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entitled 'Supplemental Security Income: Wages Reported for Recipients
Show Indications of Possible SSN Misuse' which was released on July
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United States Government Accountability Office:
GAO:
Report to Congressional Requesters:
July 2014:
Supplemental Security Income:
Wages Reported for Recipients Show Indications of Possible SSN Misuse:
GAO-14-597:
GAO Highlights:
Highlights of GAO-14-597, a report to congressional requesters.
Why GAO Did This Study:
In fiscal year 2012, SSA estimated it paid over $53.4 billion to SSI
recipients, of which 8.1 percent, or $4.3 billion, SSA estimated to
have been improper payments. The SSI program pays benefits to the
aged, blind or disabled adults and children with limited income and
resources.
GAO was asked to analyze potentially improper SSA disability payments.
This report identifies potential SSI overpayments and indicators of
possible SSN misuse. SSA provided GAO with a onetime file extract of
SSI recipients as of December 2010 and the matching income from both
the quarterly wage and unemployment insurance components of the NDNH
database that included fiscal year 2010. GAO compared the SSI benefit
and NDNH wage data to identify potential overpayments. GAO randomly
selected five individuals for case-file review. These cases cannot be
projected to the overpayment population but provide illustrative
examples of possible SSN misuse.
What GAO Found:
GAO's analysis of wages reported in the National Directory of New
Hires (NDNH) initially showed that the Social Security Administration
(SSA) made $19 million in potential overpayments to 10,187 recipients
through its Supplemental Security Income (SSI) program in fiscal year
2010. Using a different methodology that includes additional causes of
overpayments not considered in GAO's analysis, SSA estimated it made
$3.3 billion in SSI overpayments in fiscal year 2010. The majority (70
percent) of the estimated overpayment amount GAO identified showed
indications of possible Social Security number (SSN) misuse, such as
employers reporting wages for recipients in multiple locations during
the same quarter. For example, GAO determined that wages for 2,399 SSI
recipients were reported solely by employers outside the recipient's
state of residence. As the figure below shows, one individual in
California had wages reported from 11 different employers in seven
other states during the same quarter of calendar year 2010. This
suggests that multiple individuals may be using the SSI recipient's
SSN and name for work. The exact number of individuals who received
overpayments and the exact amount of overpayments made to those
individuals cannot be determined without detailed case investigations
by SSA. GAO analyzed five recipient cases and provided the results to
SSA.
Figure: Supplemental Security Income (SSI) Recipient with Reported
Wages in Seven Different States:
Refer to PDF for image: illustrated U.S. map]
Recipient state: California.
States where wages were received:
Alabama;
Florida;
Indiana;
Illinois;
Mississippi;
Pennsylvania;
Washington.
Source: GAO analysis of National Directory of New Hires (NDNH) and
Social Security Administration (SSA) information. GAO-14-597.
[End of figure]
GAO analyzed employers with wages for SSI recipients from outside the
recipient's state and found nine employers who reported wages for 15
or more SSI recipients during the same quarter who lived in different
states from the employer's location. For example, a plant located in
one state reported wages for 22 SSI recipients who lived in six other
states, indicating possible SSN misuse. SSA has previously reported
that privacy and disclosure issues have limited its ability to
routinely share information with the Department of Homeland Security
(DHS), which is responsible for enforcing employer compliance with
immigration laws through its work-site enforcement strategy. Reviewing
SSI wages at a summary level can provide information on certain
employers that have high incidences of inaccurate wage reports. The
ability to share information regarding potential unauthorized
employment could enhance SSA's ability to address SSN misuse and help
DHS better target its work-site enforcement efforts.
What GAO Recommends:
GAO recommends that the Acting Commissioner of Social Security work
with the Secretary of Homeland Security to identify the data useful to
DHS's work-site enforcement strategy and seek legislative authority to
obtain such information, as appropriate. DHS agreed with GAO's
recommendation and SSA agreed to the intent of the recommendation, but
did not agree to seek legislative authority. GAO still believes this
recommendation is valid as discussed in the report to help the federal
government better utilize the complementary sources of data available
at SSA.
View [hyperlink, http://www.gao.gov/products/GAO-14-597]. For more
information, contact Seto J. Bagdoyan at (202) 512-6722 or
BagdoyanS@gao.gov.
[End of section]
Contents:
Letter:
Background:
Potential Overpayments to SSI Recipients in Fiscal Year 2010 Show
Indications of Possible SSN Misuse:
Conclusions:
Recommendation for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objective, Scope, and Methodology:
Appendix II: Comments from the Department of Homeland Security:
Appendix III: Comments from the Social Security Administration:
GAO Comments 30:
Figures:
Figure 1: Overpayment Estimate of Supplemental Security Income (SSI)
Recipients with Indications of Possible Social Security Number (SSN)
Misuse in Fiscal Year 2010:
Figure 2: Supplemental Security Income Recipient with Reported Wages
in Seven Different States:
Figure 3: Employer with Reported Wages for Supplemental Security
Income Recipients in Distant States:
Abbreviations:
DHS: Department of Homeland Security:
DI: Disability Insurance:
EIN: Employer Identification Number:
HSI: Homeland Security Investigations:
NDNH: National Directory of New Hires:
OIG: Office of the Inspector General:
OMB: Office of Management and Budget:
SSA: Social Security Administration:
SSI: Supplemental Security Income:
SSN: Social Security number:
[End of section]
United States Government Accountability Office:
GAO:
441 G St. N.W.
Washington, DC 20548:
July 16, 2014:
Congressional Requesters:
The Supplemental Security Income (SSI) program, which is administered
by the Social Security Administration (SSA), provides cash assistance
to financially needy individuals who are aged, blind, or disabled. The
SSI program is currently 1 of the 13 programs designated by the Office
of Management and Budget (OMB) as being "high-error" programs for
improper payments.[Footnote 1] In this regard, during fiscal year
2012, SSA estimated it paid over $53.4 billion to SSI recipients, of
which 8.1 percent, or $4.3 billion, SSA estimated to have been
improper payments (overpayments and underpayments).[Footnote 2]
Furthermore, SSA attributed 59 percent of SSI improper payments in
fiscal year 2012 to verification and administration errors--such as
the detection of unreported financial accounts and wages--among other
things. Individuals are not eligible for SSI payments for any period
during which they have income or resources that exceed the allowable
amounts established under the Social Security Act, which also requires
SSA to verify information on income and resources to ensure that
payments are correct and are only provided to eligible individuals.
[Footnote 3] The accuracy of earnings information is important since
earnings affect a recipient's SSI eligibility and payment amount.
Our prior work has found that weaknesses in SSA's process for
reviewing recipients' work activity have hindered the agency's ability
to identify and review recipient income, which affects eligibility for
disability benefits.[Footnote 4] This report is the third in a series
that responds to your request to examine employment-related databases
and analyze potentially improper SSA disability payments. Accordingly,
this report compares SSA data with income reported in the National
Directory of New Hires (NDNH) to identify potential SSI overpayments
and indicators of possible Social Security number (SSN) misuse.
