SSA says understaffing led to overpaying 2M beneficiaries since FY 2022

The Social Security Administration overpaid about 2 million beneficiaries over the past two years, and is telling lawmakers that more staffing is needed to redu...

The Social Security Administration overpaid about 2 million beneficiaries over the past two years, and is telling lawmakers that more staffing is needed to reduce improper payments.

SSA is dealing with its lowest staffing level in 25 years, but at the same time is providing benefits to a record 71 million Americans. The agency pays out about $1.4 trillion in benefits each year.

Acting SSA Commissioner Kilolo Kijakazi told members of the House Ways and Means Committee on Wednesday that the agency overpaid more than a million beneficiaries in fiscal 2022, and more than 980,000 individuals in FY 2023.

Kijakazi said those overpayments make up a small fraction of SSA transactions. She said improper payments make up 0.5% of Social Security payments and 8% of Supplemental Security Income (SSI) payments.

“SSA employees work assiduously to pay the right person, the right amount at the right time, and as a result, we have achieved low overpayment rates,” Kijakazi told the subcommittee on Social Security.

Subcommittee Chairman Drew Ferguson (R-Ga.), however, said that “even a small percentage of errors can have a big impact, and every error can affect a beneficiary’s livelihood.”

Tonya Eickman, the program audit division director for the SSA Office of the Inspector General, told lawmakers that improper payments can occur when SSA doesn’t have the necessary information from beneficiaries or when SSA makes mistakes when computing payments.

Eickman said SSA OIG has considered improper payments a major management challenge for the agency since 2002.

Kijakazi said SSA has mailed notices to beneficiaries who have been overpaid and requested a “full and immediate refund.” To recoup the funds, SSA tells beneficiaries it will withhold a percentage of future benefit payments.

The notice gives beneficiaries the option to appeal the decision or to propose a different rate of withholding from future benefit payments.

Kijakazi said SSA is required by law to try to recover overpayments.

“I understand that receiving an overpayment notice can be distressing for beneficiaries. We seek to balance compassion with our statutory obligation and to seek recovery and carefully review Social Security trust funds,” she said.

Kijakazi, in her written testimony, said SSA is looking to ensure that recovering overpayments “does not unduly burden those underserved, vulnerable or marginalized communities.”

She told lawmakers that those underserved communities include “very low-income communities, as well as communities of color or who are facing other barriers.”

SSA freezes hiring, overtime under continuing resolution

Kijakazi said that SSA is struggling with its lowest staffing level in 25 years, but recently embarked on a “hiring surge” to replenish its ranks.

SSA hired 7,800 employees in fiscal 2023. But that only increased its headcount by about 3,200 employees, after factoring in retirements and employees leaving the agency. SSA currently has about 60,000 employees.

Kijakazi said staffing shortages “absolutely contribute to overpayments,” given the record number of beneficiaries it now serves.

“SSA cannot continue to do more with less to achieve the high-quality service that our beneficiaries deserve,” she said.

The agency, however, has put a freeze on new hires and overtime in FY 2024, until it gets a comprehensive budget for the rest of the year. Congress passed a continuing resolution last month to temporarily hold federal spending at FY 2023 levels. The CR is set to expire on Nov. 17.

Kijakazi said SSA needs a higher budget to continue with its hiring efforts.

“Given attrition over the course of the year, if we have level funding, we will have a hiring freeze, which means we cannot replace the people who leave. And so, we will begin that decline in our staffing once again, and not have sufficient staff,” she said.

Subcommittee Ranking Member John Larson (D-Conn.) said SSA needs more staffing to meet its mission.

“The thing that I hear most of my district from individuals … is that they can’t get in touch with a human being or a voice on the other side that can answer a question for them. And the reason they can’t is because the agency has been cut and understaffed,” Larson said.

The Senate and House remain far apart on reaching a comprehensive spending deal for the rest of the fiscal year.

The Senate has a full slate of spending bills ready for a full vote. They keep most nondefense discretionary spending frozen at current levels. But the House is still working on its own version of those bills that push for spending cuts.

House lawmakers have proposed cutting SSA funding by as much as 30%, but Kijakazi said cuts of that magnitude would force the agency to make some tough choices.

“It would be more of a crisis than what we are experiencing now,” she said. “If we receive a cut of that magnitude, what would happen is that many of the offices in your districts would have to close.”

SSA said in an Oct. 4 press release that it would conduct a review of overpayment procedures and policies.

“The agency takes seriously its responsibilities to ensure eligible individuals receive the benefits to which they are entitled and to safeguard the integrity of benefit programs to better serve its customers,” SSA wrote.” Agency employees work hard to pay the right person the right amount at the right time, and payment accuracy rates remain high.”

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