Double-Dipping on Social Security Benefits

A recent investigation by the Government Accountability Office (GAO) found both federal employees and commercial vehicle drivers/company owners may be defrauding Social Security to the tune of millions of dollars. Those suspected of fraud are receiving disability benefits while at the same time earning incomes above the threshold set by the program.

You can work and get Social Security Disability benefits , but your income must not exceed certain thresholds, as in the GAO case.

The GAO matched federal payroll data and driver/carrier records with benefit information from Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). SSDI provides benefits for disabled workers and their families. SSI provides additional income for elderly or disabled individuals with limited resources. Both programs are administered by the Social Security Administration (SSA). Some individuals are allowed to work and still receive benefits, so further investigation is needed to establish if there was fraud or improper payments in specific cases.

In 2008, SSA paid out $142 billion in benefits for SSDI and SSI. Given the large scale of these programs it is critical that effective fraud controls are in place.

Examples of Abuse

The GAO report showed that 1,500 federal employees may have wrongly received benefits totaling $1.7 million each month. Considering the federal government should know who is on its own payroll, these case have caused the most outrage.

A Transportation Security Administration screener received about $108,000 in overpayments after she became a full-time employee in 2003 and earned a salary higher than permitted for beneficiaries. She currently lives in a house listed on the market for $1.8 million. In another example, a Social Security Administration legal assistant hired by the agency in 2007 received $11,000 in overpayments. Ironically, SSA did not have information regarding her disability in its files.

The report attributed some of the overpayments to fraud and others to administrative error, but the numbers should be kept in perspective. Potential overpayment to 1,500 employees out of a federal workforce of two million is a relatively small proportion. (In fact, the SSA Commissioner described the GAO report as flawed and inflammatory.)

Recommendations to Prevent Overpayments

The GAO suggested that the SSA improve its automated system to catch overpayments. Currently the SSA does not match its records against the federal payroll. Doing so would enable officials to check whether workers are improperly receiving benefits because of the amount of their earnings. Implementing measures such as this will serve to limit abuse and assure funds are available for those who truly need assistance.