Social Security Administration
Cases of Federal Employees and Transportation Drivers and Owners Who Fraudulently and/or Improperly Received SSA Disability Payments Gao ID: GAO-10-444 June 25, 2010The Social Security Administration (SSA) administers two of the nation's largest cash benefits programs for people with disabilities: the Social Security Disability Insurance (DI) program, which provides benefits to workers with disabilities and their family members, and the Supplemental Security Income (SSI) program, which provides income for individuals with disabilities who have limited income and resources. In 2008, SSA provided about $142 billion in financial benefits for these two programs. As part of the American Recovery and Reinvestment Act of 2009, the federal government also paid $250 to each SSA recipient, such as DI beneficiaries, SSI recipients, and old-age retirement beneficiaries. GAO was asked to (1) determine whether federal employees and commercial drivers and company owners may be improperly receiving disability benefits and (2) develop case study examples of individuals who fraudulently and/or improperly receive these benefits. To do this, GAO compared DI and SSI benefit data to civilian payroll records of certain federal agencies and carrier/driver records from the Department of Transportation (DOT) and 12 selected states. GAO also interviewed SSA disability beneficiaries and recipients.
GAO analysis of SSA and federal salary data found that there are indications that about 1,500 federal civilian employees may have improperly received benefits. In addition, GAO obtained data from 12 selected states and found that 62,000 individuals received or had renewed commercial driver's licenses after SSA determined that the individuals met the federal requirements for full disability benefits. Under DOT regulations, these individuals' eligibility must be medically certified every 2 years. Lastly, GAO found about 7,900 individuals with registered transportation businesses who were receiving SSA disability benefits. SSA regulations allow certain recipients to work and still receive their disability benefits. Thus, each case would require an investigation to determine whether there were fraudulent payments, improper payments, or both. The GAO analyses provide an indicator of potentially improper and fraudulent activity related to SSA benefits for federal employees, commercial drivers, and registrants of commercial vehicle companies. SSA currently does not perform a federal payroll or DOT records match to identify individuals improperly receiving benefits. GAO nonrepresentatively selected and investigated 20 examples of individuals who improperly and in some cases fraudulently received disability payments. For these 20 cases, SSA did not have the processes to effectively prevent improper and/or fraudulent payments. To see video clips of three individuals working at their federal jobs, see http://www.gao.gov/products/GAO-10-444. GAO identified several issues arising from the investigations. For example, SSA continued to improperly pay individuals who informed SSA of their employment. Using a process called Automated Earnings Reappraisal Operations (AERO), SSA examined the earnings for several individuals and automatically increased these individuals' disability payments because of raises in salary from their federal employment. SSA officials stated that they currently do not use AERO to identify individuals who have returned to work. In addition, 18 individuals received $250 stimulus payments while they were improperly receiving SSA disability payments. GAO makes two recommendations for SSA to detect and prevent fraudulent and improper payments. SSA agreed with our recommendations, but disagreed with some facts presented.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Gregory D. Kutz Team: Government Accountability Office: Forensic Audits and Special Investigations Phone: (202) 512-9505GAO-10-444, Social Security Administration: Cases of Federal Employees and Transportation Drivers and Owners Who Fraudulently and/or Improperly Received SSA Disability Payments
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
June 2010:
Social Security Administration:
Cases of Federal Employees and Transportation Drivers and Owners Who
Fraudulently and/or Improperly Received SSA Disability Payments:
GAO-10-444:
GAO Highlights:
Highlights of GAO-10-444, a report to congressional requesters.
Why GAO Did This Study:
The Social Security Administration (SSA) administers two of the
nation‘s largest cash benefits programs for people with disabilities:
the Social Security Disability Insurance (DI) program, which provides
benefits to workers with disabilities and their family members, and
the Supplemental Security Income (SSI) program, which provides income
for individuals with disabilities who have limited income and
resources. In 2008, SSA provided about $142 billion in financial
benefits for these two programs. As part of the American Recovery and
Reinvestment Act of 2009, the federal government also paid $250 to
each SSA recipient, such as DI beneficiaries, SSI recipients, and old-
age retirement beneficiaries.
