Social Security's Office of Inspector General (OIG) has issued a report on Social Security's efforts to deal with situations in which the agency receives some information suggesting the possibility that a beneficiary has died but not definitive proof of death. Two of the situations identified by OIG were mail returned as undeliverable or a beneficiary who cannot be located. Not surprisingly, there are often overpayments in these cases when it turned out that the beneficiary had died. The agency often failed to recoup the money in these cases. OIG identified 58 cases involving about $1 million where that happened.
This is one of those reports where you wonder whether OIG considers the collateral costs of what it is recommending. Sometimes people move and fail to leave a forwarding address. Sometimes the Post Office fails to properly implement a forwarding address. Sometimes a John Smith is reported to have died but the agency needs the death certificate to make sure it doesn't cut off benefits to the wrong John Smith. Sometimes people just disappear. Sometimes they reappear. An overly aggressive approach to these types of cases could save money but it could also cause benefit terminations for a lot of people who aren't dead. That's an enormous hassle for those whose benefits are wrongly terminated. Social Security doesn't have an army of employees with time on their hands to quickly investigate and sort out these cases.