There are overpayments and future benefit cuts

social security, already below significant financial pressures, has a staggering $23 billion in unrecovered overpayments.

Between fiscal years 2015 and 2022, the Social Security Administration (SSA) made nearly $72 billion in improper payments, most of which were overpayments. This comes amid a looming financial crisis wherein trust funds are expected to be depleted by 2035, potentially resulting in a 25% reduction in advantages for thousands and thousands of Americans.

Although improper payments represent lower than 1% of total advantages paid during this era, $23 billion in uncollected overpayments pose a major problem for SSA, in accordance with the Office of Inspector General (OIG). These overpayments – often the results of errors or misreporting by beneficiaries – highlight the agency’s efforts to keep up the financial accuracy of its payments.

Since 2002, OIG marked inappropriate payments as a “major management challenge” and made dozens of recommendations for stopping and correcting them. However, despite repeated audits and advisories, a lot of these recommendations remain unimplemented, which has impaired SSA’s ability to recuperate funds and prevent future overpayments.

According to OIG audits, one in all the major causes of improper payments is SSA’s reliance on beneficiaries to self-report changes of their circumstances. resembling income or housing conditions that affect payment amounts. The lack of sufficient controls in SSA’s automated and manual processes further complicates matters. The OIG urged SSA to acquire more accurate data from external sources, resembling other federal agencies and financial institutions, to raised assess eligibility and payment amounts.

Despite these ongoing challenges, SSA has made some progress. In October 2023, the agency began a comprehensive review of its overpayment procedures and is developing latest systems to access third-party payroll data. This could reduce improper payments, especially for beneficiaries who work while receiving advantages.

However, efforts to implement a brand new debt management product – intended to deal with several OIG recommendations – were halted in fiscal 12 months 2024 as a result of lack of funding. This leaves many key issues unresolved, making it difficult to effectively recuperate overpayments.

“Improper payments have long been a challenge for SSA,” said Michelle L. Anderson, deputy inspector general for audit and acting inspector general. “While the Agency has taken action to address this challenge, it must do more.”

With Social Security’s financial future hanging within the balance, addressing the issue of improper payments is critical to this system’s solvency. Preventing and recovering overpayments won’t fully solve the crisis, however it is a critical step in ensuring that Social Security can proceed to offer a living for the thousands and thousands of Americans who depend on it.