The Social Security Administration Makes Progress on Improper Payments, But Still Has Work to Do

In Fiscal
Year 2024, the Social Security Administration (SSA) paid over $1.5 trillion
in benefits in the Old-Age, Survivors, and Disability Insurance (OASDI) and
Supplemental Security Income (SSI) programs. SSA must be a responsible
steward of the taxpayers’ funds by minimizing the risk of making improper
payments and recovering overpayments. Even the slightest payment process
error can result in millions of dollars in improper payments—both overpayments
and underpayments—to beneficiaries and recipients. Preventing improper payments
is more advantageous than recovering them since the Agency must expend
additional resources to recover overpayments or process additional actions to
rectify underpayments.

Improper payments are a long-standing and significant problem in
the federal government.  On March 2,
2020, President Donald J. Trump signed the Payment Integrity
Information Act (PIIA) (P.L. 116‑117) to improve efforts to identify and reduce government-wide improper
payments.  Agencies are required to
report specific improper payment information in their annual financial reports
and actions it has taken, or plans to take, to recover and prevent future
improper payments.  Further, the law
requires Inspectors General to review their agencies’ improper payment
information and issue an annual report on compliance with applicable PIIA
criteria.

The SSA Office of the Inspector General’s
(OIG) annual audit report, The Social Security Administration’s Compliance with the
Payment Integrity Information (PIIA) Act in Fiscal Year 2024,
found the Agency complied with eight PIIA reporting requirements but did not comply with two in the SSI
program.  SSI provides monthly
payments to people with disabilities and older adults who have little or no
income or resources.

While
SSA has made progress implementing corrective actions for both the OASDI and
SSI programs, the Agency did not demonstrate improvements to payment
integrity or achieve its tolerable improper payment rate for the SSI program.
The SSI improper payment rate increased from 9.41 percent (approximately
$5.3 billion) in Fiscal Year (FY) 2019 to 10.62 percent
(approximately $6.5 billion) in FY 2023.

According to SSA, the Agency’s reliance on
self-reporting by beneficiaries, recipients, and their representative payees—who
are required to notify SSA when a change occurs affecting their SSI eligibility
or payment amounts—leads to many improper payments.  Failure to report these changes continues to
be a primary cause of overpayments. 

One of the leading causes of
overpayments to SSI recipients is recipients’ unreported resources in financial
accounts that exceed allowable amounts. SSA has tools, such as the Access to
Financial Institutions (AFI) program, to help identify excess resources.  Using AFI, SSA verifies alleged bank
account balances with financial institutions and searches for undisclosed
accounts at geographically relevant locations.  SSA uses AFI when it processes initial SSI
applications and periodic eligibility redeterminations.

However, according to SSA, in FY 2023, 89 percent of overpayments resulting
from excess resources in financial accounts occurred because of recipients’ changes
after SSA approved their initial SSI applications or completed eligibility redeterminations. 

OIG estimates SSA could have prevented approximately $2 billion in
overpayments in FY 2023 had it performed AFI searches between approving
recipients’ initial applications and completing redeterminations.

OIG previously recommended SSA conduct a study to expand the use
of AFI.  SSA has not implemented this
recommendation.

Read
the full report here.

Read the press release here.

Read more from the SSA: Read More