do the work").

SSA causes many overpayments by careless rushed processing and by failing to properly explain and support its actions.

Anonymous said...

I think the intent of the post was to identify that SSA needs to update their database. If that were funded the (I think 17) systems currently involved in the payment process could be reduced to a single system, that alone would greatly reduce the potential for incorrect claimant payments, regardless of the claimant's intent, fraud or honest error.

Anonymous said...

Agree Anon 2:52. It is not really the FO office fault and staffing them more will not help.

It's really, like you said, probably just a computer/accounting problem. The SSA is pretty good w/ their ERE database for medical records. They are bad w/ pretty much everything else. I would assume the IRS do not make these mistakes.

But they come after these old folks (like your example) like it is an IRS audit. Hmmm. These claimants probably should pay it back. But let me ask you - If you were given an extra $1000 or so/month, would you use the money?

You probably would.

Anonymous said...

This problem results from the complexity of calculating simultaneous/multiple entitlement benefits.

The agency has only the most basic (almost useless) tools for manual computation of benefits. Twenty years ago, when I was hired, the tools were mostly sufficient. Complex computations weren't that common.

Now, the agency has spent multiple year cycles paying down its backlogs by approving everybody. You have untold numbers of mothers and fathers entitled to benefits. This results in complex computations with factors like combined family maximums, dual entitlements, simultaneous entitlements, parisi adjustments, etc. Many cases even have simultaneous involvement of many/all of these factors. That was pretty much unheard of 20 years ago.

However, guess what? We are still using the same simple obsolete computational tools that existed 20 years ago. Of course, there are some Excel spreadsheets...

Come on - Excel spreadsheets as the best an agency with a 10 billion dollar budget can do?

Then, when you finally get the records set up, SSA has limited systems support for keeping these cases up to date. All of them require manual actions to do anything, from posting COLAs to doing entitlement conversions. Which, in turn results in employees who don't have the first clue about what the heck they are doing taking actions that result in some serious overpayments.

Billions in overpayments, and the agency still refuses to do anything about it.

Go figure. And it only gets worse from here.

Anonymous said...

Agency staffing is inadequate, training is substandard, accountabity is nonexistent due largely to the union. Add all of that up and that should shed some light on why there are so many mistakes made.

In my area, we are required to be Generalist CR's. Most people have trouble with one program...learning both creates a lot of problems.

Anonymous said...

It should probably also be noted also that these figures are probably greatly inflated. One problem with government self reviews is that the reviewer feels obligated to justify their position by finding as many errors as possible. Usually this is done by only selecting cases to review that meet certain criteria which make them much more likely to have an error.

Anonymous said...

re: Anon 8:32AM

I agree with you that this is the case on most issues. Unfortunately, however, based upon my personal experience this is probably one area where the figures are correct. Of course, the figures only include overpayments. They don't address the issues of large underpayments that can also be owed to claimants as a result of these errors as well.

The problem is that new SSA employees only receive the bare minimum of training on computations, including the simplest types of dual entitlement comps. They are then expected to learn to do the more complicated comps on the job.

Of course, many of their mentors can't do these types of computations either. So, basically, they just stagger in ignorance from one case to another and it is more luck than skill that they might actually get the comps right rather than wrong.

Gerald Vonberger said...

How does that big of an oversight happen long enough for it to become a huge problem like this. I feel bad for the people that will find out that they have been receiving way more than they were due. Is there going to be some sort of compensation for them? or will they just have a depleted social security fund?

Gerald Vonberger | http://www.scottmcnuttlaw.com/services.html

Anonymous said...

Gerald should learn more about how Social Security works before feeling sorry for people.