Need To Strengthen Social Security's Beneficiary Reporting Requirements and Enforcement Authority

HRD-85-12: Published: Mar 22, 1985. Publicly Released: Mar 22, 1985.

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GAO reported on federal retirement overpayments to determine what portion of overpayments are caused by beneficiaries and how effectively the Social Security Administration (SSA) utilizes its sanctions to prevent and minimize improper reporting.

GAO found that, as of September 1984, retired and disabled beneficiaries and their dependents or survivors owed SSA about $2 billion, which represented about 1.4 million overpayments. About 60 percent of such overpayments, constituting two-thirds of all overpaid dollars, were caused by beneficiaries who misreported, reported late, or did not report events that would have reduced or eliminated benefits. Although most overpayments were refunded to the government, a small portion of funds were retained because SSA did not often use existing penalty authority, or the authority did not extend to all incidents that gave rise to beneficiary-caused overpayments. GAO believes that, although some overpayments cannot be avoided, most could be avoided or reduced if compliance procedures were better enforced.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: No legislation was introduced to amend title II of the Social Security Act.

    Matter: Congress should amend title II of the Social Security Act to: (1) require that beneficiaries who expect to earn more than the exempt amount submit an earnings estimate to SSA; (2) provide authority for SSA to assess penalties in cases where beneficiaries do not make reports within the prescribed time or fail to furnish an earnings estimate; (3) require penalties to be collected from persons no longer receiving benefits; (4) make the penalty structure more equitable by relating it to the amount of the overpayment and, if feasible, the lateness of the report; and (5) provide for the Secretary of Health and Human Services to waive penalty charges.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: SSA has made some improvements in its penalty process. In April 1986, it automated the assessment, control, and collection of penalties arising from the earnings test, the most frequent cause of overpayments. Plans for a comprehensive National Debt Management System to cover all debts and penalties still exist. However, the plans continue to change and so does the date for implementation.

    Recommendation: The Secretary of Health and Human Services should direct the Commissioner of Social Security to improve the management of the current penalty process. Specifically, SSA should: (1) ensure that repayment history and other data needed to make the decision to assess a penalty are available at the time the initial decision is made and that penalty decisions are documented; and (2) review all penalty decisions before they become finalized to identify and correct inconsistent application of the penalty procedures.

    Agency Affected: Department of Health and Human Services


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