GAO was asked to (1) determine whether federal employees and
commercial drivers and company owners may be improperly receiving
disability benefits and (2) develop case study examples of individuals
who fraudulently and/or improperly receive these benefits. To do this,
GAO compared DI and SSI benefit data to civilian payroll records of
certain federal agencies and carrier/driver records from the
Department of Transportation (DOT) and 12 selected states. GAO also
interviewed SSA disability beneficiaries and recipients.
What GAO Found:
GAO analysis of SSA and federal salary data found that there are
indications that about 1,500 federal civilian employees may have
improperly received benefits. In addition, GAO obtained data from 12
selected states and found that 62,000 individuals received or had
renewed commercial driver‘s licenses after SSA determined that the
individuals met the federal requirements for full disability benefits.
Under DOT regulations, these individuals‘ eligibility must be
medically certified every 2 years. Lastly, GAO found about 7,900
individuals with registered transportation businesses who were
receiving SSA disability benefits. SSA regulations allow certain
recipients to work and still receive their disability benefits. Thus,
each case would require an investigation to determine whether there
were fraudulent payments, improper payments, or both. The GAO analyses
provide an indicator of potentially improper and fraudulent activity
related to SSA benefits for federal employees, commercial drivers, and
registrants of commercial vehicle companies. SSA currently does not
perform a federal payroll or DOT records match to identify individuals
improperly receiving benefits.
GAO nonrepresentatively selected and investigated 20 examples of
individuals who improperly and in some cases fraudulently received
disability payments. The following table describes 3 of these cases.
Table: Examples of Fraudulent or Improper Disability Benefits:
Job performed: Screener for Transportation Safety Administration;
Estimated overpayment: $108,000;
State: California;
Case details: SSA approved disability benefits in 1995 for mood
disorders. Recipient began federal employment in 2003. For several
years, SSA notified recipient that the disability benefits will
increase based on the wages earned in the prior year.
Job performed: Home improvement contractor;
Estimated overpayment: Cannot be determined;
State: Maryland;
Case details: SSA approved disability benefits in 1998 for vascular
disease. Recipient admitted fraud to GAO, noting that the company is
operating under the spouse‘s name because he is on disability.
Job performed: Office assistant for Social Security Administration;
Estimated overpayment: $11,000;
State: Arizona;
Case details: SSA approved disability benefits in 2003 for mood
disorders. Although recipient began working for SSA in 2007, SSA had
no information on the employment in the SSA disability file.
Source: GAO.
[End of table]
For these 20 cases, SSA did not have the processes to effectively
prevent improper and/or fraudulent payments. To see video clips of
three individuals working at their federal jobs, see [hyperlink,
http://www.gao.gov/products/GAO-10-444]. GAO identified several issues
arising from the investigations. For example, SSA continued to
improperly pay individuals who informed SSA of their employment. Using
a process called Automated Earnings Reappraisal Operations (AERO), SSA
examined the earnings for several individuals and automatically
increased these individuals‘ disability payments because of raises in
salary from their federal employment. SSA officials stated that they
currently do not use AERO to identify individuals who have returned to
work. In addition, 18 individuals received $250 stimulus payments
while they were improperly receiving SSA disability payments.
What GAO Recommends:
GAO makes two recommendations for SSA to detect and prevent fraudulent
and improper payments. SSA agreed with our recommendations, but
disagreed with some facts presented.
View [hyperlink, http://www.gao.gov/products/GAO-10-444] or key
components. For more information, contact Gregory Kutz at (202) 512-
6722 or kutzg@gao.gov.
