Pundits and policymakers love to brawl over who should be receiving Social Security benefits--but it's hard to imagine any of them vying for deceased Aunt Edna.
According to a Social Security Inspector General report, $40.3 million in social security benefits have been paid to the dead since 2008. Typically, family members or funeral homes are supposed to notify the Social Security Administration (SSA) that a person has died, at which point the information is put in the SSA’s Death Master File. However, people sometimes fail to report this information and even when they do—the SSA continues to make erroneous payments.
The report finds that the SSA has made payments to more than 6,000 beneficiaries for months or even years after receiving notice that the person has died. The IG estimates that about 1,760 of these people are actually dead—the rest of the entries are mistakes. According to the IG, these erroneous death entries can also lead to “severe financial hardship and distress to affected individuals.”
One beneficiary in New York passed away in April, 1990. The SSA recorded the person’s death in May of that year, but failed to make note on the person’s payment record. A total of $210,000 in social security payments has been sent to this person since then—which could probably cover a college education and a couple cases of microbrews, to boot.
“We could not explain why various controls designed to prevent or detect payments to deceased beneficiaries failed in these instances,” writes the Inspector General. Their recommendations to the SSA include “determine the living status of the 6,000 beneficiaries” (well, duh), “terminate benefits and recover improper payments” and also “improve follow-up on the Death Alert Control and Update System (DACUS) alerts or implement a new periodic review.”
Dana Liebelson is POGO's Beth Daley Impact Fellow.
Image via Flickr user Truus, Bob & Jan too!.