Social Security Administration Spends Three Times More Than it Collects Trying to Recover Overpayments

A report issued last week by the Office of the Inspector General (OIG) found that the Social Security Administration spent nearly three times as much as it took in to try to collect on mistakenly issued overpayments over the six year period ending in 2013.

The objective of the report was to analyze the cost-benefit of processing overpayments for the Retirement and Survivors Insurance, Disability Insurance, and Supplemental Security Income programs. Benefit payments greater than the amount to which individuals are entitled are considered overpayments. When the Social Security Administration (SSA) determines an individual has been overpaid, it generally initiates recovery actions regardless of the dollar amount.

The report noted that generally, SSA attempted to collect overpayments regardless of the amount, and in some cases, the value of the overpayment was less than what SSA spent to collect it. Based on OIG analysis using average cost data, they estimated SSA spent over $323 million to collect low-dollar overpayments in FYs 2008 through 2013. Using SSA’s overpayment collection percentages for these FYs, OIG estimated SSA collected approximately $109.4 million of the low-dollar overpayments. This resulted in SSA spending over $213.6 million more than it collected.

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