Social Security shelled out $17 bn in overpayments for disability benefits – study

 AFP Photo / Manjunath Kiran
Social Security’s own watchdog found waste, fraud and abuse in its disability program, citing cases where benefits had been paid to disqualified, imprisoned and deceased people. Over 15 million disabled Americans rely on the soon-to-be-insolvent program.

A 10-year study by the Social Security Administration Inspector General’s office found $17 billion in overpayments of disability benefits. Recipients were found to include people who earned too much to qualify for the program or were no longer disabled, as well as those deceased or in prison. Nearly half of the 9 million who received disability payments had been overpaid. The agency attempted to recoup about $8.1 billion, but it took years for the money to be returned, according to the study.

READ MORE: Nazi war criminal received over $20mn in US social security benefits - report

A spokesman for the Social Security Administration said the agency has high accuracy rates for payments and a comprehensive debt collection program for overpayments, according to the Associated Press.

Social Security provides services to over 48 million retirement and survivors beneficiaries and about 15 million disability beneficiaries,” Social Security spokesman Mark Hinkle said in an email to AP. “The agency will issue nearly $1 trillion in payments this year. For fiscal year 2013 — the last year for which we have complete data — approximately 99.8 percent of all Social Security payments were free of overpayment, and nearly 99.9 percent were free of underpayment.”

The study used a sample of over 1,500 randomly selected people receiving either Social Security disability or Supplemental Security Income (a separate program for the poor) in October 2002, and tracked the group for 10 years until February 2014. It found 45 percent of the beneficiaries were overpaid at some point during the period for a total amount of $2.9 million and estimates that Social Security made a total of $16.8 million overpayments during the 10-year period. Disability benefits amounted to about $14,000 a year or $1,165 a month.

The study said “the agency could do more to prevent the most common overpayments.”

In one instance a man continued to receive disability benefits under his father’s Social Security number while he was working and hiding his income. The man was convicted of fraud in 2005, and ordered by the judge to repay nearly $18,000. So far the agency has received $550.

READ MORE: 1 in 5 elderly Americans die broke

The trust fund that supports Social Security’s disability program is projected to run out of money in late 2016, triggering automatic benefit cuts of 19 percent, unless Congress acts.

Congress has been studying the issue for years, with Democrats arguing it keeps millions of disabled workers and their families out of poverty, and Republicans focusing on waste, fraud and abuse.

The program is likely to be a hot button topic during the 2016 presidential election.

Republican nominee for president, Senator Rand Paul (R-Kentucky), criticized the federal government back in January for not doing an adequate job policing a system he says needs reform, joking that “half the people on disability are either anxious or their back hurts.”

Join the club,” Paul said. “Everybody over 40 has a back pain.

Advocacy groups called the remarks offensive.

Social Security paid out $142 billion in disability benefits last year.