Social Security Underpays Beneficiaries

About 450,000 beneficiaries were underpaid $500 million since 2008 by Social Security, according to an Inspector General audit. More than 85% of those beneficiaries were identified in a 2008 audit, but the SSA didn’t take corrective action. These were not errors discovered by beneficiaries but are errors uncovered by SSA’s internal system. But the systems are inadequate to ensure that someone follows through and restores correct payments to beneficiaries.

Consequently, about 56,000 beneficiaries or their survivors never saw $122 million. That’s in addition to $359 million owed 392,000 beneficiaries identified in the 2008 audit.

Additionally, SSA employees did not always remove corrected or verify underpayments. This resulted in about 115,000 terminated beneficiaries erroneously receiving more than $92 million. About 95 percent of these were identified by the IG in 2008.

In the 2008 audit, the IG included six recommendations to improve the underpayment system. The SSA agreed with four.