[Footnote 5] The exact number of individuals who received SSI
overpayments and the exact amount of overpayments made to those
individuals cannot be determined without detailed case investigations
by SSA. Hence, we refer to "potential overpayments" throughout this
report.
For our prior work, SSA provided us with a one-time file extract
containing SSI recipients as of December 2010 and the matching income
information from both the quarterly wage and unemployment insurance
components of the NDNH database that included fiscal year
2010.[Footnote 6] Since this extract is the most-recent NDNH data
available to us, our analysis of SSI beneficiaries with income in the
NDNH is limited to fiscal year 2010. To determine the subset of
recipients who received potential overpayments during fiscal year
2010, we identified individuals who received SSI benefits in fiscal
year 2010 and who also had records in the NDNH indicating the receipt
of wages or unemployment insurance in the corresponding quarter of
fiscal year 2010. For each individual, we compared the amount of all
income in the NDNH to the maximum allowable income as specified by SSA
and compared this amount to the monthly SSI benefit amounts in SSA's
files to determine the total amount of overpayment. Through comparison
of these benefit amounts and income, we were able to identify
potential SSI overpayments.
In addition to our overall analysis, we randomly selected five
individuals for additional review of detailed SSI case-file
information from a population of individuals who were reported as
receiving wages from four or more states other than the state of
residence on their SSA record during the same quarter.[Footnote 7]
Because we selected a small number of individuals for further
analysis, the result of these five cases cannot be projected to the
entire population of individuals. To develop the five cases, we
reviewed relevant SSA case-file documents and interviewed SSI program
officials.
To determine the reliability of the SSA disability records and NDNH
data, we reviewed documentation related to these databases and
interviewed officials responsible for compiling and maintaining
relevant SSI and NDNH data. In addition, we performed electronic
testing to determine the validity of specific data elements in the
databases that we used to perform our work. We also reviewed detailed
SSA case files for the nongeneralizable selection of five individuals
selected for additional analysis to corroborate the NDNH and SSA data.
On the basis of our discussions with agency officials, our review of
related documentation, and our own testing, we concluded that the data
elements used for this report were sufficiently reliable for our
purposes. See appendix I for more information on our objective, scope,
and methodology.
We conducted this performance audit from April 2013 to July 2014 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objective.
Background:
The SSI program pays benefits to the aged, blind or disabled adults,
and children who have limited income and resources. To determine
whether an SSI applicant is financially eligible, SSA is to perform an
initial determination at the time of application, and to conduct
periodic reviews to determine whether the recipient remains eligible.
SSI recipients are required to report events that may affect their
financial eligibility for benefits, including changes in income,
resources, marital status, and living arrangements. SSI generally
reduces the monthly benefit by $1 for every $2 of monthly earnings
after the first $85.[Footnote 8]
SSA matches computerized data from other federal and state agencies to
help verify that the recipients' case information is correct. SSA
accesses the NDNH by means of routine file matches to verify
eligibility and payment amounts under the SSI program.[Footnote 9]
During SSA's income-verification process, SSA systems generate an
alert when a match between the SSA record and the verified quarterly
wage file shows there are significant overreported or underreported
wages. SSA uses established criteria, such as tolerances, to generate
the alerts and post them to the recipient's record for future review
and development by field-office staff to determine whether the
discrepancies affect SSI benefits.[Footnote 10]
The NDNH database, administered by the Department of Health and Human
Services, contains employment data on newly hired employees (form W-
4), quarterly wage data on individual employees, and unemployment
insurance data. In order to verify the accuracy of data in the NDNH,
the department transmits the NDNH data to SSA to verify the accuracy
of the SSN and its related name against information in the SSA
database. When the NDNH receives notification that the SSN is
verified, the system then adds the data to the NDNH database. If the
SSN is not verified it is either rejected or posted to separate files
within the NDNH.[Footnote 11]
GAO and the SSA Office of the Inspector General (OIG) have previously
identified patterns of errors and irregularities in wage reporting,
including SSN misuse. For example, in January 2001 the SSA OIG
reported that employers in the agriculture industry submit thousands
of wage items for which the employee's name or SSN does not match SSA
records.[Footnote 12] In April 2005, the SSA OIG also identified the
top 100 employers in each of the service, restaurant, and agriculture
industries that contribute the most reporting irregularities.[Footnote
13] Several of the employers and industry associations that spoke with
the SSA OIG for its April 2005 report stated that unauthorized
noncitizens contribute to SSN misuse. In 2005, we reported that
employers in certain industry categories are more likely than others
to submit reports with invalid worker identity information. Some
employers exhibit a pattern of errors year after year, such as using
one SSN for more than one worker in multiple tax years.[Footnote 14]
According to SSA, SSN misuse can cause errors in wage reporting when
earnings for one individual are incorrectly reported to the record of
another person having a similar surname. An individual, such as an
unauthorized noncitizen obtaining work in the United States, can also
deliberately use the name and SSN of another individual, which
contributes to SSN misuse. When an individual assumes another person's
identity to work in the United States using the number holder's actual
SSN and name to do so, wages reported for that individual will be
posted to the true number holder's account. According to SSA policy,
if earnings are identified that do not belong to the number holder,
the individual may submit a signed statement "disclaiming" the wages
as his or her own and have the earnings removed from his or her Master
Earnings File.[Footnote 15]
Potential Overpayments to SSI Recipients in Fiscal Year 2010 Show
Indications of Possible SSN Misuse:
According to SSA, in 2010, the SSI program made a total of $44.6
billion in payments to 8.9 million recipients. Our analysis of wages
reported in the NDNH initially showed that SSA made $19 million in
potential SSI overpayments to 10,187 SSI recipients in fiscal year
2010, but approximately 70 percent of the total overpayment amount
showed indications of possible SSN misuse, such as individuals with
wages reported from employers in multiple states during the same
quarter, so we were unable to determine whether the recipients
actually received SSI overpayments.[Footnote 16] We also found
employers with high incidences of inaccurate wage reports and
identified information that could be shared with the Department of
Homeland Security (DHS) to help address possible SSN misuse.
Analysis of 2010 Data Identified Potential Overpayments and Possible
SSN Misuse:
Based on comparisons of SSI beneficiary records with quarterly wage
and unemployment records included in the NDNH, we initially estimated
that SSA made $19 million in potential SSI overpayments to 10,187 SSI
recipients in fiscal year 2010. Using a different methodology that
includes additional causes of overpayments not considered in GAO's
analysis, SSA estimated to have made $3.3 billion in SSI overpayments
in fiscal year 2010.[Footnote 17] SSA also considers other causes of
overpayments such as pensions; resources such as real estate, bank
accounts, cash, stocks, and bonds; and living arrangements. The 10,187
recipients we identified received a monthly SSI payment when, based on
our analysis, they were potentially not entitled to any benefits. All
of these individuals appeared to receive income in fiscal year 2010
above the maximum SSI program threshold--$1,433 per month--while also
receiving SSI payments. However, as discussed below, we found
indications of some possible SSN misuse and were therefore unable to
determine the extent to which SSI overpayments were due to income
earned by the recipient and reported in the NDNH.
