SSI overpaid billions to disabled poor

The federal government has overpaid billions of dollars in benefits to people who have been ruled disabled and impoverished, often because they understated their income. Debt because of overpayments has doubled over the past decade to $7.3 billion, according to a new government report.

And data reviewed by The Washington Times showed that the Social Security Administration (SSA) conducted fewer reassessments of claimants’ financial situations — which can detect such issues — last year than it did in every year prior to 2006, even as the Supplemental Security Income (SSI) rolls swelled from 5.8 million that year to 6.9 million.

In 2010 alone, the program paid out $40 billion and overpayments exceeded $3.3 billion. The government collected on less than half the new debts it detected that year.

Excess payments under the program for low-income disabled people continue largely because the government lacks sufficient means to verify whether applicants are telling the truth, said the Government Accountability Office report issued Friday.

Social Security bureaucrats have been lenient in recouping the money: When recipients request a waiver allowing them to keep the overpayments, they are granted 76 percent of the time, with the excess funds chalked up as a loss and not included in the overall debt.

SSI is a different and smaller program than Social Security Disability Insurance, which requires recipients to have paid into the system by working in the past, though many people collect from both. It requires persons to certify that they, including spouses, do not make more than $1,048 and have less than $3,000 in the bank. Under-reporting income or assets accounted for nearly 40 percent of the overpayments last year.

“SSA lacks comprehensive, timely information on SSI recipients’ financial institution accounts and wages,” the report said, “but has developed new tools” allowing the ability to periodically obtain recipients’ account balances from major banks to use in occasional reviews.

In January, for example, the new tool found that one supposedly impoverished claimant actually had six bank accounts with more than $25,000 in each.

Overpayments are generally simply deducted from subsequent payments, but “claims representatives, who are located in SSA’s more than 1,260 field offices, have the authority to unilaterally approve” requests to allow recipients to keep excess funds if they are under $2,000. SSA does not keep close track of who grants them and why.

Waivers are only supposed to be granted in cases in which the applicant was not at fault, yet “a high number of waiver requests were granted even though many recipients or their representative payees failed to fulfill their financial institution account and wage reporting responsibilities,” the report found. The number of waivers granted has increased nearly 40 percent over the past four years.

The agency estimates that every dollar spent on “redeterminations,” or periodic looks into the most risky beneficiaries’ financials, yields $6 in savings over a decade, and the report noted that it has stepped up redeterminations, conducting 136 percent more last year compared to 2007.

But SSA data reviewed by The Times indicated that 2007 represented a low water mark in the agency’s history for the reassessments, “due to limitations on administrative funding,” and the number last year was significantly lower than every year on record through 2005.