Social Security releases $901 million in underpayments

Social Security releases $901 million

The Social Security Administration (SSA) has released more than $900 million in money owed to disability beneficiaries. In a recent blog post published by the government agency on July 16, the SSA announced the release of $901 million in funds owed to Supplemental Security Income (SSI) recipients as of June 2024. SSI is a crucial benefit designed for individuals who are over 65, have a qualifying disability, or are blind, and have very-low-to-no income.

Underpayments occur when a recipient’s benefits are miscalculated, resulting in them receiving less money than they are entitled to. The agency highlighted that this substantial figure includes $209.1 million of the “most complex” and prolonged underpayments, which have been owed to approximately 81,000 people. 

“We are committed to finding solutions to challenges, such as peer reviews and installment and dedicated account processes, that have hindered timely payments,” the blog post stated.

This significant release of funds underscores the SSA’s dedication to ensuring that all beneficiaries receive the full amount they are owed, addressing both past miscalculations and ongoing challenges in the payment process.

Improper Payments by the SSA

The SSA’s Office of the Inspector General has previously highlighted that “improper payments”—which encompass both overpayments and underpayments—can arise for various reasons. These reasons include:

• Failure to obtain necessary information from beneficiaries
• Neglecting to act on the information once received
• Mistakes in computing payments due to the complexity of calculations
• Reliance on manual processes

Impact on Beneficiaries

According to the SSA website, in the 2019 financial year, the primary cause of underpayments to beneficiaries was the inability to authenticate eligibility. This resulted in approximately $623 million not being paid out to disability benefit recipients. Additionally, around $41 million in SSI benefits was not disbursed due to administrative errors by the SSA itself.

In a significant development, a staggering $724 million in owed benefits went unpaid to SSI claimants in a particular year. Newsweek reached out to the Social Security Administration (SSA) via email outside of regular business hours to inquire about any updated figures for more recent years.

Scrutiny on SSA for Improper Payments

Recently, the SSA has faced substantial scrutiny due to issues with improper payments, especially in the realm of overpayments. Several beneficiaries, some facing payback demands in the tens of thousands, were unaware they were being overpaid and now find themselves unable to repay these amounts.

Long-standing Overpayment Disputes

Many of these overpayment cases have dragged on for years. One benefit recipient shared with Newsweek that they have been contesting an overpayment notice since 2011, highlighting the prolonged nature of these disputes.

Changes in Overpayment Recoupment

In March of this year, the SSA announced a significant policy change regarding how overpayments are recouped from benefit recipients. Key changes include:

• Ending the practice of intercepting 100 percent of an overpaid beneficiary’s monthly Social Security benefit by default if they did not respond to the SSA’s demand for repayment.