Improper Social Security payments cause a billion-dollar backlog

A record number of 5.2 million Social Security “pending action” claims have led to approximately $1.1 billion in improper payments to beneficiaries as of February 2024.

The improper payments consisted of beneficiaries not being paid enough of their benefits as well as being overpaid. 

The Social Security Administration’s Office of the Inspector General found that the average processing time of the improper payment cases was 698 days. Had the pending cases been resolved immediately, then the administration would have seen $534 million in improper payments. 

“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, acting inspector general for the SSA.

The SSA’s backlog grew by 44% between fiscal 2018 and 2023, from 3.2 million to 4.6 million. During this same period, the inspector general’s office found that the SSA met its performance measure goals for pending processing center actions for four of those years. 

However, the OIG’s report attributes the rising backlog to “unexpected staff reductions, increased workloads, and less than expected overtime funding.” 

“The number of beneficiaries continues to grow while we have the lowest staffing levels across the agency in 25 years,” Dustin Brown, acting chief of staff at the SSA, wrote in a letter in response to the report.

There are fewer than 650 employees working in the processing center for claims than there were eight years ago. Meanwhile, beneficiaries have grown from 64 million to 72 million.

The SSA implemented new policies earlier this year, which make it easier for beneficiaries to resolve overpayment matters with the agency and don’t require them to return 100% of the money they receive. 

But the agency’s workflow makes it susceptible to inaccurate payments. 

“The longer it takes SSA to process [processing center] pending actions, the longer beneficiaries wait for underpayments due, or they receive larger overpayments to pay back,” the report said.

The OIG made recommendations to address the backlog, which includes creating a staffing plan, establishing timeline targets for processing centers to keep improper payments from growing, and creating performance measures to reduce pending actions. 

However, funding for the agency is a key concern that must be addressed in order to see if these goals can be successfully carried out. 

A Senate proposal calls to increase funding for the SSA beginning in October of fiscal 2025. But the House’s version of a budget wants to cut the agency’s funding.