[End of section]
Contents:
Letter:
Background:
Federal Employees, Commercial Drivers, and Commercial Vehicle Company
Owners Received SSA Disability Benefits:
Examples of Individuals Receiving SSA Disability Benefits Fraudulently
and/or Improperly:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Examples of Individuals Receiving SSA Disability Benefits
Fraudulently and/or Improperly:
Appendix II: Attributes of Selected Cases of SSA Disability
Beneficiaries and Recipients Who Fraudulently and/or Improperly
Received Benefits While Working:
Appendix III: Debt Owed to SSA from Overpayment of DI and SSI Benefits
Is Mounting:
Appendix IV: Comments from the Social Security Administration:
Tables:
Table 1: Summary of Federal Employees Receiving SSA Benefits by Type
of SSA Disability Program:
Table 2: Case Studies 1 through 10 Showing That Federal Employees and
Commercial Vehicle Company Owners Improperly or Fraudulently Received
SSA Disability Benefits While Working:
Table 3: Case Studies 11 through 20 Showing That Federal Employees and
Commercial Vehicle Company Owners Improperly or Fraudulently Received
SSA Disability Benefits While Working:
Table 4: Attributes of Selected Cases of SSA Disability Beneficiaries
and Recipients Improperly Receiving Benefits While Working:
Figures:
Figure 1: Summary of Federal Employees by Employer:
Figure 2: CDL Drivers in 12 Selected States Receiving Social Security
Disability Benefits:
Figure 3: Total DI and SSI Overpayment Debt, 2004-2008:
Abbreviations:
AERO: Automated Earnings Reappraisal Operations:
CDL: commercial driver's license:
CDLIS: Commercial Driver License Information System:
CDR: continuing disability review:
DFAS: Defense Finance and Accounting Service:
DI: Disability Insurance:
DOD: Department of Defense:
DOT: Department of Transportation:
EPE: extended period of eligibility:
IRS: Internal Revenue Service:
OIG: Office of Inspector General:
SSA: Social Security Administration:
SGA: substantial gainful activity:
SSI: Supplemental Security Income:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
June 25, 2010:
The Honorable Thomas R. Carper:
Chairman:
The Honorable John McCain:
Ranking Member:
Subcommittee on Federal Financial Management, Government Information,
Federal Services, and International Security:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Tom Coburn:
United States Senate:
The Social Security Administration (SSA) administers two of the
nation's largest cash benefit programs for people with disabilities:
the Disability Insurance (DI) program,[Footnote 1] which provides
benefits to workers with disabilities and their family members, and
the Supplemental Security Income (SSI) program, which provides income
for aged, blind, or persons with disabilities, and limited income and
resources. In 2008, the DI program provided about $104 billion in
financial benefits to approximately 9 million beneficiaries[Footnote
2], and the SSI program provided about $38 billion in financial
benefits to approximately 7.5 million recipient[Footnote 3]s.:
An individual is considered eligible for disability benefits under
Social Security's regulations if he or she is unable to engage in any
substantial gainful activity (SGA) by reason of any medically
determinable physical or mental impairment that (1) can be expected to
result in death or (2) has lasted (or can be expected to last) for a
continuous period of not less than 12 months.[Footnote 4] For DI,
individuals are engaged in SGA if they have earnings above $940 per
month in calendar year 2008.[Footnote 5] DI also allows a 9-month
trial work period to test a beneficiary's ability to resume
employment.[Footnote 6] After the 9-month trial work period, SSA
beneficiaries are covered under an extended period of eligibility.
This is a 36-month period in which SSA does not pay any benefit
amounts (i.e., payments are suspended) if the beneficiary has earnings
above the maximum SSA SGA threshold. If earnings are under SGA, the
full benefit is paid. For SSI, every $2 of earnings generally reduces
the monthly benefit by $1 after an $85 monthly deductible.
As part of the American Recovery and Reinvestment Act of 2009
(Recovery Act), the federal government also recently paid DI
beneficiaries and SSI recipients $250 each to stimulate the economy.
[Footnote 7] Given the magnitude of these cash benefit payments, it is
important for SSA to have effective fraud prevention controls in place
to minimize fraudulent payments, improper payments, or both.
In this context, you asked us to determine whether federal workers,
commercial drivers, and commercial vehicle company owners are
fraudulently receiving disability benefits, improperly receiving such
benefits, or both. Specifically, you asked us to (1) determine whether
federal employees and commercial vehicle drivers and company owners
may be improperly receiving disability benefits and (2) develop case
study examples of individuals who fraudulently and/or improperly
receive these benefits. We plan to conduct subsequent investigations
to determine whether other employment-related databases indicate
whether individuals are fraudulently or improperly receiving
disability benefits. In addition, because we did not systematically
evaluate internal controls as part of this investigation, we plan to
review such controls at that time.
