Social Security Administration pays $79 million to deceased in 3 states: IG audit

This week's Golden Horseshoe goes to the Social Security Administration, which paid an estimated $79 million to the deceased in just three states over a 10-year period, according to a final audit report by the agency's Office of Inspector General. 

"We estimate SSA issued approximately $79 million in payments after death to 1,127 beneficiaries and four representative payees who died in Alabama, Georgia, or Illinois between January 1978 and December 2018," the report found.

The watchdog identified an additional 53,486 deceased non-beneficiaries in those states whose death information was not in the SSA's Numerical Identification System. 

Examples of improper payments to the deceased the inspector general found include:

• A widow in Alabama who was receiving survivor benefits died in May 2002, but the SSA continued paying her until January 2021, and improper payments totaled $263,247.
• In Georgia, a disabled beneficiary died in June 2008, and SSA records did not contain a date of death. The agency overpaid $234,380 in benefits.
• In Illinois, a beneficiary died in November 2007, and payments continued until the IG alerted the agency in 2020. An overpayment of $112,933 was found.

"In October and November of 2020, we referred to SSA all identified beneficiaries and representative payees who may have received improper payments after death," the IG reported. "Identifying and correcting these discrepancies will prevent approximately $14 million in additional improper payments after death over a 12-month period."

The audit was conducted from April to November 2020. As of April 2021, the SSA terminated payments to 832 deceased beneficiaries and four deceased representative payees. 

The agency has initiated the recovery of $35 million in improper payments it sent out, the IG reported.

The SSA established the Electronic Death Registration for states to electronically submit death reports to the agency to prevent payments after death. Once states submit through the EDR, if the deceased data matches the agency's records, then SSA posts the information to its Numident file and terminates payments. SSA also receives death information from other sources aside from EDR, including family members and funeral directors.

"We did not determine why the deaths we identified were not in SSA's Numident or whether Alabama, Georgia, or Illinois reported those deaths to SSA," the IG reported. "However, SSA rejects EDR reports that do not pass its formatting and identification tests to prevent posting erroneous death data to its records." 

Alabama began reporting deaths through the EDR in December 2010, Georgia in February of 2008 and Illinois in May 2013. Seventy-eight percent of the beneficiaries who received payments after death, the watchdog found, died after each state began using the EDR to report death information to the SSA.

The IG also said it does not believe the EDR process is the only reason deaths were not recorded in the agency's records.