A record-breaking backlog has increased improper Social Security Payments by over $1 billion!
The Social Security Administration (SSA) is dealing with an unprecedented record-breaking backlog of open cases, which led to an estimated $1.1 billion in improper payments to beneficiaries, according to a report by the SSA Office of the Inspector General (OIG).
The report revealed that, as of February, the backlog of pending actions reached a 5.2 million record. Among these, improper payment cases had an average processing time of 698 days, based on a sample reviewed by the SSA OIG.
Improper payments include both overpayments and underpayments, where beneficiaries receive more money than they should and where beneficiaries receive less than they are entitled to, respectively. The report estimated that if these cases were resolved immediately, around 528,000 beneficiaries would have been improperly paid a total of $534 million. However, as many cases remained unresolved for over 12 months, the improper payment total increased to $1.1 billion.
In an effort to reduce overpayments, the SSA recently introduced new policies to help beneficiaries resolve these issues more easily, relaxing the previous strict rules that required beneficiaries to repay 100% of the overpaid amounts. Despite these changes, delays in processing still leave the agency vulnerable to incorrect payments.
The findings of the SSA OIG report are based on the agency’s processing centers, which manage tasks such as appeal decisions, debt collection, record correction, and benefit processing. According to the report, the longer these cases remain pending, the longer beneficiaries may wait for underpayments, or they may receive overpayments that will need to be repaid later.
Improvements Rely on Consistent Funding
The SSA met its performance goals for processing pending actions in four out of six fiscal years between 2018 and 2023, as noted in the report. However, the agency fell short in two fiscal years due to unexpected staff reductions, increased workloads, and lower-than-expected overtime funding.
Dustin Brown, acting chief of staff at the SSA, wrote a letter in response to the SSA OIG report highlighting that the agency has the lowest staffing levels in 25 years, with over 650 fewer employees handling processing center workloads than eight years ago. Meanwhile, the number of beneficiaries relying on Social Security benefits has increased from about 64 million to almost 72 million.
The SSA has agreed with the report’s recommendations to develop a staffing and workload plan, create performance measures for pending actions, and set time frame targets to manage these workloads. However, Brown emphasized that the successful implementation of these recommendations hinges on “sustained adequate funding” for hiring, overtime, and technology improvements.
The SSA has been facing a “customer service crisis“, leading to long phone hold times, delays in disability determinations, and incorrect payments, according to Paul Van de Water, senior fellow at the Center on Budget and Policy Priorities. He warned that without sufficient funding, this crisis could worsen. Although a Senate proposal suggests increasing the agency’s budget for the fiscal year starting in October, a House proposal suggests cutting it.
“Everyone wants to get rid of these long processing delays, but as long as the budget is so tightly constrained, that’s going to be very difficult to do”, he said.