Disability Insurance: SSA Could Do More to Prevent Overpayments or Incorrect Waivers to Beneficiaries
Highlights
What GAO Found
From fiscal years 2005 through 2014, GAO found that Social Security Administration (SSA) overpaid $11 billion in Disability Insurance (DI) program benefits to beneficiaries who had returned to work and had earnings above program limits, and about $1.4 billion in overpayments related to work activity was waived—because the beneficiary was found not at fault—and therefore will not be repaid. SSA recently conducted two reviews to identify the extent of overpayments caused by errors in processing work reports; however, both reviews used sample sizes too small to produce reliable results—limitations which SSA did not note in its reports and that may impede SSA's understanding of root causes of overpayments.
SSA's process for handling work reports by beneficiaries has internal control and other weaknesses that increase the risk of overpayments, even when DI beneficiaries follow program rules and report work and earnings, including:
- Processing weaknesses. Due in part to unclear guidance, GAO found that SSA staff may bypass established procedures and not: (1) initiate tracking of work activity, which would help prevent overpayments; and (2) issue a receipt to the beneficiary—as required by law—that proves the beneficiary's work was reported. Data are not available to determine the full extent to which this might occur.
- Limited oversight. While SSA tracks timeliness of staff action on work reports, it lacks procedures for how staff should screen such reports, and for ensuring that work reports are systematically reviewed and closed with appropriate action.
- No automated reporting options. In contrast to SSA's Supplemental Security Income (SSI) program—a means-tested disability benefits program—the DI program lacks automated tools to report work, such as an automated telephone system and a smart phone app. Although SSA officials said there is an internal proposal to automate DI work reports, they could not provide specifics on how or when this would occur. Without automation, SSA's current manual approach is vulnerable to error.
SSA's processes for handling requests to waive overpayments lack sufficient controls to ensure appropriate decisions are made, especially those involving low dollar amounts. Two recent reviews—conducted by SSA and SSA's Office of Inspector General (OIG)—found documentation and other errors in DI and other waivers. In addition, a 2015 OIG study found significant variation in DI and other waiver approval rates among field offices, and noted that some field offices with high waiver approval rates also had a high incidence of waivers under $1,000, which require less documentation. In response to the reviews, SSA has already taken some steps to improve waiver policy and training. Nevertheless, SSA's reviews do not target DI waiver decisions—especially those under $2,000, which do not require supervisory review and comprise almost a third of all waiver decisions. Without additional oversight, such as targeted reviews of DI waivers, staff may systematically waive overpayments incorrectly, particularly those involving low dollar amounts.
Why GAO Did This Study
SSA's DI program provides cash benefits to workers with disabilities. Per program rules, SSA requires that beneficiaries promptly report their work activity—including starting a job or a change in wages—as failure to do so may result in an overpayment that must be repaid. In fiscal year 2014, SSA identified $1.3 billion in DI benefit overpayments. Avoiding overpayments is imperative as they pose a burden for beneficiaries who must repay excess benefits and result in lost taxpayer dollars if they are not repaid or are waived by SSA. GAO was asked to review SSA's handling of DI overpayments and waivers due to beneficiaries' return to work.
This report examines 1) the extent of work-related DI overpayments and waivers, 2) how SSA's handling of work activity reported by beneficiaries prevents overpayments, and 3) how SSA ensures appropriate decisions are made to waive overpayments. GAO analyzed 10 years of SSA data on overpayments and waivers; reviewed relevant laws, regulations, guidance and studies; interviewed staff at SSA headquarters and several field offices and teleservice centers, selected to represent a range of relevant DI workloads; and reviewed 10 DI cases involving waived overpayments.
