Social Security's Inspector General Is A Disgrace

     From Lisa Rein at the Washington Post:

The Social Security Administration’s internal watchdog office failed to properly notify some poor and disabled Americans before levying huge fines on them, an investigation by an independent watchdog agency found.    

The two-year probe into a little-known anti-fraud program discovered particularly stark due process violations starting in 2018, with investigators finding no evidence that the government ever sent written notice to some of those hit with massive penalties, which at times reached more than $100,000. Even when the inspector general’s office, which runs the program, did send notification letters in previous years, investigators found it often failed to properly serve people with notice of the proposed fines. ...

[The investigators] took the unusual step of urging the Social Security Administration to review every penalty the government has issued under the Civil Monetary Penalty program since 1995, to notify claimants who were fined and to take “corrective action.” ...

More Details On Plan To Reduce Overpayment Harshness

     From a press release:

Social Security Commissioner Martin O’Malley today announced he is taking four vital steps to immediately address overpayment issues customers and the agency have experienced. ...

1. Starting next Monday, March 25, we will be ceasing the heavy-handed practice of intercepting 100 percent of an overpaid beneficiary’s monthly Social Security benefit by default if they fail to respond to our demand for repayment. Moving forward, we will now use a much more reasonable default withholding rate of 10 percent of monthly benefits — similar to the current rate in the Supplemental Security Income (SSI) program.
2. We will be reframing our guidance and procedures so that the burden of proof shifts away from the claimant in determining whether there is any evidence that the claimant was at fault in causing the overpayment.
3. For the vast majority of beneficiaries who request to work out a repayment plan, we recently changed our policy so that we will approve repayment plans of up to 60 months. To qualify, Social Security beneficiaries would only need to provide a verbal summary of their income, resources, and expenses, and recipients of the means-tested SSI program would not need to provide even this summary. This change extended this easier repayment option by an additional two years (from 36 to 60 months).
4. And finally, we will be making it much easier for overpaid beneficiaries to request a waiver of repayment, in the event they believe themselves to have been without any fault and/or without the ability to repay. ...

    You may recall that on January 4 I posted on What Can Social Security Do About Overpayments If It Really Wants To? There's much similarity between what I posted then and what the Commissioner announced. I doubt that my post had anything to do with what Social Security decided to do. Both they and I were looking at statutes and regulations to see what could be done about the overpayment problems that were on the news and on the minds of members of Congress. We both came to much the same conclusion that there was plenty that could be done, especially with the "against equity and good conscience" provision in the statute. 

    By the way, I've read comments saying that Social Security is required by statutes and regulations to collect 100% of the benefits of an overpaid individual until they collect the overpayment, making the Commissioner's announcement illegal. Look at what I posted on January 4. There's ample wiggle room to default to a 10% repayment schedule as the Commissioner announced. It's pretty straight forward.

O'Malley Testimony To Senate Aging Committee -- And Note The Overpayment Changes

     Social Security Commissioner Martin O'Malley testified before the Senate Aging Committee today. Here's are some excerpts from his written testimony (emphasis added):

...Currently – due to the extended continuing resolution (CR) that we are under in FY 2024 – we have stopped all hiring, and our staffing levels have already fallen below where they were in April of last year. If we continue this path of no hiring, we will fall to a new all-time low of around 55,000 full-time permanent staff by the end of this fiscal year – nearly 11 percent lower than the roughly 62,000 full-time permanent staff we averaged from 2010 through 2019.

Similarly, the State disability determination services (DDS) were able to make some progress increasing their staffing levels in FY 2023, following years of record-high attrition and a historically low staffing level in FY 2022. But in FY 2024, the DDS have quickly dropped below last year’s staffing levels due to our pause in hiring given the funding level, which is leading to a severe setback in addressing a service delivery crisis. ...

Members may be surprised to learn that Social Security has now been reduced to operate on less than one percent of its annual benefit payments. This is extremely low – much lower than private insurance companies. For instance, Allstate operates on 19 percent of its annual benefit payments, and Liberty Mutual operates on nearly 24 percent of its annual benefit payments. ...

Under the current system, Social Security’s operating overhead, as a share of benefit outlays, has shrunk by 20 percent over the last ten years. ...

People who try to reach us by phone are now waiting on hold for 38 minutes or more on a dysfunctional 800 Number system. ...

Starting next Monday, March 25, we will be ceasing the heavy-handed practice of intercepting 100 percent of an overpaid beneficiary’s monthly Social Security benefit by default if they fail to respond to our demand for repayment. Moving forward, we will now use a much more reasonable default withholding rate of 10 percent of monthly benefits — similar to the current rate in the SSI program.

We will be reframing our guidance and procedures so that the burden of proof shifts away from the claimant in determining whether there is any evidence that the claimant was at fault in causing the overpayment. ...

Ways And Means Committee Schedules Hearing With Commissioner

     The House Ways and Means Social Security Subcommittee and Work and Welfare Subcommittee (which has jurisdiction over Supplemental Security Income) have scheduled a joint hearing at 2:00 on March 21 to hear from Social Security Commissioner Martin O'Malley.