As shown in figure 1 below, more than 40 percent of our identified
population of 10,187 SSI recipients (4,228 SSI recipients) and about
70 percent of our original overpayment estimate ($13.2 million) showed
indications of possible SSN misuse.
Figure 1: Overpayment Estimate of Supplemental Security Income (SSI)
Recipients with Indications of Possible Social Security Number (SSN)
Misuse in Fiscal Year 2010:
[Refer to PDF for image: pie-chart and sub-chart]
$19 million in potential Supplemental Security Income (SSI)
overpayments:
Potential Social Security number (SSN) misuse population: $13.2
million.
Of that $13.2 million:
2,399 individuals with wages reported solely by employers located
outside the recipients' state of residence: $9.8 million;
582 individuals with in- and out-of-state wages: $2.1 million;
1,247 individuals with in-state wages reported by multiple employers
for the same quarter: $1.3 million;
Total: 4,228 individuals.
Source: GAO analysis of National Directory of New Hires (NDNH) and
Social Security Administration (SSA) information. GAO-14-597.
Note: The exact number of individuals with possible SSN misuse cannot
be determined without a detailed case investigation by SSA.
[End of figure]
During our analysis, we identified instances in which SSI recipients
were reported as having received wages by employers from different
states than what was reported as their state of residence on their SSA
record. We conducted additional analysis of our potential overpayment
population to determine the extent to which such out-of-state wages
occurred. We determined that for our potential overpayment population
of 10,187 recipients, wages for 2,399 SSI recipients were reported
solely by employers located outside the recipient's state of
residence. Of those 2,399 individuals, 21 were reported as receiving
wages by employers from four or more different states than what was
reported as their state of residence on their SSA records during the
same quarter. We randomly selected 5 recipients from this group of 21
for additional review of detailed SSI case-file information.
Our case-file reviews for these five recipients are nongeneralizable
(i.e., cannot be projected to the entire population of individuals)
but identify possible instances of SSN misuse. For each of the five
cases, wages reported in the NDNH triggered alerts to SSI caseworkers
for follow-up. However, all five of the recipients had evidence in
their case files of wages being disclaimed. Under SSA's procedures for
disclaiming wages, recipients can provide SSA with a signed statement
attesting that the wages being reported for their SSN were not earned
by them. One of the recipients disclaimed wages as far back as 2004,
and has repeatedly disclaimed wages every year from 2009 to 2012. Once
a recipient disclaims wages, the SSI caseworker then is to take an
additional step to remove the disclaimed earnings from the Master
Earnings File. According to SSA, the agency had already referred four
of the five recipients to SSA's OIG for further investigation. SSA OIG
stated that it reviewed the four cases, but the cases were
subsequently closed due to insufficient details that hindered its
ability to make a determination as to which individual was possibly
misusing the SSN.
The five cases we reviewed also indicated possible SSN misuse. For
example, as shown in figure 2 below, one individual living in
California had wages reported in the NDNH from 11 different employers
in seven other states that were many miles away during the same
quarter of calendar year 2010. This suggests that multiple individuals
may have been using the SSI recipient's SSN and name for work
purposes. We recognize there are instances when individuals could work
for multiple employers simultaneously. However, it is questionable
that one person could work for multiple employers simultaneously in
different regions of the country during the same quarter.
Figure 2: Supplemental Security Income Recipient with Reported Wages
in Seven Different States:
Refer to PDF for image: illustrated U.S. map]
Eleven employers in seven distant states reported wages in the same
quarter for one California Supplemental Security Income (SSI)
recipient:
One individual had reported wages from different employers in seven
different states, which suggests that multiple individuals are using
the Social Security number (SSN) and name for work.
Recipient state: California.
States where wages were received:
Alabama (1);
Florida (2);
Indiana(1);
Illinois(1);
Mississippi(2);
Pennsylvania(1);
Washington (3).
Source: GAO analysis of National Directory of New Hires (NDNH) and
Social Security Administration (SSA) information. GAO-14-597.
[End of figure]
Of the 10,187 individuals we identified as having received potential
SSI overpayments, we also identified another 582 SSI recipients with
wages reported from employers both outside and within their home state
during the same quarter. Wages reported for the remaining portion of
our overpayment population were solely from employers inside their
state. However, this subset of recipients also showed indications of
possible misuse. A total of 1,247 in-state recipients had multiple
employers report wages during the same quarter. For example, we
identified one individual who, according to SSA's records, lives in a
border town in south Texas, but had wages reported in the NDNH from
four different employers during the same quarter of calendar year 2010
located hundreds of miles away in the Dallas/Fort Worth and Houston,
Texas, areas.
We recognize that it is possible for individuals that live near a
state border to work in the neighboring state or for individuals to
change their employer within a 3-month quarter for which wages are
reported.[Footnote 18] However, without a detailed case-file review
that includes contacting the recipient to determine if reported wages
should be disclaimed, it is impossible to determine whether the wages
reported by employers in other states that are many miles away are
attributable to a single SSI recipient or to other individuals
misusing the recipient's SSN.
Certain Employers Had High Incidence of Questionable Wage Reporting:
After determining the extent to which individuals had wages reported
from outside their state, we analyzed the employers that reported
those wages. As another sign of possible SSN misuse, our analysis
identified nine employers who reported wages for 15 or more SSI
recipients during the same quarter that, according to SSA's records,
lived in different states from the employer's location. For example,
as shown in figure 3 below, one meat plant with a single Indiana
location reported wages for 22 SSI recipients whose SSA records
indicated that they lived in other states that were many miles away:
namely California, Louisiana, Massachusetts, New York, Pennsylvania,
and Texas. According to SSA's records, none of the SSI recipients we
detected in the wages reported by this employer actually lived in
Indiana. This suggests that the Indiana plant workers may have been
improperly using the SSNs of SSI recipients living in other states, or
that the SSI recipients were actively working in other states while
claiming SSI.
Figure 3: Employer with Reported Wages for Supplemental Security
Income Recipients in Distant States:
Refer to PDF for image: illustrated U.S. map]
One employer located in Indiana reported wages for 22 different
Supplemental Security Income (SSI) recipients that lived in distant
states.
None of the SSI recipient Social Security numbers (SSN) we detected in
the reported wages for this employer actually lived in Indiana,
according to the Social Security Administration's (SSA) records.
Employer state: Indiana;
Recipient states:
California (1);
Louisiana (1);
Massachusetts (1);
New York (1);
Pennsylvania (1);
Texas (17).
Source: GAO analysis of National Directory of New Hires (NDNH) and
Social Security Administration (SSA) information. GAO-14-597.