Recommendations
GAO is making seven recommendations, including that SSA study automated reporting options, and improve oversight of work reports and waivers. SSA agreed with six recommendations but disagreed with overseeing work reports. GAO clarified that oversight should ensure staff are following proper procedures.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Social Security Administration | To improve transparency in reporting processing errors, SSA should provide additional information on the margins of error or confidence intervals, and clearly identify any limitations in its findings on overpayment information provided to Congress and the public. |
SSA agreed with this recommendation and took steps to implement it. In its 2016 and subsequent Agency Financial Reports (AFRs), SSA reported 1) the statistical precision of yearly Disability Insurance (DI) overpayments estimates, 2) whether year to year changes in Title II improper payment estimates-which combine improper payment estimates for the Old Age and Survivors Insurance (OASI) and DI programs-were significant, and that year to year changes in DI improper payment estimates associated with specific root causes were not statistically significant. As of September 2020, SSA indicated that it will also begin explicitly reporting on the significance of year-to-year changes in error rates for the DI program separate from the OASI program. Beyond the AFR, SSA's Title II payment accuracy reports provide more detail on the limited size of the DI sample (relative to the Old Age and Survivor's Insurance sample) used to estimate payment accuracy, and the effect the sample size has on both interpreting year to year changes in overpayment estimates and associating overpayments with root causes. These steps improve the transparency of SSA reporting and address our recommendation. Moving forward, SSA could further improve transparency by, for example, including in future AFRs-which are readily available on SSA's website-the same information on the limited DI sample size that it provides in its payment accuracy reports, which are not available on SSA's website.
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| Social Security Administration | To minimize the potential effect of vulnerabilities in the work reporting process, SSA should take steps to help ensure that work information is entered directly into eWork, the system of record for work information, and issue required receipts. Such steps could include: (a) Improving and issuing guidance and training to field and 800- number staff to help ensure they log information into eWork and issue required receipts. (b) Establishing policies to monitor alerts to help ensure that work information for concurrent beneficiaries is reflected in SSI and DI systems, and take steps to monitor and make enhancements to systems or guidance, as needed. |
SSA agreed with this recommendation and took steps to implement it. With respect to training and guidance, in August 2016, SSA reported that it had reinforced and updated training for Field and Processing Center staff. The agency sent a reminder to staff about the appropriate procedures surrounding overpayments and waivers, including use of eWork. In May 2020, SSA provided documentation of detailed guidance (as of 2017) for ensuring work reports from callers are properly entered into eWork. With respect to policies to monitor alerts, SSA documented internal guidance of an automated procedure (called DCF Scrubber) that ensures that wages for concurrent beneficiaries are posted to systems for both programs. Together, these steps and documents provide reasonable assurance that staff are properly entering work reports from callers into eWork, and a procedure exists to monitor that the information was entered correctly.
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| Social Security Administration | To further ensure the effective screening of work reports, SSA should monitor its process for handling work reports to determine whether staff are taking action on work reports in accordance with proper procedures, and provide feedback to staff as needed. |
SSA did not agree with this recommendation and has not taken steps to fully implement it. As GAO reported in 2015, when SSA accepts a beneficiary's return to work allegation (work report), staff have 30 days to determine whether additional action is needed, such as a continuing disability review (CDR) to assess continued eligibility and determine whether benefits should be adjusted. However, not all work reports result in a CDR, and GAO reported that SSA lacks an oversight process to help determine whether work reports are not resulting in CDRs when they should. While SSA reports that it has methods in place to assess whether staff properly evaluated the need for CDRs for those cases already referred, SSA continues to lack an oversight process to help determine whether work reports are not resulting in CDRs when they should. Since GAO's report was issued, SSA gained the authority through the Bipartisan Budget Act of 2015 to automatically obtain wage information from payroll providers and use those data to help determine if beneficiaries are earning wages that would disqualify them from receiving disability benefits. SSA awarded a contract to a payroll data provider in fiscal year 2019 to start collecting information. This effort will lessen SSA's reliance on having beneficiaries self-report income, and lessen the probably that staff do not correctly process this information. SSA also developed an online tool (myWageReport) in 2017 that allows beneficiaries to report income electronically. While SSA's actions have potential to reduce the incidence of overpayments, they do not address how SSA will oversee work reports that staff must still screen. Absent an oversight process to ensure that work reports are properly screened, SSA may be missing opportunities to further prevent overpayments for unreported work.