To determine the number of individuals who are employed with the
federal government and potentially receiving SSA disability benefits
improperly, we matched the civilian payroll records from the
Department of the Treasury, the U.S. Postal Service, and the Defense
Finance and Accounting Service (DFAS) from October 2006 to December
2008 to the SSA disability files of DI beneficiaries and SSI
recipients as of December 2008.[Footnote 8] The scope of our
investigation did not include Department of Defense (DOD) military
personnel who were improperly receiving SSA disability benefits. To
determine the number of commercial vehicle owners and commercial
drivers who were likely receiving DI and SSI benefits improperly, we
compared the Department of Transportation's (DOT) Motor Carrier
Management Information System file and Commercial Driver License
Information System (CDLIS) file to the SSA disability files of DI
beneficiaries and SSI recipients. Since DOT's CDLIS file contains both
active and inactive licenses, we also obtained data from a
nonrepresentative selection of 12 states to identify individuals who
maintain active commercial driver's licenses (CDL).[Footnote 9]
To illustrate actual cases of fraudulent payments and/or improper
payments from our overall analysis, we nonrepresentatively selected 20
cases that illustrate the types of fraudulent and improper activity we
found in SSA disability programs. The 20 cases were primarily selected
based on our analysis of SSA electronic and paper files for the higher
overpayment amounts, the types of employment, and the locations of
employment. Because this is a nonrepresentative selection, the results
of these 20 case investigations cannot be projected to other federal
employees, commercial drivers, or commercial vehicle owners who
received SSA disability payments. To develop these cases, we
interviewed, as appropriate, each beneficiary and the beneficiary's
employer. We also reviewed relevant SSA case file documents and
employer payroll records. We also videotaped employees who had
improperly received benefits working at their places of employment.
See [hyperlink, http://www.gao.gov/products/GAO-10-444]. Our case
study investigations only focused on individuals who were improperly
receiving SSA disability payments based on their employment
information. Analyzing and identifying fraud based on fraudulent
medical claims was beyond the scope of this investigation.
To determine the reliability of the SSA disability records, we
interviewed officials responsible for SSA's databases. In addition,
for the SSA disability records and the other databases used in our
investigation, we performed electronic testing to determine the
validity of specific data elements in the databases that we used to
perform our work. Based on our discussions with agency officials and
our own testing, we concluded that the data elements used for this
report were sufficiently reliable for our purposes.
We conducted our audit and investigative work from September 2008
through June 2010. We conducted our audit work in accordance with U.S.
generally accepted government auditing standards. Those standards
require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings
and conclusions based on our audit objectives. We believe that the
evidence obtained provides a reasonable basis for our findings and
conclusions based on our objectives. We performed our investigative
work in accordance with standards prescribed by the Council of the
Inspectors General on Integrity and Efficiency.
Background:
SSA administers two federal programs under the Social Security Act
that provide benefits to people with disabilities who are unable to
work: The DI program provides cash benefits to workers with
disabilities and their dependents based on their prior earnings. The
SSI program provides benefits to the elderly and individuals with
disabilities if they meet the statutory test of disability and have
income and assets that fall below levels set by program guidelines.
Disability Insurance:
The DI program was established in 1956 to provide monthly cash
benefits to individuals who were unable to work because of severe long-
term disability. SSA pays disability benefits to eligible individuals
under Title II of the Social Security Act. An individual is considered
eligible for disability benefits under the Social Security Act if he
or she is unable to engage in any SGA because of a medically
determinable impairment that (1) can be expected to result in death or
(2) has lasted (or can be expected to last) for a continuous period of
at least 12 months. To be eligible for benefits, individuals with
disabilities must have a specified number of recent work credits under
Social Security (specifically, working 5 out of the last 10 years or
20 quarters out of 40 quarters) at the onset of medical impairment. An
individual may also be able to qualify based on the work record of a
deceased spouse or of parent who is deceased, retired, or considered
eligible for disability benefits, meaning one disability beneficiary
can generate multiple monthly disability payments. Benefits are
financed by payroll taxes paid into the Federal Disability Insurance
Trust Fund by covered workers and their employers, based on each
worker's earnings history. Individuals are engaged in SGA if they have
earnings above $940 per month in calendar year 2008 or $980 per month
in calendar year 2009.
