GAO: $1.29 billion in disability fraud slips through the cracks

A recent investigation by the Government Accountability Office (GAO) found as much as $1.29 billion in potentially improper payments in the Social Security Disability Insurance program (SSDI). The GAO reports that just by sharing earnings data, the Social Security Administration could have flagged 36,000 SSDI recipients the disibility program missed with its own tools.

In 2012, 10.89 million Americans received $136.9 billion in disability benefits meant as a safety net for those unable to support themselves. But as WORLD has previously reported, it’s also a go-to place for welfare when times get tough.

Some who aren’t disabled inevitably slip through required checks, and the GAO found that simply using quarterly earnings statements could flag cases the annual SSA system misses, sometimes for months, sometimes altogether.

Commonly referred to as the “deadbeat dad” database, states use the National Directory of New Hires (NDNH) to enforce child support rules, tracking down delinquent parents with quarterly earnings reports. The GAO compared NDNH and SSA lists between July 2009 and September 2010 and found 36,000 un-flagged recipients with earnings over SSDI thresholds in that period alone.

The largest, previously undetected problem, occurs because the SSDI enforcement system only investigates years benefits are provided, so it’s left short on data when a recipient’s mandatory waiting period occurs in the previous calendar year. The SSA has no other way of flagging recipients who might not deserve payments.

SSA annual reports can also miss for months those who work beyond a trial or grace period, when recipients can experiment with potential work options without losing benefits due to earnings. Quarterly reports could unnecessarily flag those in trial work periods. But the SSA seems currently content to overpay now and recoup later. The SSA’s own confirmed debt from overpayments now tops $6 billion.

“This report demonstrates just how little importance the Social Security Administration places on policing its disability rolls,” Sen. Tom Coburn, R-Okla., said earlier this week.

In response to the report, the SSA warned changing its enforcement policy could be costly. Even if the fraud is fixed, though, the disability program could go insolvent as early as 2015. When its trust fund is exhausted, payroll taxes will only cover 80 percent of benefits many hold as a lifeline.

“If we’re serious about preventing waste and fraud and ensuring that these critical benefits get to the people who need and deserve them, Congress must also do its part and provide needed resources and access to basic anti-fraud data … ,” said Senate Homeland Security and Governmental Affairs Committee Chairman Tom Carper, D-Del. For now, data sharing is rare and subject to rolls of red tape.

The recent GAO report is just the latest in a slew of problems facing SSDI. At a hearing this summer to discuss years of backlogs applicants often face, the SSA acknowledged it’s sending checks to 1.3 million beneficiaries without even verifying they are still disabled.