[End of figure]
SSA Could Better Share Information to Help Address SSN Misuse:
According to an August 2013 SSA OIG report, SSA staff stated that some
employers hire unauthorized workers because they know SSA has no legal
authority to levy fines and penalties, and they are not concerned
about potential Internal Revenue Service sanctions.[Footnote 19] DHS
is responsible for granting aliens permission to work in the United
States, and for enforcing compliance of employers with immigration
laws. Under the law, employers who employ individuals who they know
are not authorized to work in the United States may face civil fines,
or in some cases, criminal penalties. The U.S. Immigration and Customs
Enforcement, Homeland Security Investigations (HSI), has a three-
pronged approach to address work-site enforcement: enforcement
(criminal arrests of employers); compliance (employment-eligibility
verification inspections, civil fines, and suspension and debarment);
and outreach (education and training). According to HSI officials, HSI
prioritizes its work-site enforcement investigations by focusing on
the most-egregious violators, such as employers that knowingly hire
unauthorized workers, utilize unauthorized workers as a business
model, mistreat or exploit their workers, aid in the smuggling of
their alien workforce into the United States, or create false identity
documents or facilitate document fraud. HSI officials further stated
that the agency continues to prioritize the protection of our nation's
critical infrastructures and key resource sectors and industries by
ensuring that unauthorized workers do not have access to sensitive
facilities or information. As part of the effort to target
unauthorized employment, a law was established allowing SSA to share
data with DHS on noncitizens who have earnings recorded under a
nonwork SSN.[Footnote 20] Under certain circumstances, SSA may assign
nonwork SSNs to noncitizens who are in the United States but are not
authorized to work. Individuals earning wages under a nonwork SSN
represent potential noncitizens who are working without DHS
authorization. Furthermore, DHS officials stated that if the data on
possible SSN misuse we identified could be routinely shared with them,
similar to sharing the nonwork SSN data, it may assist them in their
enforcement efforts. For example, they stated that the data on
possible SSN misuse we identified may add to the depth of DHS
investigations by identifying indicators of potentially egregious
employers who knowingly hire unauthorized workers, and support DHS's
work-site enforcement strategy efforts. Specifically, rather than
identifying work discrepancies on a case-by-case basis, DHS officials
agreed that our summary analysis may provide useful information on
certain employers that have a high incidence of reporting inaccurate
wages, indicating possible SSN misuse.
Although SSA is able to identify possible SSN misuse for SSI
recipients when alert notices are generated and wages are ultimately
disclaimed by the recipient, SSA has previously reported that privacy
and disclosure issues have limited its ability to combat SSN misuse.
[Footnote 21] For instance, according to SSA, data-sharing
restrictions limit its ability to routinely share information with DHS
regarding employers who file large numbers of wage statements with
inaccurate SSNs.[Footnote 22] In 2001, SSA OIG recommended that SSA
reevaluate its application of existing laws or seek legislative
authority to remove barriers that would allow the agency to share
information regarding chronic problem employers who submit duplicate
or unassigned SSNs with DHS. At the time, SSA disagreed with the
recommendation, stating that it continued to provide appropriate
disclosure guidance within its existing authority. In addition, SSA
stated in its response to the SSA OIG's 2001 report that there was no
need for the agency to reevaluate its disclosure policies or to seek
legislation in this area because SSA's existing regulations authorized
it to disclose information for law-enforcement purposes, including
requests for investigation or prosecution purposes.
Similarly, in February 2005 we recommended that the Secretary of
Homeland Security take steps to determine how DHS can best use SSA-
supplied data on potential illegal work activity and specific
industries associated most frequently with such activity to support
its work-site enforcement efforts.[Footnote 23] In its response to our
2005 report, DHS had stated that it was taking the necessary steps to
determine the best use of SSA-provided listings of persons with
earnings who lack work authorization. In February 2006 we further
concluded that coordination between DHS and SSA to leverage usable and
useful data is essential to ensure that limited DHS work-site
enforcement resources are targeted effectively.[Footnote 24] In 2005,
SSA OIG reiterated its support for the 2001 recommendation to seek
legislative authority that would allow SSA to share information
regarding employers who had the most reporting irregularities, such as
invalid, unassigned, and duplicate SSNs. In 2013, SSA OIG identified
employers who report wages with significant errors in the employee
name and SSN and also recommended that SSA continue working with DHS
to develop a coordinated strategy to reduce SSN misuse.[Footnote 25]
In its written response to the August 2013 SSA OIG report, SSA agreed
with this recommendation and stated it would continue to promote
methods for employers to verify employee names and SSNs that would
result in fewer wage-reporting irregularities. For example, DHS's E-
Verify is a free, largely voluntary, Internet-based system that allows
employers to verify the employment eligibility of newly-hired
employees with the SSA database and DHS immigration databases.
Currently, DHS estimates that 9 percent of employers utilize E-Verify
with approximately 1,600 additional employers enrolling every week.
Both Congress and the executive branch have recognized the need for
improved collaboration across the federal government. In addition, in
our past work, we have concluded that collaboration is critical for
achieving meaningful results in efforts involving multiple federal
agencies.[Footnote 26] Following key practices for effective
collaboration can help agencies address a range of challenges, such as
information sharing and communication. One of these key practices is
directly relevant to SSA's efforts to collaborate with DHS:
establishing compatible policies, procedures, and other means to
enhance information sharing and communication across agency
boundaries. We previously identified tools that can facilitate such
collaboration between agencies, such as shared databases and web
portals. Establishing a negotiated data-sharing arrangement could be
beneficial for effective collaboration between SSA and DHS.
As previously mentioned, a component of DHS's work-site enforcement
strategy includes focusing on employers who knowingly hire
unauthorized workers. Our analysis provides important newly identified
summary information on employers that file high numbers of inaccurate
wage reports with valid and assigned SSNs that appear to be misused.
Such information could be used by DHS to target unauthorized
employment in support of its work-site enforcement efforts. In
addition to providing specific data in response to requests from law
enforcement for particular investigations, routine data-sharing
capabilities that include employers who have high incidences of
inaccurate wage reports may augment DHS's existing work-site
enforcement strategies by identifying potential unauthorized
employment.
Conclusions:
Wages reported by employers in the NDNH for SSI recipients can be used
to identify recipient employment activity as well as the possible
misuse of SSNs. Our analysis shows that reviewing these discrepancies
between income reported by SSI recipients and income reported by
employers at a summary level can provide important information on
certain employers that have a high incidence of reporting inaccurate
wages for SSI recipients, indicating possible SSN misuse. This
employer-level information could be useful to DHS as part of its work-
site enforcement strategy, which includes focusing on employers who
knowingly hire unauthorized workers. However, due to privacy and
disclosure laws, SSA is limited in its ability to share this employer-
level information with DHS. This leaves the federal government unable
to "connect the dots" using data it already has at its disposal.
Hence, additional actions could facilitate the sharing of this
information. Obtaining legislative authority to enable the sharing of
information regarding potential unauthorized employment, including
about employers who file high numbers of wage statements with
potentially misused SSNs, could enhance SSA's ability to address SSN
misuse and help DHS better target its work-site enforcement efforts.
