The Social Security Administration (SSA) has done it again. Between 2020 and 2023, the agency overpaid beneficiaries by a staggering $32.8 billion. That’s billion with a B.
- $13.6 billion in overpayments under the Old-Age, Survivors, and Disability Insurance (OASDI) program.
- $19.2 billion in improper Supplemental Security Income (SSI) payments.
The primary culprit? Bureaucratic incompetence and a reporting system that assumes beneficiaries will flag their own ineligibility. If you’re not already laughing, you should be.
Overpayments Assessed in Fiscal Years 2020 Through 2023https://oig.ssa.gov/assets/uploads/062405.pdfThe Anatomy of the ScamSSI recipients got hit hardest.- 85% of SSI overpayments were due to unreported changes in income, resources, or living arrangements.
- 51% of those were due to unreported earnings.
- 25% stemmed from unreported eligibility-affecting events (disability cessation, incarceration, excess resources).
- 2% came from SSA computation errors — because even when the government controls the calculator, it still gets the math wrong.
OASDI overpayments weren’t much better.- 72% were due to beneficiaries failing to report changes in work status or medical conditions.
- 36% resulted from unreported disability cessations or violations of the Substantial Gainful Activity (SGA) rule.
- 4% were payments made after death. (Yes, SSA keeps sending checks to the deceased. If you ever needed proof of the zombie economy, here it is.)
- 3% went to fraudsters or aliens living abroad for more than six months.
- 9% came from computation errors, cross-program recovery, or other nebulous ‘miscellaneous’ reasons.
The ‘Solutions’ That Solve NothingLet’s be real. SSA’s response to overpayments has been, at best, sluggish, and at worst, outright sadistic. The same agency that mistakenly gives away billions has no problem aggressively demanding repayments from struggling seniors and disabled Americans — sometimes years after the fact.
- SSA’s automated letters threaten beneficiaries with payment cuts or legal action if they don’t pay back funds they likely spent on rent and medication.
- The agency lacks real-time data integration, meaning it often discovers overpayments
years after they’ve occurred.
- The process to appeal an overpayment demand is so slow and convoluted that many beneficiaries simply give up — because SSA’s favorite trick is running out the clock.
And let’s not forget the “tech upgrades” that are supposed to fix these problems.
- SSA’s Disability Case Processing System (DCPS) was a $300 million disaster that didn’t work.
- A $1.1 billion data center in Maryland was obsolete before it even went online.
- In 2017, hackers stole personal data from 700,000 beneficiaries via SSA’s MySocialSecurity portal. The agency downplayed it.
Congress: The Real Beneficiaries of the Broken SystemCongressional oversight? Please. Lawmakers hold hearings where SSA officials get grilled, but nothing happens. Ever. And here’s why:
- SSA is a revolving door for corporate contractors and bureaucrats who get fat off no-bid contracts and bloated IT projects.
- The government siphons Social Security trust fund surpluses into the general budget, spending the money on everything except what it was meant for.
- Wall Street loves the dysfunction because it fuels arguments for privatization, letting financial firms dip their hands into the $2.9 trillion Social Security reserve like raccoons in a trash bin.
The Simple Fix? Automation and Real ConsequencesHere’s the thing — this problem has a fix, but it’s one that politicians and bureaucrats don’t like because it disrupts their grift.
1.
Automate real-time data feeds: If banks can flag a suspicious $600 transaction in your checking account, SSA can track employment and income changes in real time. No excuses.
2.
Hold SSA accountable for its own mistakes: If the agency overpays someone, they should eat the loss, not claw it back from people barely scraping by.
3.
Crack down on fraud where it actually happens: That means less harassment of seniors over minor reporting errors and more resources targeting the firms and officials enabling the real theft.
But don’t hold your breath. The system isn’t broken. It’s working exactly as intended — for those running it.
The report, titled “Overpayments Assessed in Fiscal Years 2020 Through 2023,” provides an analysis of overpayments made by the Social Security Administration (SSA) under the Old-Age, Survivors, and Disability Insurance (OASDI) and Supplemental Security Income (SSI) programs. The key findings and details are as follows:
Total Overpayments: Between FY 2020 and 2023, SSA issued approximately $32.8 billion in overpayments, with $13.6 billion attributed to OASDI and $19.2 billion to SSI.
SSI Overpayments:
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Primary Cause: 85% of SSI overpayments were due to beneficiaries failing to report changes in income, resources, living arrangements, or other eligibility-affecting information. The remaining 15% were due to undetermined reasons or SSA computation errors.
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Breakdown:
- 51% were due to unreported earnings or income.
- 25% were due to unreported information affecting eligibility (e.g., disability cessation, incarceration, or excess resources).
- 9% were due to unreported changes in living arrangements or in-kind support.
- 13% were due to undetermined reasons (multiple factors).
- 2% were due to SSA computation errors.
OASDI Overpayments:
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Primary Cause: 72% of OASDI overpayments were due to beneficiaries failing to report changes in work status, income, or medical conditions. The remaining 28% were due to other reasons.
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Breakdown:
- 36% were due to disability cessation or unreported substantial gainful activity (SGA).
- 23% were due to the annual earnings test (retirement beneficiaries earning above thresholds).
- 4% were due to payments made after a beneficiary’s death.
- 3% were due to unreported government payments (e.g., workers’ compensation or pensions).
- 3% were due to fraud or aliens living outside the U.S. for over 6 months.
- 2% were due to incarceration or parole violations.
- 11% were due to cross-program recovery (e.g., SSI debts) or cross-benefit adjustments.
- 9% were due to computation or other errors.
- 7% were due to unspecified reasons.
Challenges and Recommendations:
- SSA relies heavily on beneficiaries and third parties to report changes affecting eligibility, leading to delays in identifying overpayments.
- The lack of automated real-time data feeds contributes to the issue, requiring significant resources to assess and recover overpayments.
- SSA’s reliance on manual processes places a burden on both employees and beneficiaries, who must repay overpayments.
The report highlights the need for improved data integration and automation to reduce overpayments and streamline recovery processes. SSA’s dependence on self-reporting and delayed information from external sources remains a significant challenge.
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