Social Security may have overpaid $1.3 billion in benefits

The Social Security Administration might have improperly paid at least $1.29 billion in disability payments from 2010 to 2013, an audit released Friday by the Government Accountability Office found.

The possible overpayments were made to 36,000 individuals who worked too many hours to qualify for disability payments, the audit said. One beneficiary received $90,000 in improper payments. Other cases cited by the GAO ranged from $57,000 to $74,000.

The audit compared data from a new hires database to disability payments made by the agency. The GAO said the amount of improper payments was likely higher, but the true amount could only be determined by examining specific cases.

The GAO said overpayments were made to two types of workers. The first type was found to have worked during a five-month mandatory waiting period for benefits. The second type exceeded allowable earnings during a nine-month period in which a beneficiary is allowed to return to work.

The GAO recommended that the Social Security Administration, “to the extent it is cost-effective and feasible,” create a way to detect cases in which payments are made to individuals earning income that disqualifies them from the disability program.

For its part, the agency told the GAO it was committed to “improving payment accuracy,” although it voiced concerns that the methodology used to conduct the audit yielded inaccurate data.

Indeed, the margin of error in the audit was wide. The GAO said the dollar figure of the overpayments could be $352 million too high or low and that the error margin for the number of beneficiaries involved was plus or minus 7,000.

The 36,000 cases cited in the audit equal less than one-half of 1 percent of all disability payment beneficiaries.

Disability recipients must have suffered a physical or mental impairment that prevents gainful employment and is either terminal or expected to last more than a year. The average monthly payment to a recipient is just under $1,000.

There is a five-month waiting period during which monthly income cannot exceed $1,000 before an applicant can qualify for disability, as well as a nine-month trial period during which someone who is already receiving benefits can return to work without terminating his or her disability payments.

More than 10 million Americans received disability benefits totaling more than $128 billion in fiscal 2011. 

Also read: Brokers look to combat PPACA with disability sales

 

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