May 21, 2018

OIG Report On Disability Claimants Being Overpaid After They Return To Work

     From a recent report by Social Security's Office of Inspector General (OIG):
Using data extracted from the eWork system, we identified 4,504 beneficiaries from 1 segment of our data who completed a TWP [Trial Work Period] in Calendar Year 2012 and whose re-entitlement period ended in 2015.6 From this population, we selected a random sample on which to conduct detailed analysis. ...
Of the 200 sampled beneficiaries, SSA determined 97 had earnings that exceeded SGA after the TWP. Of the 97, SSA incorrectly paid 77. The Agency also incorrectly paid one beneficiary because it erroneously determined earnings had not exceeded SGA. In all, SSA incorrectly paid these 78 beneficiaries almost $1.3 million. Of the overpaid amount, SSA incorrectly paid
  • almost $446,000 because of its own processing delays and errors and
  • over $823,000 because of beneficiaries’ reporting failures. ...
We estimate SSA overpaid more than $571 million to over 35,000 beneficiaries who completed a TWP in 2012. Of the $571 million, SSA incorrectly paid almost $201 million because it failed to process work CDRs correctly or within its processing time goal and almost $371 million because beneficiaries failed to report their earnings, as required ...
     The OIG report assumes that if a claimant reported to Social Security that they had returned to work that the agency would have kept a record of that report. They're certainly supposed to but anyone who has experience in this field knows that many claimants insist that they did tell Social Security even though Social Security says that there's nothing in their records recording that. It's impossible to know for sure in each individual case but there are so many reports like this that no one at Social Security should feel confident about their process of recording reports of return to work. For a sign of the agency's fallibility, just look at how frequently they failed to act promptly even when they did record the report of return to work!
     I doubt that there's a foolproof solution to this problem. However, simplification of Social Security's work incentives would help. What's happened over the decades is that some member of Congress gets the bright idea that Social Security could reduce the number of people drawing disability benefits if they just gave them an incentive to return to work. Staffers try to tell the member of Congress gently that work incentives already exist but the member of Congress doesn't bother to study what already exist. They just insist that the staffers come up with a plan for new work incentives in the naive belief that one more work incentive will do the trick. That's how we end up with Expedited Reinstatement on top of the Extended Period of Eligibility on top of the Trial Work Period, supplemented by the concept of Impairment Related Work Expenses, not to mention Subsidized Employment, Unsuccessful Work Attempts, the separate blind standard for determining Substantial Gainful Activity and the near impossibility of determining whether self-employment is Substantial Gainful Activity! What did I leave out? Oh yes, there's some separate SSI work incentives. How many claimant understand any of this? For that matter, how many Social Security employees really understand this?

10 comments:

Anonymous said...

Every overpayment case I have worked on was a result of Social Security's incompetence or outright deception after each claimant made multiple work reports to the agency. The reports were made in person and either denied by the agency or redacted at the hearing level.

Anonymous said...

7:58 has never worked a TXVI workload for overpayments.

Anonymous said...

@7:58

Same here.

Anonymous said...

You can request proof at the time of providing that information for T2 related beneficiaries, they can receive a receipt directly through our the work program that is used to make Work CDR decisions. I'm sure it goes both ways, but there is also more to calling SSA and just saying "im not working".

Anonymous said...

I am finding increasing instances of FO inability to apply policy properly in work CDRs. I believe it is a combination of lack of training, loss of institutional knowledge, and excessive workload with too few employees. There is no development of subsidy or IRWE, and they fail to use averaging appropriately.

Anonymous said...

Cut the SGA levels in half. Will expedite processing at the hearing level and knock out folks who claim $12K in earnings a year to claim the EITC, and will get working recipients off the disability rolls faster.

Anonymous said...

Unfortunately policy makers are likely to take the wrong lesson from the report. If you want something like a work incentive system to work you have to do exactly what any merchant hawking goods or services has to do, namely, sell it effectively. Consumers will strongly tend not to buy products or services they are confused by and don't understand, and let's face it, the program is too complicated.

Also, every overpayment case the agency processes is like a negative advertisement that warns other beneficiaries away from the program. Do you think that people hit with overpayments (especially if they were not to blame) won't tell everyone they know about their bad experience? Imagine trying to sell a service by sending out thousands of spokespersons every year to communities across the nation to tell everyone about their bad experience with it. Consequently, any policy solution which results in increased overpayments and enforcement is just digging a deeper grave for work incentive program use.

Finally, the program has to actually work for the people trying it. Many years of observation has led me to believe there is only a small percentage of beneficiaries (low single digit %) who are likely to move off disability benefits through the use of work incentive programs. The others were put on benefits for a reason, namely, they can't realistically hold down substantial employment. Are work incentives still worth having for that small percentage of people who can benefit? Sure. If you make it understandable, fair, and don't keep driving them away from it.

Tim said...

More carrots, less stick.
If a donkey can understand this, why can't supposedly intelligent people? But, then the SNAP and Medicaid programs also at some point disincentivize increasing income. I have a disability pension from my former employer. If I made just $200, they would take my SNAP away ($150). At $460, they would take the SNAP and Medicaid. Then again, there aren't many jobs I could do at those levels, let alone sustain. Government needs to take a long view approach to this. They look at it as "How much is costing us this month, quarter.. " by allowing people to work short-term without penalty when they need to look at "How much will we pay over 10, 15, 20 years if we DON'T encourage them to work." In the short-term, it would cost SSA NOTHING to allow people to work more. In fact, it would increase FICA payments.

Anonymous said...

I don't think I have seen many work cessations where there wasn't some kind of overpayment. You can't cut them off until after they finish the TWP and work at SGA. You may have to verify wages because some folks under report their earnings (net or less than net). YOu could cut overpayments by getting more staff and being more aggressive processing work CDRs but that would mean folks that stop work or reduce to less than SGA may miss a check or two. A large number of folks don't report or fail to report when they go from 20 hrs a week to full time. I have waived a few OPs where the person reported timely and SSA did not process it timely but the majority of waivers I have seen the person worked off and on and didn't report much other than when they stopped working.

Anonymous said...

Overpayments are an inherent part of the complex scheme of work incentives prescribed by Congress. In addition, Republican Congresses exacerbate the problem by constantly underfunding SSA's administrative budget.