Social Security Paid Out $72 Billion in Improper Payments.

The Social Security Administration (SSA) has come under scrutiny after a recent report revealed that nearly $72 billion in improper payments were made over a seven-year period. The majority of these overpayments were made to beneficiaries, with a significant portion yet to be recovered. The SSA’s Office of the Inspector General (OIG) highlighted this issue as a "longstanding challenge" for the agency in a statement released on August 19.

According to the OIG, the SSA distributed almost $8.6 trillion in benefits between fiscal years 2015 and 2022. Of this massive sum, approximately $71.8 billion—or 0.84%—constituted improper payments. While this percentage may seem small, it equates to billions of dollars that were either overpaid or underpaid to beneficiaries. By the end of fiscal year 2023, the SSA still had a staggering $23 billion in uncollected overpayment balances.

The OIG's report underscores the complexity and scale of the SSA's payment process, noting that even minor errors can result in significant financial discrepancies. "SSA issues over $1 trillion in benefit payments annually. Even the slightest error in the overall payment process can result in billions of dollars in improper payments," the OIG stated.

To address this issue, the SSA has initiated several actions aimed at reducing payment errors. For example, the agency is developing an information exchange system that will allow it to access wage data from payroll processors, a move designed to minimize discrepancies. Additionally, in October, the SSA began reviewing its overpayment procedures, systems, and communications to identify areas for improvement.

Despite these efforts, the OIG report suggests that more needs to be done. The agency's assistant inspector general for audit, Michelle L. Anderson, emphasized that without better data access, increased automation, and systems modernization, the problem of improper payments is likely to persist. "Improper payments will continue to be a major challenge for SSA into the future," Anderson said.

Lawmakers have also expressed concern about the impact of SSA's improper payments on beneficiaries, particularly those facing financial hardship due to agency errors. Senators Maggie Hassan (D-N.H.) and Bill Cassidy (R-La.) urged the SSA to take additional measures to reduce overpayments and mitigate the impact on vulnerable recipients. In a letter to the SSA’s acting commissioner, they highlighted the "extreme financial hardship" faced by some beneficiaries when asked to repay overpayments, often due to agency errors.

In response, the SSA has implemented policy changes to ease the burden on overpaid beneficiaries. Previously, the agency would deduct 100% of a beneficiary’s monthly payments until the overpaid amount was recovered. Under the new system, this has been reduced to 10% of monthly benefits. Additionally, the SSA extended the repayment period from 36 months to 60 months and made it easier for beneficiaries to request a waiver of repayment.

SSA Commissioner Martin O’Malley emphasized the urgency of implementing these changes, stating, “We are undertaking that shift with urgency, diligence, and speed.”

Improper payments are not an issue unique to the SSA. A March report from the U.S. Government Accountability Office found that the federal government made $236 billion in improper payments during fiscal year 2023, with Medicare, Medicaid, and other programs accounting for a significant portion of these errors.

The ongoing issue of improper payments highlights the challenges faced by large federal agencies like the SSA in managing vast sums of money while ensuring accuracy and fairness in distribution.

Information sourced from EpochTimes.