    Whoever scheduled this can't be much of a sports fan. March Madness, y'all! Can't wait to get my brackets busted.

Some Help On SSI Payment Backlogs

    From Emergency Message EM-24009:

... Since May of 1992, a prepayment review is required for any SSI case (initial or post eligibility), if an underpayment (UP) of $5,000 or more is due through the month prior to the current computation month (CCM) as per SI 02101.025 - Basic Requirements of Supplemental Security Income (SSI) Underpayment (UP) Review (ssa.gov). Effective 03/16/2024, the amount of an SSI underpayment that requires a prepayment review will increase from $5,000 to $15,000. ...

    This should help reduce the SSI workloads a bit. The SSI effectuation backlogs are a major problem.

    I wonder whether something like this is planned for the Title II payment centers. Certainly the larger payments are a source of major delay. If you've been a high wage earner you could be looking at many months of delay before you're paid your back benefits. Would they announce that sort of change? Emergency messages generally don't concern truly emergent matters. They concern matters the agency believes are important -- that they want the public to be aware of. The agency isn't all that consistent in what it announces via EMs.

A Theory

     I've been thinking about that post yesterday concerning a man who visited a Social Security field office to obtain a replacement Social Security card. He was given a sheet containing a telephone number he could call to get the card replaced. He called the number and found that it wasn't Social Security on the other end but a scammer. The number on the sheet was one digit different from the real number he should have called.

    My initial thought was that someone at the Social Security field office must have been in cahoots with the scammers but one fact kept drawing my attention -- the number the man was given to call was only one digit different from the real number. If you had someone on the inside who was funneling calls to you, why would you go to the trouble of obtaining a phone number so similar to the real one?

    Let me posit a theory for what happened. Nobody at Social Security was in cahoots with the scammers. The number on the sheet was a simple typo. What had happened was that scammers had obtained as many telephone numbers as they could that were one digit different from the real number. Probably they did this for many offices. They could then expect a steady stream of misdials from people who thought they were talking with a Social Security office. By chance, the sheet handed out by Social Security funneled more calls to them but it wasn't part of their scheme. Actually, the typo may end up exposing their scheme.

    That's my theory. Have you got a better one?

What Happened Here?

      From The Intercept:

“We need to let you know you have been selected for $100 in rewards.”

It was a cheery automated message, not what I expected when I called the number for the Social Security Administration’s primary office in Manhattan. The message went on: “Simply press 1 now to be connected to a live agent and claim your gift today.”

I double-checked the number, which a Social Security employee had just given me at the agency’s local office in Harlem in late February. I needed to replace a lost card, which was a service only offered at certain locations, the agent told me. He slid me a flyer and circled the contact information for the office in the Financial District in Manhattan.

“You can call this number to try making an appointment,” the agent told me.

Still sitting in the lobby of the Harlem building, I dialed the number a couple more times, and each time reached a different grifter: I was eligible for another $100 gift card to Walmart, then help getting “free insurance.” I just had to hand over my name and address, to “confirm you’re eligible,” one scammer said. …

Still sitting in the lobby of the Harlem building, I dialed the number a couple more times, and each time reached a different grifter: I was eligible for another $100 gift card to Walmart, then help getting “free insurance.” I just had to hand over my name and address, to “confirm you’re eligible,” one scammer said. … 

Reached for this story, Social Security employees at the Harlem office did not answer detailed questions about how this version of the flyer came into existence. “We were made aware” of the scam number on the flyer, one ticket agent said, “and that’s why we stopped giving those out. … 

On closer inspection, the scam phone number was off by a single digit from the real direct line to the Manhattan Social Security office, and the phone numbers for other offices were legitimate….

SSA Employee Charged With Embezzling $1.8 Million

     From a press release:

On March 6, 2024, a federal grand jury in the District of Puerto Rico returned a 17-count indictment charging Myrna Faria, a.k.a. Myrna Oliveras-Santiago, with theft of government funds ...

According to court documents, Faria was employed by the Social Security Administration (SSA) from approximately 1991 through 2019 as a “Social Insurance Specialist” and “Claims Specialist” working in the Workload Support Unit in San Juan, Puerto Rico. From March 2012 through March 2024, Faria embezzled and stole SSA funds, namely Retirement Insurance Benefits, Survivors Insurance Benefits and Auxiliary Benefit payments, to which she knew she was not entitled. In total, Faria stole approximately $1,812,455.10. ...

Faria utilized her position within SSA to submit false claims on behalf of others, using the identity of individuals she believed to be deceased. She then approved those false claims and submitted her own bank and address information to fraudulently receive the corresponding SSA beneficiary proceeds. Faria proceeded to withdraw, transfer, and spend the money from the accounts that fraudulently obtained the SSA funds. Over the span of twelve years, Faria submitted and approved 13 fraudulent claims. A total of 10 fraudulent claims were still active and receiving funds as of the date of the Indictment. ...