Delays in Recomputing Social Security Benefits Cause Underpayments for Extended Periods

GAO discussed the Social Security Administration's (SSA) review of beneficiary earnings records and how these reviews affect the timeliness and amount of benefit payments.

GAO found that SSA policy is to review beneficiary earnings records annually because recent earnings not included in previous benefit computations may increase benefits. This review and subsequent payment of corrected benefits is called the Automatic Earnings Reappraisal Operation (AERO). GAO found that the time required for AERO has increased dramatically since 1978. GAO estimated that, based on available 1979 and 1980 reported earnings, SSA underpaid at least 2.5 million beneficiary cases by at least $1.98 billion. GAO found that difficulties in implementing a newly legislated annual wage reporting system for 1978 earnings, competition from other programs, and the need to implement several new legislative mandates have caused the delays. SSA expects AERO for 1981 and 1982 earnings to be completed within 32 months. Since this process is tied closely to modernization of the SSA data processing systems, it is too early for GAO to predict when systems modernization will influence processing time.