Social Security, already under significant financial pressure, has a staggering $23 billion in unrecovered overpayments.
Between Fiscal Years (FY) 2015 and 2022, the Social Security Administration (SSA) issued nearly $72 billion in improper payments, most of which were overpayments. This comes as the program faces a looming
financial crisis, with its trust funds projected to be depleted by 2035, potentially leading to a 25% reduction in benefits for millions of Americans.While improper payments represent less than 1% of the total benefits paid out during that period, the $23 billion in uncollected overpayments is a major concern for the SSA, according to its Office of the Inspector General (OIG). These overpayments—often the result of errors or beneficiary misreporting—highlight the agency’s struggle to maintain financial accuracy in its payments.
Since 2002, the OIG has flagged improper payments as a “major management challenge” and made dozens of recommendations for preventing and correcting them. However, despite repeated audits and advice, many of these recommendations remain unimplemented, which has exacerbated the SSA’s ability to recover funds and prevent future overpayments.
According to OIG audits, one of the primary reasons for improper payments is the SSA’s reliance on beneficiaries to self-report changes in their circumstances, such as income or living arrangements, which affect payment amounts. A lack of sufficient controls in the SSA’s automated and manual processes further complicates the issue. The OIG has urged the SSA to obtain more accurate data from external sources, such as other federal agencies and financial institutions, to better assess eligibility and payment amounts.
Despite these ongoing challenges, the SSA has made some progress. In October 2023, the agency began a comprehensive review of its overpayment procedures and is developing new systems to access third-party payroll data. This could reduce improper payments, particularly for beneficiaries who work while receiving benefits.
However, efforts to implement a new debt management product—intended to address several OIG recommendations—were halted in FY 2024 due to a lack of funding. This has left many critical issues unresolved, impeding the ability to recover overpayments effectively.
“Improper payments have been a longstanding challenge for SSA,” said Michelle L. Anderson, Assistant Inspector General for Audit and Acting Inspector General. “While the Agency has taken actions to address this challenge, it needs to do more.”
With Social
Security’s financial future hanging in the balance, addressing improper payments is crucial for the program’s solvency. Preventing and recovering overpayments won’t fully resolve the crisis, but it is a critical step in ensuring that Social Security can continue to provide for millions of Americans who rely on it for their livelihood.RELATED CONTENT: Mississippi Governor Sings Praises Of Ole Miss Counterprotesters After ‘Star-Spangled Banner’ Shenanigans