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| Social Security Administration | To enhance the ease and integrity of the work reporting process, SSA should study the costs and benefits of automated reporting options, including options similar to those currently available for SSI recipients, but that do not go as far as automating the continuing disability review process. |
SSA developed a system-myWageReport-that is accessible through SSA's my Social Security portal, which allows Disability Insurance (DI) beneficiaries to report their wages online. SSA officials noted that beneficiaries are able to access this system through a mobile device. This system should make it easier for DI beneficiaries to report work and decrease the possibility that work reports are not properly recorded. SSA also reported it evaluated the option of developing a landline telephone reporting system very similar to that used by SSI recipients. Based on this assessment, SSA determined that-because DI beneficiaries generally are not required to report income as often as SSI recipients-developing this system was a low priority for the agency.
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| Social Security Administration | To enhance beneficiary understanding of work reporting requirements, SSA should: (a) Clarify work reporting requirements provided to beneficiaries. (b) Explore options for increasing the frequency of reporting reminders to DI beneficiaries, similar to those currently available to SSI recipients. |
As of August 2024, SSA reported taking several steps to clarify work reporting requirements. For instance, SSA reported it has developed outreach materials to share information with beneficiaries and advocacy groups, posted a number of articles on work reporting on the SSA website, and shared information on social media. In April 2021, SSA issued a blog, "Avoid Overpayments with Prompt Wage Reporting," which explained what recipients should report to avoid an overpayment. However, these steps do not fully address the issues identified in our report. For example, neither the April 2021 blog nor key publications (such as SSA's "Red Book" or "Working While Disabled" pamphlet) define what "prompt" or reporting "right away" means. SSA's Ticket to Work website provides more detail on work reporting, but only for Supplemental Security Income recipients, and not for beneficiaries of DI. As of September 2022, none of the SSA outreach materials provided to GAO indicate that, depending on circumstances, some beneficiaries may have to repay benefits they are not entitled to, even when those overpayments were caused by SSA incorrectly processing the beneficiaries' work reports. Finally, SSA reported that it does not plan to convene a workgroup or taskforce to clarify work reporting requirements to beneficiaries, or to explore options for increasing the frequency of reporting reminders to DI beneficiaries. In the absence of actions such as these, DI beneficiaries may continue to incur overpayments, or be required to repay overpayments that occurred even though they reported work. GAO will close this recommendation once SSA takes additional steps to clarify work reporting requirements.
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| Social Security Administration |
Priority Rec.
To improve compliance with waiver policies, SSA should develop a timetable for implementing updates to its Debt Management System to: (a) Align system controls with SSA policy, so that waivers over $1,000 cannot be administratively waived. (b) Ensure that evidence supporting waiver decisions is sufficiently maintained to allow for subsequent monitoring and oversight. |
SSA took action to address this recommendation. As of September 2020, SSA is the process of updating its Debt Management System (DMS) to include controls to prevent users from administratively waiving overpayments that are above $1,000. SSA also reports that updates to the Debt Management System will improve the retention of evidence supporting waiver decisions. SSA's March 2020 DMS road map states that SSA anticipates updates to DMS will be completed by fiscal year 2022 or 2023. These actions will help ensure that staff make waiver decisions in accordance with SSA policies.
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| Social Security Administration | To improve compliance with waiver policies, SSA should take steps to regularly assess the accuracy of DI waiver decisions, particularly for administrative waivers and for some waivers under $2,000. This could include periodically reviewing approved and denied DI waivers through its continuous quality initiative. |
For fiscal year 2020, SSA released new quality review sheets, which it reported would help provide consistent review of overpayment waiver decisions. These review sheets are used to evaluate the performance of SSA staff making waiver decisions, and cite SSA policies related to waivers. Additionally, the review sheets capture categorical amounts of overpayments-including below $1,000 and between $1,000 and $2,000-as well as information on whether decisions for administrative waivers were correctly made. These actions should help SSA regularly assess the accuracy of administrative waivers, including those under $2,000.
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