Worker and Family Assistance:

Legislation Is Needed To Ensure That Cost-of-Living Increases in Federal Programs Will Be Considered on a More Timely Basis in Computing Supplemental Security Income Benefits

HRD-82-52: Published: Mar 26, 1982. Publicly Released: Mar 26, 1982.


Peter J. McGough
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GAO reviewed the accounting system of the Supplemental Security Income (SSI) benefits program.

Benefits are based on a recipient's expected income during the coming 3 months. The Social Security Administration estimated that overpayments resulting from this accounting method would total about $60 million in fiscal year 1982. The Omnibus Budget Reconciliation Act mandated that SSI benefits be calculated on a monthly retrospective basis to reduce overpayments. Under this accounting method, the benefits for a particular month would be determined on the basis of the first or, at the discretion of the Secretary of Health and Human Services (HHS), the second month preceding the month of the benefit payment. The system was enacted under the assumption that a benefit payment based on actual income of a prior month would be more accurate than one based on projected income. However, retrospectively computed benefits will result in excessive payments to more than 2 million SSI recipients who also receive other Federal program benefits that increase periodically based on the cost-of-living index. The increase will not be recognized using the second preceding month under the retrospective accounting method, and SSI benefits will not be reduced until after the cost-of-living increases become effective. To the extent that these excessive payments are not recovered, much or all of the $60 million savings could be lost. Although the prospective accounting system would permit SSI payments to be immediately adjusted for cost-of-living and other increases in Federal benefits, it invites the problem of inaccurate income projections that retrospective accounting was designed to correct.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Matter for Congressional Consideration

    Matter: Congress should amend the Social Security Act to require the Secretary of HHS, under the retrospective accounting method, to take into consideration, in the month in which they occur, social security cost-of-living increases and other similar Federal program benefit increases in determining Supplemental Security Income benefits.

    Status: Closed - Implemented

    Comments: When we determine what steps the Congress has taken, we will provide updated information.

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