The Office of the Inspector General (OIG) has called on the Social Security Administration (SSA) to further investigate some instances of overpayment of benefits.
Specifically, the OIG is concerned about Old-Age, Survivors and Disability Insurance (OASDI) beneficiaries whose benefits may have been affected by state or local government pensions. In a July 30 letter to SSA Acting Commissoner Kilolo Kijakazi, Inspector General Gail S. Ennis suggests that the SSA investigate some instances of overpayment in particular, a proposal to which the SSA agreed.
The OIG’s Office of Audit reviewed the SSA’s response to an audit the OIG conducted in 2011 and the resulting report. The OIG’s objectives were to: (1) identify OASDI beneficiaries whose benefits may have been affected by state or local government pensions and (2) determine whether the SSA implemented the 2011 recommendations.
2011 Audit and Response
In the 2011 audit, the OIG estimated that the SSA overpaid approximately 24,900 beneficiaries a total of about $623.8 million. These beneficiaries, the OIG said, would receive approximately $869.9 million in additional overpayments over their lifetimes unless the SSA corrected these payment errors.
In 2011, the OIG recommended that the SSA “Pursue legislation and alternative approaches for electronically obtaining State and local government pension data to enable application of the WEP and GPO provisions.” It also recommended that the SSA “Evaluate characteristics of the beneficiaries we identified as overpaid to determine whether it is cost effective for the Agency to identify similar overpayments to beneficiaries with unreported pensions subject to WEP or GPO.”
Since then, the OIG says, the SSA recognized the WEP and the GPO as major causes of improper payments. It adds that the SSA’s budget overview and the federal budget proposals included legislative proposals for the SSA to enter into automated data exchanges with states and localities to obtain non-covered pension information for purposes of the WEP and the GPO. These proposed data exchanges, the OIG says, would have enabled the SSA to better detect unreported pensions and changes in pension amounts; however, the proposals went nowhere. The OIG also notes that the SSA conducted two studies that evaluated similar characteristics: the Office of Quality Performance’s Aspects of the Windfall Elimination Provision report and the Office of Quality Review’s Fiscal Year 2016 Government Pension Offset Report.
The Review
The OIG obtained an electronic data extract of 1,117 individuals who were receiving benefits as of August 2019. Their benefits were not adjusted for the Windfall Elimination Provision (WEP) nor the Government Pension Offset (GPO), but their wage histories indicated they may have earned a state or local government pension based on employment not covered by Social Security.
OIG researchers identified OASDI beneficiaries who may have been overpaid because the SSA did not reduce their benefits for non-covered pensions from state or local government work. Of the 100 beneficiaries they reviewed, the OIG says four could have been subject to WEP based on the pension administrators’ responses, and SSA may have overpaid them a total of approximately $88,000 in OASDI benefits. This occurred, they said, because two beneficiaries failed to report they received a state or local government pension, and SSA employees did not apply WEP to the other two beneficiaries. If SSA does not correct these payment errors, says the OIG, they estimate those beneficiaries will receive additional overpayments of approximately $86,000 over their lifetimes.
The OIG made one recommendation: that the SSA perform the follow-up needed to make WEP applicability determinations for the four beneficiaries they identified and collect overpayments, if appropriate. The OIG reports that the SSA agreed with the recommendation. The OIG adds that it plans to “fully assess SSA’s actions to address WEP and GPO issues” in a future audit.
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