Recommendation for Executive Action:
To help strengthen SSA's efforts to monitor the SSI program, and pay
accurate SSI benefits, as well as to enhance DHS's investigative
efforts on behalf of its work-site enforcement strategy, we recommend
that the Acting Commissioner of Social Security work with the
Secretary of Homeland Security to identify the specific data useful to
DHS's work-site enforcement strategy, including the new summary
information that we identified on employers who file high numbers of
wage reports with potentially misused SSNs, along with the
corresponding privacy and disclosure restrictions, and seek
legislative authority to allow the Secretary to obtain such
information, as appropriate.
Agency Comments and Our Evaluation:
We provided a draft of our report to the Secretary of Homeland
Security and the Acting Commissioner of Social Security for comment.
We adjusted the initial language of the recommendation based on a
request from SSA officials to allow the flexibility to coordinate with
DHS and identify specific data that would be useful to DHS's work-site
enforcement strategy prior to seeking any new legislative authority.
We received written comments from both DHS and SSA, which are
reproduced in appendix II and III. SSA and DHS also provided technical
comments, which we have incorporated as appropriate.
In its written comments, DHS said that it concurred with the
recommendation and that HSI will work with SSA to identify information
that may be useful to DHS's work-site enforcement efforts and
establish a formal point of contact for doing so, although DHS did not
provide a time frame for implementing the recommendation. In its
written comments, SSA said it agreed with the intent of the
recommendation but will not pursue any legislative authority that may
be required to share data not already allowed under current law
because it does not want to be a conduit for sharing data between
other agencies. GAO still believes that appropriate legislative
authority should be pursued as necessary to allow DHS and SSA to more-
effectively share information, and better "connect the dots" with the
data they already have at their disposal. Since SSI program data
converges with complementary data from the Department of Health and
Human Services and the Department of the Treasury, these data would be
useful in supporting DHS's work-site enforcement efforts. We continue
to believe action is needed in response to our recommendation because,
with neither SSA nor DHS pursuing potentially needed data-access
authority, the information on potential SSN misuse and on employers
with a high incidence of questionable wage reporting identified by GAO
will remain unutilized.
We are sending copies of this report to appropriate congressional
committees, the Acting Commissioner of Social Security, the Secretary
of Homeland Security, and other interested parties. In addition, the
report will be available at no charge on the GAO website at
[hyperlink, http://www.gao.gov].
If you or your staff have any questions regarding this report, please
contact me at (202) 512-6722 or BagdoyanS@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report.
Signed by:
Seto J. Bagdoyan:
Acting Director, Audits:
Forensic Audits and Investigative Service:
List of Requesters:
The Honorable Thomas R. Carper:
Chairman:
The Honorable Tom Coburn, M.D.
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Carl Levin:
Chairman:
Permanent Subcommittee on Investigations:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Claire McCaskill:
Chairman:
Subcommittee on Financial and Contracting Oversight:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
[End of section]
Appendix I: Objective, Scope, and Methodology:
Both Congress and the executive branch have recognized the need for
improved collaboration across the federal government. In our past
work, we concluded that collaboration is critical when meaningful
results that the federal government seeks to achieve required the
coordinated efforts of more than one federal agency.[Footnote 27] This
report examines potential Supplemental Security Income (SSI)
overpayments by comparing Social Security Administration (SSA) data
with income reported in the National Directory of New Hires (NDNH)
database and identifies indicators of possible Social Security number
(SSN) misuse.
For our prior work on SSA's programs, SSA had provided us with a file
containing SSI recipients as of December 2010 and the matching income
information from both the quarterly wage and unemployment insurance
component of the NDNH database that included fiscal year 2010.
[Footnote 28] SSA also provided us an updated extract of SSI
recipients as of September 2013, which separated the state and federal
portion of the SSI benefit payment. We utilized the income reported in
the NDNH and the federal portion of the SSI benefit payment to
determine the extent that individuals potentially received SSI
overpayments in fiscal year 2010. Since the file containing SSI
recipients and the corresponding NDNH data provided by SSA is the most-
recent NDNH data available to us, our analysis of SSI beneficiaries
with income in the NDNH is limited to fiscal year 2010.
To determine the subset of recipients who received overpayments during
fiscal year 2010, we identified individuals who received SSI benefits
in fiscal year 2010, and who also had records in the NDNH indicating
the receipt of wages or unemployment insurance in the corresponding
quarter of fiscal year 2010. For each individual, we used the monthly
SSI benefit amounts in SSA's files and the amount of all income in the
NDNH to determine the total amount of overpayment. Through comparison
of these benefit amounts and income, we were able to identify
potential SSI overpayments. Our analysis of the potential overpayments
is limited to income data from the NDNH and SSI payments from SSA. The
exact number of individuals who received SSI overpayments and the
exact amount of overpayments made to those individuals cannot be
determined without detailed case investigations by SSA. Thus, we refer
to "potential overpayments" throughout this report.
We also reviewed detailed SSI case files for a nongeneralizable
selection of five individuals to illustrate potential cases of SSN
misuse in overall overpayment population. We randomly selected a
sample of five individuals from our population who were reported as
receiving wages from four or more different states other than the
state of residence that was reported on their SSA record. In order to
be included in our sample, individuals had to have wages reported from
four or more separate states during the same quarter. Because we
selected a small number of individuals for further analysis, the
results of these five cases cannot be projected to the entire
population of individuals who received SSI overpayments. To develop
the cases, we reviewed relevant SSA case-file documents and
interviewed SSI program officials.
Of our population of SSI recipients that we identified who were
reported as receiving wages from a different state than the state of
residence that was reported on their SSA record during the same
quarter, we analyzed the Employer Identification Number (EIN) for
their employers and found nine employers who had 15 or more SSI
recipients who lived out of state working for that employer in the 2nd
quarter of 2010. To avoid the possibility that an employer might have
locations in multiple states, we researched each of the nine EINs in
LexisNexis to determine the number of states in which the employer had
locations. Of the nine EINs, four were not found in LexisNexis, and
four had locations in multiple states. The remaining one had locations
in only one state. We selected this employer as an example of an
employer who reported wages for SSI recipients in distant states
during the same quarter.
To determine the reliability of the SSA disability records and NDNH
data, we reviewed documentation related to these databases and
interviewed officials responsible for compiling and maintaining
relevant SSI and NDNH data. In addition, we performed electronic
testing to determine the validity of specific data elements in the
databases that we used to perform our work. We also reviewed detailed
SSA case files for the nongeneralizable selection of five individuals
selected for additional analysis to corroborate SSA data. On the basis
of our discussions with agency officials, our review of related
documentation, and our own testing, we concluded that the data
elements used for this report were sufficiently reliable for our
purposes.
We conducted this performance audit from April 2013 to July 2014 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objective.
Limitations to Using NDNH Data:
The timing and nature of NDNH income data we received present
limitations to the data's capacity to identify overpayments in
accordance with SSA's program rules. First, the quarterly amounts on
the NDNH represent 3 months of income; however, SSA calculates
overpayments based on monthly earnings amounts. To facilitate our
analysis, we calculated monthly income for each month in a quarter by
dividing the quarterly NDNH amount by three. For example, if the NDNH
reported quarterly income of $3,000 in the first quarter of 2010, we
calculated the monthly income to be $1,000 for January, February, and
March of 2010. This monthly computed income amount could differ from
the actual monthly income. For instance, using the previous example,
the actual monthly income in January 2010 could be $3,000, and actual
income in February or March could be $0. In addition, because we were
limited to SSI beneficiaries with income in the NDNH for fiscal year
2010, our analysis may understate the extent of individuals receiving
potential overpayments due to possible SSN misuse.
