Disability Insurance:

SSA Could Do More to Prevent Overpayments or Incorrect Waivers to Beneficiaries

GAO-16-34: Published: Oct 29, 2015. Publicly Released: Oct 29, 2015.

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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.

What GAO Recommends

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.

For more information, contact Daniel Bertoni at (202) 512-7215 or bertonid@gao.gov

Recommendations for Executive Action

  1. Status: Open

    Comments: SSA agreed with this recommendation and reported in January 2016 that it would include a discussion about the limitations of error deficiencies data in future reports. To help close this recommendation, SSA will need to report any limitations, such as small sample sizes, that would affect the reliability of its estimates of DI improper payments due to specific types and causes of errors.

    Recommendation: 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.

    Agency Affected: Social Security Administration

  2. Status: Open

    Comments: SSA agreed with this recommendation and reported in January 2016 that it will develop instructions and guidance to staff on handling work reports through eWork. SSA also noted it will evaluate the need for conducting DI refresher training, and consider establishing policies to monitor alerts as part of ongoing improvement efforts. To close this recommendation, in addition to improving guidance and/or training, SSA should implement some mechanism to follow through on alerts.

    Recommendation: 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.

    Agency Affected: Social Security Administration

  3. Status: Open

    Comments: SSA disagreed with this recommendation. The agency's January 2016 response to the recommendations in this report did not include a response to this particular recommendation. To help close this recommendation, SSA will need to show how it plans to monitor its process for handling work reports to determine compliance with agency procedures, and how feedback, if any, will be provided to staff.

    Recommendation: 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.

    Agency Affected: Social Security Administration

  4. Status: Open

    Comments: SSA agreed with this recommendation. In January 2016, the agency reported that, in addition to a proposal to allow beneficiaries to report their wages on the SSA website through my Social Security, the agency is also exploring additional opportunities to enhance beneficiary self-reporting. SSA also reported that the Bipartisan Budget Act of 2015 (P.L. 114-74) allows the agency to obtain wage data from payroll data providers, and authorizes it to require individuals to provide permission to obtain third party payroll data, in order to more efficiently administer benefits and prevent improper payments. To help close this recommendation, SSA will need to show how it has evaluated various automated reporting options--including a telephone work reporting option that does not go as far as automating the Disability Insurance continuing disability review process--and any plans for using the authority provided in the Bipartisan Budget Act.

    Recommendation: 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.

    Agency Affected: Social Security Administration

  5. Status: Open

    Comments: SSA agreed with this recommendation and noted in January 2016 that it plans to assess its method of communication and explore options to strengthen its message to Disability Insurance (DI) beneficiaries regarding the importance of consistent wage reporting. The agency also plans to consider whether direct phone outreach, currently being piloted to improve wage reporting for SSI recipients, would be appropriate for the DI program. To help close this recommendation, SSA will need to show the results of its communication assessment and outreach pilot, and any strategies identified to improve communication on work reporting for DI beneficiaries.

    Recommendation: 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.

    Agency Affected: Social Security Administration

  6. Status: Open

    Comments: SSA agreed with this recommendation but noted in January 2016 that its ability to update system controls to align with SSA policy was dependent on resources. The agency also reported that it conducted training on overpayment and waiver processing in July and August 2015. To help close this recommendation, SSA will need to show its plans and time frames for updating system controls to align them with SSA policy, and to allow evidence on waiver decisions to be maintained until the waiver decision can be reviewed.

    Recommendation: 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.

    Agency Affected: Social Security Administration

  7. Status: Open

    Comments: SSA agreed with this recommendation. In January 2016, the agency reported that it conducted training on waiver processing in July and August 2015 and provided additional tools for technicians to use in making appropriate waiver decisions, and revised a number of policy instructions during fiscal year 2015. To close this recommendation, SSA will need to show how it periodically assesses the accuracy of DI waiver decisions--particularly for administrative waivers and waivers under $2,000--through its continuous quality initiative or other means.

    Recommendation: 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.

    Agency Affected: Social Security Administration

 

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