$1.29 Billion in Disability Checks Sent to 36,000 Workers Still on the Job

September 17, 2013 - 10:53 AM

Social Security-Disability

FILE - In this Friday, Jan. 11, 2013 file photo, the Social Security Administration's main campus is seen in Woodlawn, Md. U.S. House investigators say Social Security is approving state-rejected claims for disability benefits at strikingly high rates for people who might not deserve them. Compounding the problem, the agency often fails to do required follow-up reviews to make sure people still qualify for benefits months or years later. (AP Photo/Patrick Semansky, File)

(CNSNews.com) – Since January, the Social Security Administration (SSA) sent disability insurance (SSDI) checks worth $1.29 billion to an estimated 36,000 people who were still on the job and thus ineligible for benefits, according to a Government Accountability Office (GAO) report released Friday. (See GAO -13-635.pdf)

SSDI is meant to provide monthly cash assistance to workers whose mental or physical illness prohibits them from being gainfully employed long-term. “Some work activity indicates beneficiaries are not disabled and therefore not entitled to [SS]DI benefits,” the report stated.

Beneficiaries are not entitled to SSDI benefits if they earn over $1,000 per month during the program’s five-month waiting period, which is meant “to permit most temporary disabilities to be corrected,” or if they continue working “beyond the program’s trial work period” of nine months.

The overpayments, most of which occurred during the waiting period,  were sent to less than one percent of SSDI’s 8.3 million beneficiaries.

A physician who had been earning $22,000 a month was also collecting $2,500 in monthly SSDI benefits during a three-year period, for a total potential overpayment of $90,000, the GAO reported.

Another man with “personality disorders” began working just one day after his disability benefits were approved in 2006. After reviewing the case in 2011, SSA suspended his monthly cash benefits “and subsequently assessed an overpayment of more than $57,000 due to his work activity” during the five years he was receiving disability checks.

But “SSA officials were unable to explain why a CDR [Continuing Disability Review] was not performed until 2011,” GAO auditors noted. CDRs cross-check SSDI recipients with earnings data collected by the Internal Revenue Service.

Just a month later, that same beneficiary “applied to have his benefits reinstated, and fraudulently affirmed that he did not have substantial earnings from work,” the report said. “We found no evidence in SSA’s files that SSA had contacted the beneficiary’s employer to confirm his statement before approving his benefits” again in May 2013.

The GAO report noted that it is currently withholding $75 per month from the man’s paycheck, but that “it would take 63 years” for SSA to fully recover the $57,000 overpayment it made to him, “at which time the beneficiary would be well over 100 years old.”

The SSA’s “enforcement operation does not generate alerts for earnings that occur in all months of the waiting period, which allows potentially disqualifying work activity to remain undetected,” the report stated.

Overall, “medical and work-related overpayments... grew from about $860 million in fiscal year 2001 to about $1.4 billion in fiscal year 2010,” according to the report. They amounted to 1.27 percent of the $128 billion in SSDI cash benefits sent to more than 10 million people in fiscal year 2011.

The SSDI program, which is the nation’s largest cash assistance program for disabled workers, is poised to grow even bigger as the baby-boom generation ages.

The report criticized SSA’s process for "identifying disqualifying work activity," which "allowed [SS]DI overpayments to remain undetected and accrue,” noting that on many occasions the agency “did not obtain timely earnings information and did not act promptly when it did receive earnings alerts.”

In response to the GAO’s recommendations that the SSA modify its enforcement operations to prevent future overpayments, agency officials cited “resource constraints” as obstacles contributing to delays and “expressed concern that modifying its existing enforcement operation may be costly.” However, SSA “has not assessed either the costs of such a modification or the additional program savings it might realize should such a change be implemented,” GAO reported.

CNSNews previously reported that the SSA was responsible for $7.9 billion in improper Social Security payments in fiscal year 2012.