Supplemental Security Income:

Opportunities Exist for Improving Payment Accuracy

HEHS-98-75: Published: Mar 27, 1998. Publicly Released: Mar 27, 1998.

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Barbara D. Bovbjerg
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Pursuant to a congressional request, GAO conducted a follow-up review on the feasibility of the Social Security Administration (SSA) using new data sources on earnings and financial account information to determine applicants' eligibility for the Supplemental Security Income (SSI) program, focusing on: (1) the extent to which overpayments occur because SSI clients fail to disclose their earnings and financial accounts; (2) whether SSA could obtain more current and comprehensive information to detect undisclosed earnings; and (3) whether the agency could obtain more current and comprehensive information on undisclosed financial accounts.

GAO noted that: (1) unreported or underreported earnings and financial accounts continue to result in significant overpayments in the SSI program; (2) according to SSA's overpayment data, the failure of SSI clients to disclose earnings and financial accounts was responsible for approximately 40 percent of the $1.6 billion in overpayments identified for fiscal year 1996; (3) specifically, about $379.5 million in overpayments was the result of SSI clients not fully disclosing their earnings, and $268.1 million was the result of clients not disclosing financial account information; (4) more current and comprehensive information is now available to detect undisclosed earnings; (5) SSA detects overpayments resulting from undisclosed earnings primarily by matching information provided by SSI clients with earnings data used in the administration of other government programs; (6) however, computerized matches, which are not done until individuals are on SSI's rolls, have built-in delays in detecting overpayments that range from 6 to 21 months; (7) two databases developed for use by the Office of Child Support Enforcement (OCSE) could provide SSA with more current and comprehensive earnings information; (8) SSA could check these databases prior to placing applicants on the rolls and thereby prevent overpayments caused by applicants failing to disclose earnings at the time of application; (9) these databases would also allow SSA to detect occurrences of undisclosed earnings to ongoing recipients within 4 to 6 months and thereby reduce the number and duration of the corresponding overpayments; (10) opportunities for improved financial account information also exist; (11) SSA detects undisclosed financial accounts by conducting computer matches once a client's eligibility has been established; (12) this match, however, can only detect undisclosed accounts that existed 9 to 21 months before; (13) SSA could obtain up-to-date information on the financial accounts of SSI clients from financial institutions by accessing the nationwide telecommunication network, which links all financial institutions; (14) such information would help ensure that applicants whose bank accounts would make them ineligible for the program do not gain eligibility; and (15) by eliminating ineligible individuals at the point of application, SSA could avoid the expense of determining medical and vocation disability and could also reduce the number and duration of overpayments to ongoing recipients who are overpaid because of newly acquired financial accounts or increases in existing ones.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: SSA is using OCSE wage and unemployment insurance (UI) data quarterly to detect wages and UI not reported by SSI recipients. This match replaces SSA's semi-annual wage match. In addition, SSA has finalized a memorandum of agreement with OCSE to provide direct query access for SSA claims representatives to OCSE's wage, UI, and new hire databases, and it has also completed the pilot testing of such access at the field level. As of September 14, 2000, all states were providing new hire information, quarterly earnings data, and monthly UI data to the OCSE database, called the National Directory of New Hires (NDNH). On January 2, 2001, the agency gave all field offices direct access to the NDNH and issued instructions for how field staff should use this information during initial claims and posteligibility situations. Given SSA actions, this recommendation is closed.

    Recommendation: The Commissioner of SSA should develop computerized interfaces necessary to access OCSE's New Hire Data Base and Quarterly Wage Data Base, and use them in accordance with applicable security and privacy laws and regulations to detect undisclosed earnings during initial and subsequent determinations of eligibility for the SSI program.

    Agency Affected: Social Security Administration

  2. Status: Closed - Implemented

    Comments: In 1998, SSA proposed legislation that would facilitate the agency acquiring financial account information on benefit applicants and recipients. This legislation passed under Section 213 of the Foster Care Independence Act. SSA is developing the necessary regulations for implementing this legislation, and currently draft regulations are in the Agency's review process. The Agency has also identified a vendor who can reach financial institutions nationwide so that field staff will be able to obtain information on the bank accounts of clients electronically. This project has been placed on the Title XVI 5-Year Plan as unscheduled.

    Recommendation: The Commissioner of SSA should study the feasibility of obtaining computerized information from financial institutions to detect financial accounts that SSI clients do not report during the application process and during subsequent determinations of eligibility. Such a study should include a comparison of the cost of obtaining and using such information and the program savings achievable as a result of that use. Security and confidentiality issues should also be addressed.

    Agency Affected: Social Security Administration


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