- The Washington Times - Wednesday, August 18, 2004

A federal audit estimates that the Social Security Administration overpaid nearly $3.2 billion in disability benefits since 1996 to people who were working and that it failed to detect almost $1.4 billion of the amount overpaid.

The purpose of the yearlong audit by the inspector general’s office for SSA was to determine how effective Social Security was in tracking work activity of recipients of Old Age, Survivors and Disability Insurance to find out whether these beneficiaries still qualified for payments.

“Individuals may no longer be entitled to disability benefits if their impairments improve or they demonstrate their ability to engage in substantial gainful activity by working,” said the audit, released last month.

The report pointed out that recipients of Title II disability benefits — about 6.5 million people — are “required to report work activity” but “often fail to report their earnings.”

Consequently, SSA must to compare the Master Earnings File, which logs all U.S. workers, to those receiving Title II benefits.

In its review of 275 sample cases of beneficiaries who had earnings reported to the MEF from 1996 to 2000, the audit found that SSA analyzed only 59 percent.

Based on that sample, and the assumption that overpayments persisted, the IG’s office estimated that 171,620 beneficiaries nationwide were overpaid $3.15 billion in disability benefits from 1996 to 2004 because of work activity.

“Further, we estimate that SSA had identified $1.78 billion in overpayments for about 117,329 beneficiaries. However, we estimate $1.37 billion in overpayments to approximately 63,000 beneficiaries went undetected by the agency,” the audit stated.

The IG’s report said SSA should focus “additional attention” on the problem of work-related overpayments. It recommended that the agency review past cases “where significant earnings are present on the MEF,” and no determination has been made as to whether they represented “trial work” or permanent employment.

The IG auditors also recommended that “future earnings enforcements are adequately controlled by management and resolved in a timely manner.”

Carolyn Cheezum, an SSA spokeswoman, said the agency agrees with the recommendations in the audit, but had no comment on the estimates of overpayments.

Mrs. Cheezum also would not say whether SSA will go after the total number of estimated overpayment cases.

However, she cited various methods the agency uses to collect.

“First of all, we notify the person and attempt to collect directly.”

Starting next year, Mrs. Cheezum said, SSA will be able to garnish wages of some who are overpaid.

And if someone comes back on the rolls, either through disability or receipt of Social Security at retirement, “we will pursue collection of the overpayment,” she said.

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