Social Security Pays Wrong People $22.8 Million: Fed Report
A new report reveals that the Social Security Administration (SSA) has mistakenly paid out over $20 million in benefits to the wrong individuals. An audit conducted by the Office of the Inspector General (OIG) uncovered that the SSA incorrectly distributed $22.8 million in benefits to incorrect payees through its Electronic Representative Payee System (eRPS). This web-based application is designed to process representative payee applications and maintain all associated information.
What Are Representative Payees?
Representative payees are typically family members or friends who receive and manage Social Security or Supplemental Security Income payments on behalf of beneficiaries unable to handle their own finances, such as children or individuals with severe disabilities. The audit indicates that inaccurate payee information within the eRPS system contributed to these errors, as employees must manually transfer data from the system to payment records.
Issues with Data Management
The report highlights that while the eRPS alerts employees when discrepancies arise between the application and payment records, there is a failure to adequately review these records after processing payee applications. This oversight is compounded by the necessity for manual intervention, leading to an increased risk of errors when controls are inadequate.
Additionally, the audit found that the SSA incorrectly recorded the types of payees for around 9,300 beneficiaries. As a result, the agency either failed to obtain necessary accounting reports or received unnecessary reports from approximately 3,900 payees. Each year, representative payees are required to complete a form to account for the benefits received on behalf of the beneficiary.
Risk of Misuse of Benefits
The report warns that without improvements to the system, the SSA will continue to issue benefits to incorrect payees without sufficient oversight. This situation raises the risk that benefits intended for beneficiaries may be misused, ultimately failing to meet the beneficiaries’ needs.
Recommendations for Improvement
In response to the findings, the OIG has recommended that the SSA review beneficiaries with payee discrepancies and remind staff about proper application processes. The SSA has acknowledged these recommendations and has agreed to implement them.
Ongoing Issues with SSA Payments
The SSA is already facing challenges related to incorrect payments, including overpayments and underpayments—situations where recipients receive either too much or too little money due to miscalculations. Newsweek has previously reported on various cases where elderly and disabled beneficiaries were confronted with repayment demands, sometimes amounting to tens of thousands of dollars. Some individuals have been required to repay the full amount within 30 days of receiving notice from the agency, even if the overpayment was not their fault.
The ongoing challenges underscore the necessity for improved management and monitoring of Social Security payments to ensure beneficiaries receive the support they need without undue financial stress.
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