SSI Overpayments:
Our analysis of the NDNH match file identified individuals who
received SSI payments in fiscal year 2010 and had computed monthly
income that exceeded the corresponding monthly threshold for the
program.[Footnote 29] To calculate the potential SSI overpayments for
each month, we compared the income to the maximum benefit amounts as
specified by SSA by subtracting the total countable income from the
2010 monthly SSI benefit rate of $674. SSI has program rules for the
exclusion of a certain amount of income in considering whether the
monthly SSI benefit rate should be reduced.[Footnote 30] As such, we
took these exclusions into consideration to capture the amount of
exclusion used and the remaining exclusion amount. Specifically, we
calculated countable unearned income, countable earned income, and the
total countable income. Since this population included individuals
with indications of expenses incurred or income set aside that are
typically excluded from countable income when calculating the SSI
benefit amount,[Footnote 31] individuals with these types of expenses
were also excluded from our overall population. About 0.25 percent of
the SSI recipients in our population had any indication of exclusions
to income present.
[End of section]
Appendix II: Comments from the Department of Homeland Security:
U.S. Department of Homeland Security:
Washington, DC 20528:
June 30, 2014:
Seto J. Bagdoyan:
Acting Director, Forensic Audits and Investigative Service:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Re: Draft Report GAO 14-597, "Supplemental Security Income: Wages
Reported for Recipients Show Indications of Possible SSN Misuse"
Dear Mr. Begdoyan:
Thank you for the opportunity to review and comment on this draft
report. The U.S. Department of Homeland Security (DHS) appreciates the
U.S. Government Accountability Office's (GAO) work in conducting its
review and issuing this report.
The Department is pleased to note GAO's recognition of DHS' efforts to
protect our nation against unauthorized workers; in particular the
U.S. Immigration and Customs Enforcement (ICE), Homeland Security
Investigation's (HSI's) three-pronged approach to address work-site
enforcement through:
* enforcement (criminal arrests of employers);
* compliance (employment-eligibility verification inspections, civil
fines and suspension and debarment); and;
* outreach (education and training).
DHS will continue to collaborate with the Social Security
Administration (SSA) to determine what SSA information can be used to
improve work-site enforcement, as appropriate.
The draft report contained one recommendation, with which the
Department concurs. Specifically, GAO recommended that the Acting
Commissioner of Social Security work with the Secretary of Homeland
Security to:
Recommendation 1: Identify the specific data useful to DHS's work-site
enforcement strategy, including the new summary information that we
identified on employers who file high numbers of wage reports with
potentially misused SSNs, along with the corresponding privacy and
disclosure restrictions, and seek legislative authority to allow the
Secretary to obtain such information, as appropriate.
Response: Concur. The ICE HSI, will work with the SSA to identify
information, allowable for distribution under law that may be useful
to DHS's worksite enforcement efforts. HSI will establish a point of
contact to reach out to SSA to more formally continue the dialogue
between the two agencies. Estimated Completion Date: To Be Determined.
Again, thank you for the opportunity to review and comment on this
draft report. Technical comments were previously provided under
separate cover. Please feel free to contact me if you have any
questions. We look forward to working with you in the future.
Sincerely,
Signed by:
Jim H. Crumpacker, CIA, CFE:
Director:
Departmental GAO-OIG Liaison Office:
[End of section]
Appendix III: Comments from the Social Security Administration:
Note: GAO comments supplementing those in the report text appear at
the end of this appendix.
Page numbers in the draft report may differ from those in this report.
Social Security:
Office of the Commissioner:
Social Security Administration:
Baltimore, MD 21235-0001:
July 3, 2014:
Mr. Seto Bagdoyan:
Acting Director, Forensic Audits:
and Investigative Service:
United States Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Bagdoyan:
Thank you for the opportunity to review the draft report,
"Supplemental Security Income: Wages Reported for Recipients Show
Indications of Possible SSN Misuse" (GAO-14-597). We have enclosed our
response to the audit report contents.
If you have any questions, please contact me at (410) 966-9014. Your
staff may contact Gary S. Hatcher, our Senior Advisor for Records
Management and Audit Liaison Staff, at (410) 965-0680.
Sincerely,
Signed by:
Katherine Thornton:
Deputy Chief of Staff:
Comments On The Government Accountability Office Draft Report:
"Supplemental Security Income: Wages Reported For Recipients Show
Indications Of Possible SSN Misuse" GAO-14-597:
General Comments:
We take seriously our responsibility to protect the integrity of the
Social Security number (SSN). We are pleased the report confirms that
our field employees take this responsibility seriously, as they took
appropriate action to disclaim wages and even referred cases of
concern to our Office of the Inspector General's Office of
Investigations.
We believe the statement on GAO's highlight page (second sentence),
"Using a different methodology that includes additional causes of
overpayments not considered in GAO's analysis, SSA estimated it made
$3.3 billion in SS1 overpayments in fiscal year 2010." is misleading
to the reader and adds no value to what GAO found based on GAO's
methodology. Additionally, GAO makes no reference to the source of the
estimates GAO states SSA estimated. Therefore, we suggest GAO remove
this sentence from the report. [See comment 1]
Potential SSN Misuse:
GAO assumes, based on the results of its limited, non-generalizable
sample, that receiving earnings outside a worker's state of residence
or from multiple employers is an indication of SSN misuse. GAO
acknowledges, but then seems to dismiss, that there may be valid
reasons for these earnings. It is not only workers residing near state
borders, or workers for companies with multiple locations, who are
likely to have earnings reported in other States. Individuals who work
for large corporations that contract with out-of-state payroll
providers may have earnings reported from another State. For example,
we pay our employees who work in Baltimore, Maryland through the
Department of the Interior, located in Denver, Colorado, rather than
by a Maryland office of the Social Security Administration.
