OIG Report On Use Of Averaging When Determining SGA

     From a recent report by Social Security's Office of Inspector General (OIG):

When a disabled beneficiary has earnings from work activity, SSA conducts a work continuing disability review (CDR) to determine whether the beneficiary engaged in SGA. SGA describes a level of work activity and earnings. Work is “substantial” if it involves significant physical or mental activities and earnings exceed the SGA threshold. The Code of Federal Regulations states SSA can average earnings for a period of work when it determines whether a disabled beneficiary engaged in SGA. During the period for which SSA averages earnings, the beneficiary must have worked continuously, without a significant change in work pattern or earnings. SSA has not established a monetary earnings amount that represents a significant change. However, policy directs staff to consider whether the beneficiary changed positions, job duties, or hours when determining whether a significant change occurred. If SSA finds the beneficiary’s monthly earnings average is below the SGA threshold, it pays benefits for all months. ...

Of the 200 sampled beneficiaries, we identified 58 for whom SSA applied averaging inconsistently or incorrectly when it made SGA determinations. Of these, SSA made questionable payments to 51 based on its SGA determination. SSA issued or withheld payments totaling over $651,000 because it did not apply averaging provisions consistently. As a result of the questionable determinations, SSA

• paid benefits, totaling more than $607,000, to 40 beneficiaries and
• withheld benefits, totaling more than $44,000, from 7 beneficiaries. 

SSA’s policy allows employees to exercise their own judgment and discretion when deciding whether to average earnings. As a result, the policy for averaging earnings results in decisions that are not consistent and equitable among beneficiaries.We estimate SSA applied averaging provisions inconsistently tomore than 30,000 beneficiaries. This led to questionable benefit payments or withholding totaling almost $419 million.

     I'm sympathetic to the agency on this one. I don't see how they can come up with truly objective standards nor how they can ensure completely consistent application of any standard. These are just difficult to do. Almost always you have limited information about the exact dates of earnings. The earnings are often highly variable. The regulations have to give agency employees discretion to deal with the million and one situations that come up but whenever you give discretion you're going to have people applying the rules in differing ways. OIG can come in after the fact and say that you should have done something different in many cases but it's not like OIG's judgment is the gold standard. If anything, I'd trust the field office staff to make the right judgment calls more than I'd trust OIG personnel who don't do this kind of work on a regular basis.