Social Security Disability Overpaid By $17 Billion Over A 10-Year Period

Social Security Disability is in more trouble than it thought.

According to Fox News, Social Security’s Inspector General performed an audit last year, and found that for the last 10 years, Social Security Disability paid in excess of $17 billion, but was able to recoup only $8.1 billion after the error was discovered.

The audit also found that many of those who were overpaid made too much money to qualify for Social Security Disability in the first place. Also, payments were made to persons who were incarcerated in prison or had died.

“Every dollar that goes to overpayments doesn’t help someone in need,” said Sen. Chuck Grassley, R-Iowa. “Given the present financial situation of the Social Security Disability Insurance trust fund, the program cannot sustain billions of dollars lost to waste.”

A major issue is that the Social Security Disability fund is supposed to run out of funds by next year. Congress does have the capability to resolve this, but must act soon or the funds will not be available.

Social Security Disability’s issues go far beyond overpayments. For the past ten years, Social Security Disability paid out more than what was collected via payroll taxes. The overpayments and mismanagement create a far larger issue that must be addressed.

The Chicago Tribune is reporting that the government is well aware of the issue, but don’t have any ready answers.

“Overpayments are bad for everyone — they are bad for the beneficiary and they are bad for the taxpayer,” said Rep. Sam Johnson, R-Texas, chairman of the House Ways and Means subcommittee on Social Security. “With the disability program going broke next year, it is especially troubling that Social Security is failing to protect precious taxpayer dollars.”

The Social Security Administration has stated they have guidelines in place for these overpayment issues and collection of overpayments.

“The agency will issue nearly $1 trillion in payments this year. For fiscal year 2013 — the last year for which we have complete data — approximately 99.8 percent of all Social Security payments were free of overpayment, and nearly 99.9 percent were free of underpayment,” wrote Mark Hinkle, Social Security spokesperson, via email.

One possible fix for the fund is to channel more payroll tax collection from the retirement program, which is much larger and has been done before. Republicans, however, want to find a more permanent fix to the issue of Social Security Disability always becoming or nearing being broke all the time.

SSI has paid out in excess of $54 billion in benefits in fiscal 2014.

[Image courtesy of Larry H. Parker]