Additionally, it is common for individuals to have multiple earnings
reports. In fact, each year we process multiple earnings reports for
tens of millions of individuals. In short, without a more thorough
analysis, or even a more detailed description of the methodology from
which to replicate GAO's review, we cannot determine the validity of
GAO's conclusion that such earnings indicate potential SSN misuse is
valid. [See comment 2]
Unauthorized Employment:
Based on previous unrelated audits rather than any analysis of the
cases reviewed, GAO assumes that instances of "potential SSN misuse"
are the result of work performed by noncitizens without work
authorization. GAO does not consider any alternatives, such as
identity theft perpetrated by family members with access to the
worker's personally identifiable information. We cannot, based on the
limitations of GAO's methodology, draw the same conclusion that
"potential SSN misuse" directly correlates to unauthorized work. [See
comment 3]
Potential Improper Payments in the Supplemental Security Income (SSI)
Program:
In general, GAO should clarify the confusing description of the
matched Supplemental Security Record and National Directory of New
Hires (NDNH) data. For example, the report notes that GAO received a
file of December 2010 SSI recipients and "matching" income information
from the NDNH, which would seem to indicate that GAO used income from
the 4th quarter of 2010. However, the report refers to all of fiscal
year 2010 as the analysis period, and states that "...individuals
appeared to receive income in fiscal year 2010 above the maximum SSI
program threshold—-$1,433 per month-—while also receiving SSI
payments" [italics added]. [See comment 4]
In addition, the limitations of its methodology for comparing SSI
payments to NDNH data call into question GAO's estimate that we made
$19 million in potential SSI overpayments. Income determinations under
the SSI program can be complex, and GAO's abridged income calculations
do not account for these complexities. [See comment 5] For example,
GAO's methodology does not account for:
* Periods of SSI ineligibility,
* Retrospective Monthly Accounting,
* Other income exclusions (e.g. Student Earned Income Exclusions); or:
* Delays in applying work incentives or reporting employment or income
to SSA.
Recommendation:
To help strengthen SSA's efforts to monitor the SSI program, and pay
accurate SSI benefits, as well as to enhance DHS's investigative
efforts on behalf of its work-site enforcement strategy, we recommend
that the Acting Commissioner of Social Security work with the
Secretary of Homeland Security to identify the specific data useful to
DHS's work-site enforcement strategy, including the new summary
information that we identified on employers who file high numbers of
wage reports with potentially misused SSNs, along with the
corresponding privacy and disclosure restrictions, and seek
legislative authority to allow the Secretary to obtain such
information, as appropriate.
Response:
We agree with the intent of the recommendation: that enhanced work-
site enforcement tools would be helpful to the Department of Homeland
Security (DHS). Such enforcement tools would deter potential SSN
misuse, stop businesses from knowingly hiring undocumented workers,
and provide DHS with point-of-hire employment data that includes
information about new hires and their employers. We remain committed
to continuing our long-standing, close working relationship with DHS,
including support of the E-Verify program and DHS's efforts to expand
its usefulness as a key enforcement tool against unauthorized
employment. As part of our ongoing inter-agency working discussions to
improve E-Verify, we will reach out to DHS to determine whether there
is information in our records and under our control that DHS would
need to target its work-site enforcement efforts. However, as
discussed in detail below, we will not seek legislative authority to
share data in our records that is not ours to share; as such sharing
may not improve our payment accuracy.
In its recommendation, GAO proposes that sharing information with DHS
to enhance its work-site enforcement strategy would also help us
monitor and improve the accuracy of SSI payments. Given our concerns
with GAO's methodology, we do not believe the evidence supports the
conclusion that sharing data with DHS would improve SSI payment
accuracy. As GAO notes in its report, the results of its five-case
sample are not generalizable, and there are many reasons why an
individual may have work reported by multiple employers in multiple
states.
In addition, the data that GAO suggests we share with DHS is not ours
to share. The NDNH database belongs to the Department of Health and
Human Services (HHS). Earnings information in our records and in the
NDNH, such as Employer Identification Numbers, are considered tax
information and are subject to rigid protection against disclosure
under the Internal Revenue Code. Pursuant to statute, we are
authorized to access and use this data for our own program purposes.
However, given that we do not believe sharing this data with DHS will
enhance our payment accuracy, we see no reason to seek legislative
authority to act as a conduit for information between DHS and agencies
that may maintain data of use to DHS in its work-site enforcement
efforts. Accordingly, we defer to DHS to work directly with agencies,
such as HHS and the Department of Treasury, to obtain access, if
appropriate, to the information under those agencies' control.
Technical Comments:
Page 4, footnote 3. {See comment 6]
Comment: Footnote 3 should read "42 U.S.C. §§ 1381 et seq."
Page 6, Background, first paragraph, last sentence:
We suggest adding a footnote for the statement, "SSI generally reduces
the monthly benefit by $1 for every $2 of monthly earnings after the
first $85." Our suggested footnote language is, "The first $65 (up to
a maximum of $85 if the individual has no income other than earnings)
of any monthly earned income plus one-half of remaining earnings are
excluded for SSI benefit computation purposes." [See comment 7]
GAO Comments:
The following are GAO's comments on the Social Security
Administration's (SSA) letter dated July 3, 2014.
1. In the report, we added a reference to SSA's Fiscal Year 2011
Performance and Accountability Report as the source of the estimate.
Including SSA's own estimate of Supplemental Security Income (SSI)
overpayments shows that overpayments are a recognized issue with the
program.
2. As mentioned in the report, we recognize that it is possible for
individuals that live near a state border to work in the neighboring
state or for individuals to change their employer within a 3-month
quarter for which wages are reported. However, without a detailed case-
file review that includes contacting the recipient to determine if
reported wages should be disclaimed, it is impossible to determine
whether the wages reported by employers in other states that are many
miles away are attributable to a single SSI recipient or to other
individuals misusing the recipient's Social Security number (SSN). Our
report describes a case where an SSI recipient that lives in
California had wages reported by 11 different employers in seven
different states, none of which bordered California, for the same 3-
month period. We believe this is an indication of potential SSN misuse.
3. As mentioned in our report, the Department of Homeland Security
(DHS) stated that the data on possible SSN misuse we identified may
add to the depth of DHS investigations by identifying indicators of
potentially egregious employers who knowingly hire unauthorized
workers.
4. We revised the report to clarify GAO had National Directory of New
Hires (NDNH) data that included fiscal year 2010.
5. As mentioned in the report, we state that the exact number of
individuals who received SSI overpayments and the exact amount of
overpayments made to those individuals cannot be determined without
detailed case investigations by SSA. Thus, we refer to "potential
overpayments" throughout this report. In addition, the report states
that approximately 70 percent of the total overpayment amount showed
indications of possible SSN misuse, such as individuals with wages
reported from employers in multiple states during the same quarter, so
we were unable to determine whether the recipients actually received
SSI overpayments. Additional limitations to our methodology are
described in detail in appendix I.
6. We revised the footnote to address SSA's specific comment.
7. We added the footnote to address SSA's specific comment.
[End of section]
Footnotes:
[1] High-error programs are those programs that (1) measured and
reported errors above the threshold determined by OMB and contributed
to the majority of improper payments; (2) have not reported an
improper payment dollar amount, but have in the past reported errors
above the threshold; or (3) have not yet reported an overall program
improper payment dollar amount, but the aggregate of the measured
program's component errors are above the threshold. The fiscal year
2010 threshold was $750 million in improper payments.
[2] Total federally administered payments represent estimated program
outlays and may vary from actual outlays. SSI statistical precision is
at a 95 percent confidence level. Confidence intervals for fiscal year
2012 are ±0.53 percent for underpayments and ±1.78 percent for
overpayments.
[3] 42 U.S.C. §§ 1381 et seq.
