A “record-breaking backlog” of pending actions has led to an estimated $1.1 billion in improper Social Security beneficiary payments, according to a new report by the Social Security Administration’s Office of the Inspector General.
“This report continues to highlight the urgency for SSA to reach its pending actions performance goal and to ensure beneficiaries receive their proper payments as promptly as possible.”
Acting Inspector General for SSA Michelle Anderson
As of February 2024, SSA’s pending actions backlog reached an all-time high of 5.2 million pending actions, resulting in the $1.1 billion in improper payments.
According to the Aug. 8 report, Reducing Processing Centers’ Pending Actions (022313), SSA’s performance measure is to reduce the number of pending actions at processing centers, as the pending actions alone contribute to an increase in improper payments. However, SSA’s backlog and pending actions goal have increased since Fiscal Year (FY) 2018. While SSA met its goals in four of the last six fiscal years between FY 2018 through 2023, the Agency’s pending actions backlog increased by 44% from 3.2 to 4.6 million pending actions, during that same timeframe.
“Customer satisfaction has been an ongoing concern for SSA. This report continues to highlight the urgency for SSA to reach its pending actions performance goal and to ensure beneficiaries receive their proper payments as promptly as possible,” said Michelle Anderson, Assistant Inspector General for Audit serving as the Acting Inspector General for SSA.
As the backlog grows, many processing center pending actions remain unresolved for long periods of time resulting in larger improper payments, including growing underpayments or increasing overpayments to beneficiaries. In improper payment cases, the average processing time was 698 days, according to a sample evaluated by SSA OIG.
SSA cited unexpected staff reductions, increased workloads, and less than expected overtime funding that would have been used to pay employees to process more PC pending actions, as explanation for the record-breaking backlog.
“Facing numerous challenges and monumental change, SSA OIG employees were highly successful despite receiving only one increase in base funding in FY 2022 after receiving no increase since FY 2016. SSA OIG also received no additional budget to fund its investigations related to pandemic relief programs or government imposter scams,” said Gail S. Ennis in a June 29 letter marking her retirement as SSA Inspector General to U.S. Senate Committee on Finances and U.S. House of Representatives Committee on Ways and Means. “At the same time, SSA received significant increases in its budget. In FY 2024, SSA OIG’s budget represents 0.8% (less than one percent) in comparison to SSA’s budget. Even with these fiscal challenges SSA OIG maintains $21 in returns to the American people for every $1 in appropriations.”
Although only falling short of meeting its annual goal in FYs 2019 and 2022, there was no overall reduction in PC pending actions for the last six fiscal years.
The Office of the Inspector General made three recommendations to SSA to consider for its backlog reduction. SSA agreed with those recommendations.
New policies in place
Earlier this year, SSA put in place new policies to make it easier for beneficiaries to resolve overpayment issues, loosening previous rules that called for clawing back 100% of the money beneficiaries received.
SSA announced it will decrease the default overpayment withholding rate for Social Security beneficiaries to 10% (or $10, whichever is greater) from 100%, significantly reducing financial hardship on people with overpayments.
“Social Security is taking a critically important step towards our goal of ensuring our overpayment policies are fair, equitable, and do not unduly harm anyone,” said Martin O’Malley, Commissioner of Social Security in a March 29 press release. “It’s unconscionable that someone would find themselves facing homelessness or unable to pay bills, because Social Security withheld their entire payment for recovery of an overpayment.”
Social Security launched a comprehensive review in October 2023 of agency overpayment policies and procedures to address payment accuracy systematically. The procedure change is a direct result of the ongoing review.
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Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
