Oct 28, 2013

Is Social Security Sending Out $75,000 Checks To Random Claimants?

     From CNN Money:
Americans dealing with injuries, mental illnesses and other impairments are being notified out of the blue that they’ve been overpaid by the Social Security Administration and now owe thousands of dollars.

One 33-year-old veteran began receiving Social Security disability payments after his left foot was amputated following an explosion in Iraq in 2007. After going through rehab for his prosthetic leg, he began working full-time for a defense contractor in 2009. As soon as he started collecting a paycheck, the veteran, who asked to remain anonymous, reported his roughly $100,000 annual salary to the Social Security Administration.
When recipients of disability benefits reenter the workforce, they have a nine-month trial period in which they continue to receive benefits. Once the trial period ends and their earnings exceed a certain level — currently $1,040 a month — the payments are supposed to stop. And that’s exactly what happened in his case.
But then, last July, he noticed a $75,000 deposit in his checking account. Three days later, a letter arrived from the Social Security Administration saying it had reinstated his benefits because he had not been “gainfully employed” during the past three years. ...
It turns out Social Security overpayments like these are surprisingly common.
A recent audit conducted by the Government Accountability Office found that Social Security made $1.3 billion in potential overpayments to disability recipients in just two years. While some of that amount can be attributed to fraudsters who game the system, many innocent people are also receiving overpayments and then being asked to pay the agency back. Some continue being paid even after they notify the administration that they are no longer eligible for benefits, while others have no idea they are being overpaid.
     I can't say what happened in the vet's case. I can say that the work incentives that Congress has provided for recipients of Social Security disability benefits are so complicated that mistakes are inevitable but not a $75,000 mistake of this sort. That's unusual.
     The Government Accountability Office (GAO) report referenced by this article is seriously misleading. It assumed that any work performed by a person who had applied for Social Security disability benefits made that person permanently ineligible for Social Security disability benefits. That's just wrong. That's not the way the law is written. For instance, many people who have applied for Social Security disability benefits attempt to return to work but are only able to last a short time on a job. This is what Social Security calls an Unsuccessful Work Attempt (UWA) and has no effect upon the person's entitlement to benefits. If anything, a UWA makes a Social Security disability claimant look more credible. GAO would have a person who has engaged in a UWA ineligible for Social Security disability benefits for the rest of their life! You probably didn't notice it but there was no Congressional hearing on the GAO report. Even Republicans figured out that the GAO report was a crock.
     If you're of a mind to believe that all government benefits programs do nothing but waste money you may want to believe that Social Security wastes billions of dollars just sending large checks to people at random but that's not the way the program works. Mistakes happen. Usually the mistakes take away money rather than bestowing it. Usually, the mistakes don't involve much money. Most of the mistakes are just the inevitable result of overworked human beings making mistakes running a complicated program. There's only so much you can expect Social Security to do about that especially when you the size of the agency's workforce is declining while its workforce is increasing.


Anonymous said...

Incorrect payments happen all the time. Unfortunately, there is a high percentage of claimants who do not question irregular disbursements and just decide to spend the money claiming they thought it was theirs (despite receiving a notice to the contrary). They see it as an interest free loan from the government in most cases and pay it back at $10.00 per month.

You really have to work for SSA and see these situations in person to get a true perspective of the ridiculousness that is our government. These articles just don't do them justice.

As to the blame, I think it can be attributed to three major factors. First, insufficient staffing, followed by the push to hit numbers rather than produce quality work. Finally, poor hiring practices by the Fed - REALLY POOR. Combine all these factors and mistakes like the one above are really not all that uncommon. The best part is when you call out a co-worker for a mistake like that and their response is something like: "Oh well, who cares. It's off my desk, let the next person take care of it".

Anonymous said...

Does ssa ever revisit a previously paid claim and determine the person should have been disabled earlier or receive additional payment? Or is it always administratively final?

Anonymous said...

Since SSA doesn't make the medical determination, the claimant must appeal the onset to have it looked at again.

Anonymous said...

SSA reviews claims to determine if payment amounts are correct (not to see if an earlier onset was appropriate, but whether the benefit amount should be increased, usually due to additional earnings).

The main problem is lack of proper safeguards and methods. Every year in November, any beneficiary who had earnings the year before (or the wage-earner had earnings if auxilliary benefits) will receive a letter stating their benefit has increased because of earnings the year before, what the new amount is, and when they can expect the check for the difference between what was paid and what should have been paid. Unfortunately, these letters are sent out automatically and no-one at SSA actually checks to see if the beneficiary is still entitled as a result of the earnings. If SSA would actually have its staff look into the cases of anyone whose benefit amount increases due to earnings, then a lot of mistakes would be caught quicker.

Also, despite what Charles says, overpayments of $10,000, $20,000, $30,000 or more are not uncommon. I have seen overpayments in the six digits because SSA failed to notice sizeable earnings (for example a $50,000 a year job) or took a decade to realize a person was ineligible.

Anonymous said...

My favorite was when my client got a high paying job after recovering from a horrific accident and after getting disability. In the days of paper checks, he went three months in a row to the DO to return the check and was told each time that when SSA sends you a check it is yours. Two years after that, SSA decides he has been working and that he owes over $30k to SSA.

Anonymous said...

Anonymous 9:40 you are so right. I used to be naïve and think our new hires wanted to learn the right way to process a claim so I would try to help them, give them POMS references, etc. Now I have realized that they couldn't care less if they process it right or wrong as long as it is off the list. Management doesn't want to know about it either. Sad.