[4] Our earlier work focused on SSA's Disability Insurance (DI)
program, which is the nation's largest cash-assistance program for
workers with disabilities. See GAO, Disability Insurance: Work
Activity Indicates Certain Social Security Disability Insurance
Payments Were Potentially Improper, [hyperlink,
http://www.gao.gov/products/GAO-13-635] (Washington, D.C.: Aug. 15,
2013) and Disability Insurance: SSA Can Improve Efforts to Detect,
Prevent, and Recover Overpayments, [hyperlink,
http://www.gao.gov/products/GAO-11-724] (Washington, D.C.: July 27,
2011).
[5] The Department of Health and Human Services' Office of Child
Support Enforcement's NDNH contains quarterly state wage information,
which is more recent than the annual wage information that SSA obtains
through its current Internal Revenue Service data match. SSA currently
uses the NDNH to periodically monitor the earnings of SSI recipients.
According to SSA Office of the Inspector General (OIG), SSN misuse is
described as one person using another's name and SSN for work purposes.
[6] [hyperlink, http://www.gao.gov/products/GAO-11-724] and
[hyperlink, http://www.gao.gov/products/GAO-13-635].
[7] Individuals had to have wages reported from four or more separate
states during the same quarter. "Four or more states" was utilized as
a criterion because it is unlikely that an individual could work
simultaneously in four or more states in one quarter, although it is
possible for individuals that live near a state border to work in the
neighboring state.
[8] According to SSA, the first $65 (up to a maximum of $85 if the
individual has no income other than earnings) of any monthly earned
income plus one-half of remaining earnings are excluded for SSI
benefit computation purposes.
[9] SSA matches the SSI data against the NDNH database, looking for
significant wage discrepancies between reported income by SSI
recipients and income reported by employers.
[10] An alert is generated when the wage amount for a quarter exceeds
the Supplemental Security Record wage amount for that quarter by more
than the "tolerance." The tolerance for a recipient's wage is $250 for
a quarter. An alert will not be generated for self-employment income
because it is reported annually, not quarterly.
[11] Some states' quarterly wage records include only a partial set of
letters, or no letters, in the employees' names. When these states
send their records to the NDNH, the system checks the SSN to determine
whether it is within the range of SSNs that have been issued to date
by SSA. Records with SSNs outside the issued range are rejected. If
the SSN is within the range, the system attempts verification. If the
SSN/name combination is not verified, the system accepts the record
and stores it in the quarterly wage Non-Verifiable or Unverified files.
[12] Social Security Administration, Office of the Inspector General,
Obstacles to Reducing Social Security Number Misuse in the Agriculture
Industry, A-08-99-41004 (Jan. 22, 2001).
[13] Social Security Administration, Office of the Inspector General,
Social Security Number Misuse in the Service, Restaurant, and
Agriculture Industries, A-08-05-25023 (Apr. 29, 2005).
[14] See GAO, Social Security: Better Coordination among Federal
Agencies Could Reduce Unidentified Earnings Reports, [hyperlink,
http://www.gao.gov/products/GAO-05-154] (Washington, D.C.: Feb. 4,
2005).
[15] The Master Earnings File is the main source of SSA's earnings
data. SSA uses earnings information received from the Internal Revenue
Service, including quarterly earnings records, and annual income-tax
forms to calculate benefit amounts, and stores this earnings
information as the Master Earnings File.
[16] Due to indications of potential SSN misuse, we refer to our SSI
overpayment population as "potential" overpayments. It is important to
note that it is not possible to determine from data analysis alone the
extent to which SSA made improper benefit payments to these
individuals since a detailed evaluation of all the facts and
circumstances must be conducted for each recipient. This evaluation
would include contacting the recipient and the employer to gather
information.
[17] Figure obtained from Social Security Administration, Fiscal Year
2011 Performance and Accountability Report.
[18] Individuals may also work for large corporations that contract
with out-of-state payroll providers and have earnings reported from
another state.
[19] Social Security Administration, Office of the Inspector General,
Employers Who Report Wages with Significant Errors in the Employee
Name and Social Security Number, A-08-12-13036 (Aug. 9, 2013).
[20] 8 U.S.C. § 1360(c).
[21] Social Security Administration, Office of the Inspector General,
Employers Who Report Wages with Significant Errors in the Employee
Name and Social Security Number.
[22] Social Security Administration, Office of the Inspector General,
Obstacles to Reducing Social Security Number Misuse in the Agriculture
Industry.
[23] [hyperlink, http://www.gao.gov/products/GAO-05-154].
[24] See GAO, Social Security Numbers: Coordinated Approach to SSN
Data Could Help Reduce Unauthorized Work, [hyperlink,
http://www.gao.gov/products/GAO-06-458T] (Washington, D.C.: Feb. 16,
2006).
[25] Social Security Administration, Office of the Inspector General,
Social Security Number Misuse in the Service, Restaurant, and
Agriculture Industries, A-08-05-25023; and Employers Who Report Wages
with Significant Errors in the Employee Name and Social Security
Number.
[26] See GAO, Managing for Results: Key Considerations for
Implementing Interagency Collaborative Mechanisms, [hyperlink,
http://www.gao.gov/products/GAO-12-1022] (Washington, D.C.: Sept. 27,
2012).
[27] See GAO, Managing for Results: Key Considerations for
Implementing Interagency Collaborative Mechanisms, [hyperlink,
http://www.gao.gov/products/GAO-12-1022] (Washington, D.C.: Sept. 27,
2012).
[28] Our earlier work focused on SSA's Disability Insurance (DI)
program, which is the nation's largest cash-assistance program for
workers with disabilities. See GAO, Disability Insurance: Work
Activity Indicates Certain Social Security Disability Insurance
Payments Were Potentially Improper, [hyperlink,
http://www.gao.gov/products/GAO-13-635] (Washington, D.C.: Aug. 15,
2013) and Disability Insurance: SSA Can Improve Efforts to Detect,
Prevent, and Recover Overpayments, [hyperlink,
http://www.gao.gov/products/GAO-11-724] (Washington, D.C.: July 27,
2011).
[29] The maximum SSI monthly earnings threshold for calendar year 2010
was $1,433.
[30] The SSI federal monthly benefit rate for fiscal year 2010 was
$674. This standard amount is then reduced by any countable income.
The reduction for unemployment and pension income, which is considered
unearned income, is dollar for dollar after a $20 general income
exclusion. The reduction for quarterly wage income, which is
considered earned income, is $1 for every $2 after an $85 exclusion
($20 general exclusion + $65 earnings exclusion).
[31] SSA allows recipients to deduct out-of-pocket costs for
Impairment Related Work Expenses from the amount of earnings used to
figure the SSI benefit. Impairment Related Work Expenses may be
nonreimbursed expenses related to the disability and needed in order
to work. Earned income used to meet Blind Work Expenses is not counted
in the SSI eligibility and payment amount decision. Blind Work
Expenses may be expenses needed to earn income, and do not have to be
related to the individual's blindness. A Plan to Achieve Self Support
is an SSI provision to help individuals with disabilities return to
work. Plan to Achieve Self Support lets a disabled individual set
aside money and things he or she owns to pay for items or services
needed to achieve a specific work goal.
[End of section]
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