Social Security Administration’s Backlog of Payment Actions Leads to $1.1 Billion in Improper Payments

The Social Security Administration (SSA) is facing a significant backlog of pending actions, leading to a record-breaking level of improper payments to beneficiaries. This backlog, which reached 5.2 million as of February, has resulted in larger overpayments and growing underpayments to beneficiaries.

The backlog has put a burden on social security beneficiaries who may not be in a financial position to repay the overpaid amount. On the other hand, underpayments mean that beneficiaries do not receive their correct monthly payment, creating financial challenges for many recipients.

According to the SSA’s Office of Inspector General (OIG), the delay in resolving pending actions led to $1.1 billion worth of improper payments by February. This has raised concerns about customer satisfaction and the urgency for the SSA to reach its pending actions performance goal.

The SSA attributes the backlog to increased workload, staff reductions, and lower-than-expected funding for overtime. The agency acknowledges the need to reduce the backlog and processing delays but emphasizes that additional resources are required.

The OIG’s report highlights that the SSA failed to reduce its processing center pending actions over the past six years, resulting in a growing backlog. Of the actions analyzed, almost three-fourths remained pending for 300 days or more, with 43 percent unresolved for 500 days or longer.

The longer it takes for the SSA to process pending actions, the longer beneficiaries have to wait for underpayments or face larger overpayments that they need to pay back. In one instance, a beneficiary received $9,000 in excess money from the agency, but the SSA only took action to collect overpayments two years later when the amount had reached $62,000.

To address the issue of improper payments, the SSA has implemented certain measures. In March, the agency announced a new rule that eases the burden on overpayment recipients. Instead of withholding 100 percent of a beneficiary’s monthly benefits until the overpaid amount is collected, the agency now collects 10 percent or $10, whichever is greater, to recover overpayments.

Additionally, the SSA proposed a rule in February that aims to reduce manual reporting errors by using information from payroll data providers. This proposed Payroll Information Exchange is expected to not only reduce errors but also lower the rate of improper payments.

Overall, the backlog of pending actions at the SSA has resulted in a significant increase in improper payments to beneficiaries. The agency acknowledges the need for additional resources to address this issue, and they have taken steps to ease the burden on overpayment recipients. Implementing new rules and leveraging payroll data can help reduce errors and improve payment accuracy in the future. However, it is crucial for the SSA to prioritize resolving pending actions promptly to ensure that beneficiaries receive their proper payments in a timely manner.