Some Overpayments Aren’t Worth Trying To Collect

      Social Security’s Office of Inspector General has issued a report on an investigation into the cost effectiveness of the agency’s efforts to collect small overpayments. Here’s an excerpt.

… Of the 250 low-dollar OASDI [Old Age, Survivors and Disability Insurance] overpayments we reviewed, SSA took actions on 50 (20 percent) that we did not consider cost-beneficial because it sent more notices to the overpaid individuals than required. Since SSA could not provide its average cost to send an overpayment notice, we applied the average cost to collect overpayments as reported in CAS during our audit period, and we did not consider it to have been cost-beneficial to recover these 50 overpayments. Specifically, we estimate SSA spent $14,492 to attempt to recover the 50 overpayments, which totaled $8,129. 

Projected to our population, we estimated SSA spent $4.6 million to recover almost 16,000 low-dollar OASDI overpayments totaling almost $2.6 million. Therefore, we estimate SSA spent about $2 million more than it would recover.  …