There is significant and valid concern over the government’s ongoing ability to maintain Social Security payment commitments. Given these issues, one might reasonably expect the Social Security Administration to safeguard the existing assets. Guess again.
The Social Security inspector general estimates that $40 million was paid out to deceased beneficiaries. These erroneous payments did not occur because some nefarious relative chose to keep the death quiet and continue to obtain the payments (although that happens too). Instead, this number represents payments to confirmed deceased individuals based on Social Security’s own records. Social Security maintains a “Death Master File” which is updated based on information provided by family members or funeral directors. However, the processing and application of that information is clearly flawed. And this is not the only area where overpayments are occurring: the inspector general’s report suggests that $152 million in unnecessary costs a year could be avoided if Social Security more effectively determined who is entitled to benefits.
These amounts were uncovered via an audit by a watchdog agency. The uncovering of the issue is certainly a step in the right direction, but whether any action will be taken remains to be seen.