Social Security employeeswere not properly advising widows and widowers on their benefits, areport has found. (Photo: Shutterstock)

Employees of the Social Security Administration have been asleepat the wheel when advising widows and widowers of the enhancedbenefits that come with delaying claims to full retirement age,according to a report from the agency's Inspector General.

According to the report, an estimated 11,123 beneficiaries wereeligible for higher benefits had they delayed claims until age70.

The misinformed filings resulted in about $131.8 million inunderpayments to beneficiaries age 70 and older, and another $9.8million in annual payments for those under age 70.

“SSA policy states its employees must explain the advantages anddisadvantages of filing an application and the filingconsiderations so the claimant can make an informed filingdecision,” the IG's report says.

But the agency's employees did not meet those obligations. “Wedid not find any evidence in the Agency's automated system tosupport the claimant's decision to elect to file for retirementbenefits, as required,” the report added.

The report also found that SSA did not have controls in place toalert employees as to when delaying benefits was in applicants'best interest.

The findings in the report were based on a sample of 50beneficiaries, 82 percent (41 individuals) of whom were eligiblefor a higher monthly benefit had they delayed claiming theretirement portion of their benefits until after age 70.

For the seven beneficiaries under age 70 that inadvisablyclaimed early in the SSA's sample, the loss in benefits will besubstantial. Upon reaching age 70, the average loss in benefitswill be $5,185—annually.

When widows or widowers are entitled to benefits that exceedtheir individual retirement benefits, they have the option ofdelaying filing for the retirement portion of their benefits untilage 70 in order to receive a higher monthly benefit. They can filelimited claims that allow access to the widow benefit before age70.

In one example, a beneficiary was paid retirement and widow'sbenefits after filing an application in January of 2011, six monthsbefore her 66^th birthday.

From August of 2015, when she turned 70, to September of 2017,she was paid total benefits of $39,708. Had she delayed herretirement benefit until age 70, she would have been entitled toanother $13,000 in benefits during that period.

“We did not find any evidence that SSA employees informed thewidow about her option to delay her retirement application up toage 70 to increase her retirement benefits,” the report says.

The decision when to file for benefits belongs solely toclaimants, the report notes. But SSA policy requires employees toelectronically document when unfavorable filing decisions aremade.

The IG recommends that the agency “take action” regarding the 41beneficiaries in the sample that received lower benefits due toinaction from agency employees, though it did not say whether thataction would include repaying benefits that were lost.

Nor is it clear if SSA has the discretion to make upwards of$140 million in payments to widows who may not have been adequatelyadvised by agency staff, or if Congress would be required toauthorize those payments.

“We are currently developing our action plan that responds tothe recommendations,” said a spokesperson for SSA.

The IG's report also recommends reviewing the remaining 13,514beneficiaries that are potentially impacted from early filings, andexploring new controls to assure beneficiaries are informed of theoption to delay retirement portions of benefits.