Report Reveals Gross Mismanagement at Social Security Administration

By November 20, 2015Social Security

Here’s a truly staggering example of government waste and resource mismanagement: According to a new report, Social Security Disability Insurance, run by the Social Security Administration, and tasked with providing benefits to disabled workers, has overpaid to the tune of $11 billion during the past nine years.

The Social Security Administration has at this point given up on recovering $1.4 billion in overpayments, after ruling that the payouts were solely the fault of the agency—not the workers who benefited from them.

That’s fair, but why were these payments given out to begin with?

The Government Accountability Office (GAO), blames poor oversight among the SSA’s employees, who failed to properly monitor the income levels of workers who continue to receive benefits. So, workers who have returned to their jobs and started earning a regular paycheck have continued receiving government dollars long after these payments were supposed to stop.

Evidently, the Disability Insurance program has rules so complex that many employees cannot keep them all straight; there is no computerized income reporting system, and overpayments of up to $1,000 are simply waived.

It is no big surprise, then, that Congress has made overtures to reform the program significantly in the next two years, increasing accountability and improving oversight. One only wonders what took them so long.

Congressional auditors noted that these egregious overpayments “represent an avoidable drain on the nation’s dwindling [disability insurance] trust fund.” Meanwhile, many workers who did their part in accurately reporting their income are still being asked to refund their overpayments, which creates hardships and burdens for them.

What can be done to rescue this program from its mismanagement and fated insolvency? One solution that is routinely floated is the notion of taking funds from the Social Security retirement fund and putting it into Disability Insurance. This is misguided. First, the Social Security Administration itself is set to become insolvent by 2033. Additionally, it seems unfair to take money from a program we’re paying into (and from which we’re promised to get a return) in order to bail out another failing, mismanaged program. The government shouldn’t take its promises, our tax dollars, and our financial futures so lightly.

A better approach is for us to finally realize that we cannot coerce hard-working Americans to join an expensive, wasteful, and poorly managed government program like this one.

At the very least, we can demand greater accountability and transparency with how this program is run. After all, these overpayments are being made with our tax dollars—and we have every right to demand the government to get its accounting together.

Learn more about why Social Security is ruining your retirement plan here.

Author Kristie Eshelman

Kristie Eshelman is a contributor for Generation Opportunity.

More posts by Kristie Eshelman
  • joycebarron

    Articles like this really really get me worked up as they are misleading. First of all, SSDI funds are paid for out of the same tax contribution as retirement benefits. I receive SSDI because I worked for 30 years paying into the system. I now have a degenerative disease that means I may not reach retirement age, and receive benefits, which I paid a great deal of taxes for. Congress originally divided benefits into two funds – the retirement fund, and the disability fund. The disability fund covers only those workers who paid enough into the system to earn credits, just as the retirement fund works. The percent of individuals receiving SSDI vs. retirement benefits has actually decreased by 25% over the last decade. The amount allocated to their benefits is insufficient to cover even the reduction in population, and is far below the number of disabled individuals in society at large.

    In order to encourage younger workers to get off of the disability rolls and return to work, the SSA has a program called Ticket to Work, in which a disabled person can work and retain benefits over a trial period of time. Many people must work part time, because the benefits are low, disqualify us for many of the entitlements given to SSI individuals (who did not contribute enough in taxes to receive social security on their earmings record), and once again we are not receiving a cost of living adjustment for any individual on social security.

    The upper ceilings for the TTW program are artificially low, and have not been raised to keep up with the increases in minimum wage taking place over the country. Let’s think about that for a moment. Taxpayers who paid into the Social Security system for year are not entitled to a raise due to the lack of inflation, while the minimum wage is under pressure to nearly double to to rise in living costs. HMMMMM.

    Anyway right now, you can work between 10-15 hours a week on SSDI and not hit the ceiling, somehting that will go to 5 hours a week or less once the minimum wage increases take place. Yet, people that are not entitled to food stamps, Medicaid and pay huge out of pocket Medicare costs, are penalized for working, and stripped of benefits they paid years to get.

    The average length of time to qualify for SSDI is 2-4 years, with at least two denials and an appeal before a judge. For me it was 3 years. During that time the individual has no income or medical coverage and cannot work or the claim will be thrown out. Once benefits are finally approved, then there are huge bills and their credit is ruined, they are often homeless.

    This is not the way to treat taxpayers who develop disabilities and cannot work. Yes there is fraud but it is much more common in SSI than SSDI. Where is the financial incentive for SSDI recipients to lose everything to take about an 80% pay cut?

    The individuals retroactively report earnings, as required by law, and then benefits are adjusted. Yes there is mismanagement, but the amount of $1000 is more than a month of wages allowed on the ticket to work program.

    We are not “taking money” from retirees. We are individuals who worked for years and paid our taxes, and are receiving our benefits from a single social security tax which funds both disability and retirement.

  • There is no “money” in either the SS or DI trust funds. By law, any money transferred in from the suckers that are conscripted in to the Ponzi Scheme, MUST be “invested” in to government debt, i.e. social security taxes in excess of social security entitlement payments have been used to fund general government obligations. Bernie Madoff could be considered a trustworthy investment adviser when compared to the thieves in the SS Administration. You, as a site, are being far to kind and gentle towards your government, Generational theft as has occurred over the last 80 years beginning with the New Deal has no equivalent in history. Relatively few baby boomers and their families have and will continue to become fabulously wealthy at the detriment of 90% of the population. The only policy prescription is to cease immediately any more money going in to this program, or Medicare for that matter.