Social Security makes $8B in improper payments

WASHINGTON — The Social Security Administration made $6.5 billion in overpayments to people not entitled to receive them in 2009, including $4 billion under a supplemental income program for the very poor, a government investigator said Tuesday.

In all, about 10 percent of the payments made under the agency's Supplemental Security Income program were improper, said Patrick P. O'Carroll Jr., the Social Security inspector general.

Error rates were much smaller for retirement, survivor and disability benefits, which make up the overwhelming majority of Social Security payments, O'Carroll told a congressional panel.

"By any standard, the scope of these problems is considerable," said Rep. Charles Boustany, R-La., chairman of the House Ways and Means Oversight subcommittee. "Regardless of whether a payment occurs because of simple error or outright fraud, improper payments harm Social Security programs in the long term, jeopardizing benefits for those who may need them in the future. They also cost taxpayers billions of dollars each year."

With lawmakers working to reduce soaring budget deficits, President Barack Obama has directed agencies to reduce improper payments. Boustany's panel held a hearing on Social Security's improper payments Tuesday. O'Carroll said the agency is working to improve accuracy, but more must be done.

Throughout the federal government, improper payments totaled $125 billion last year, up from $110 billion in 2009, O'Carroll said. In 2009, only two other agencies — the Departments of Health and Human Services, and Labor — had more improper payments than Social Security, he said.

Social Security has improved the accuracy of its payments in each of the past three years, and is working on more improvements, said Carolyn W. Colvin, the agency's deputy commissioner.

"We pay nearly 60 million Americans who deserve to receive their benefits timely and accurately, and we deliver on that responsibility in nearly all cases," Colvin said in prepared testimony for Tuesday's hearing. "We are committed to minimizing improper payments and protecting program dollars from waste, fraud, and abuse. In keeping with President Obama's vision, we are also open and transparent about our improper payment situation and our efforts to improve that situation."

About 99.5 percent of all retirement and disability payments were accurate in 2009, O'Carroll said. In all, the agency made $660 billion in retirement, survivors and disability payments in 2009, including an estimated $2.5 billion in overpayments and $600 million in underpayments, O'Carroll said.

"While we are justifiably proud of our consistently high accuracy rate for (retirement, survivors and disability) payments, we recognize our responsibility to maintain and improve our performance," Colvin said.

She said policing the Supplemental Security Income program is more difficult because benefits can change each month based on changes in income and living arrangements. To qualify for the program, beneficiaries must be 65 or older, blind or disabled, and have very limited resources.

Couples can own a maximum of $3,000 in assets, including cash, stock, second vehicles and personal property. Homes and primary vehicles are excluded.

In 2009, the Supplemental Security Income program made payments totaling $48.3 billion, including an estimated $4 billion in overpayments and $800 million in underpayments.

O'Carroll said most of the overpayments went to people who didn't report all the property they owned.