Social Security Disability Overpayments

Social Security Disability Overpayments

Social Security disability made $1.3 billion in potentially improper disability payments to people who had jobs when they were supposed to be unable to work. The Government Accountability Office estimated that 36,000 workers got improper payments from December 2010 to January 2013. The numbers represent less than 1 percent of beneficiaries and less than 1 percent of disability payments made during the time frame. But GAO said the overpayments reveal weaknesses in Social Security’s procedures for policing the system.

The Social Security Administration said its accuracy rate for disability payments is more than 99 percent. But the agency noted that even small errors translate into big numbers. More than 8.2 million disabled workers received disability payments in December 2010, a figure that has grown to nearly 9 million. Last year, the agency paid out $137 billion in disability payments.

Before people can receive disability benefits, there is a 5-month waiting period in which they can, in general, earn no more than about $1,000 a month. The waiting period is to ensure that beneficiaries have long-term disabilities. Using a federal wage database, investigators checked whether a sample of disability beneficiaries had worked and earned significant wages during the waiting period, the report said. They found that most of the improper payments went to people who worked during the five months they waited for payments to begin.  Once people start receiving benefits, they can return to work and still get benefits during a trial work period.

Citing a potential weakness, the report said Social Security might not detect a person who worked during the waiting period if the period started in one year and ended in another. For example, if Social Security starts paying benefits in February, the agency might not detect significant wages earned the previous November because they weren’t earned in the same year that benefits were awarded, the report said.

In a written response to the report, the Social Security Administration agency questioned whether GAO overestimated the amount of overpayments. The report comes as the Social Security disability program faces a financial crisis. If Congress doesn’t act, the trust fund that supports the disability program will run out of money in 2016, according to projections by Social Security’s trustees. Congress could redirect money from Social Security’s much bigger retirement program to shore up the disability program, as it did in 1994. But that would worsen the finances of the retirement program, which is facing its own long-term financial problems.

For more information about Social Security disability contact Cary Social Security disability lawyer Kevin Bunn.

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