SSA conducts work-related continuing disability reviews (CDR) to
determine if beneficiaries are working at or above the SGA level. Each
beneficiary is allowed a 9-month trial work period, during which the
beneficiary is permitted to earn more than the SGA level without
affecting his or her eligibility for benefits. The trial work period
is one of several provisions in the DI program intended to encourage
beneficiaries to resume employment. Once the trial work period is
completed, beneficiaries are generally ineligible for future DI
benefits unless their earnings fall below the SGA level during the 36-
month extended period of eligibility (EPE). Work issue CDRs are
triggered by several types of events, although most are generated by
SSA's Continuing Disability Review Enforcement Operation. This process
involves periodic computer matches between SSA's administrative data
and Internal Revenue Service (IRS) wage data. Work CDRs can also be
triggered by other events. For example, SSA requires beneficiaries to
undergo periodic medical examinations to assess whether they continue
to be considered eligible for benefits. During such reviews, SSA's
staff sometimes discovers evidence that a beneficiary may be working
and usually forwards the case to an SSA field office or program
service center for earnings/work development. Additional events that
may trigger a work CDR include reports from state vocational
rehabilitation agencies, reports from other federal agencies, and
anonymous tips. Finally, DI beneficiaries may voluntarily report their
earnings to SSA by visiting an SSA field office or calling the
agency's toll-free number. SSA had increased work-related CDRs from
about 106,500 in fiscal year 2003 to about 175,600 in fiscal year
2006. However, the number of work CDRs has decreased slightly since
2006, and SSA projects that it will conduct about 174,200 work CDRs in
fiscal year 2010.
Supplemental Security Income:
Created in 1972, the SSI program is a nationwide federal cash benefit
program administered by SSA that provides a minimum level of income to
financially needy individuals who are aged, blind, or considered
eligible for benefits because of physical or mental impairments.
Payments under the SSI program are paid under Title XVI of the Social
Security Act and are funded from the government's General Fund, which
is financed through tax payments from the American public. Individuals
are not eligible for SSI payments for any period during which they
have income or resources that exceed the allowable amounts established
under the Social Security Act. In addition, relevant information will
be verified from independent or collateral sources to ensure that such
payments are correct and are only provided to eligible individuals.
SSI recipients are required to report events and changes of
circumstances that may affect their eligibility and payment amounts,
including changes in income, resources, and living arrangements. SSI
generally reduces the monthly benefit $1 for every $2 of monthly
earnings after the first $85.
SSA has implemented measures to help identify SSI recipients with
excess income, excess resources, or both, such as periodically
conducting redeterminations to verify whether recipients are still
eligible for and receiving the correct SSI payments. A redetermination
is a review of a recipient's nonmedical eligibility factors, such as
income, resources, and living arrangements. There are two types of
redeterminations: scheduled and unscheduled. Scheduled
redeterminations are conducted periodically depending on the
likelihood of payment error. Unscheduled redeterminations are
conducted based on a report of change in a recipient's circumstances
or if SSA otherwise learns about a change that may affect eligibility
or payment amount.
SSA has deferred a significant number of SSI redeterminations since
fiscal year 2003. Although SSA increased the number of SSI
redeterminations in fiscal year 2009 above the 2008 level, the number
of reviews remains significantly below the fiscal year 2003 level.
Specifically, SSA conducted about 719,000 SSI redeterminations in
fiscal year 2009, 30 percent fewer than it did in fiscal year 2003.
However, if SSA completes the number of SSI redeterminations it is
projecting for fiscal year 2010, it will be close to the fiscal year
2003 level.
Federal Employees, Commercial Drivers, and Commercial Vehicle Company
Owners Received SSA Disability Benefits:
Our overall analysis found thousands of federal employees, commercial
drivers, and owners of commercial vehicle companies who were receiving
Social Security disability benefits during fiscal year 2008. It is
impossible to determine from data mining alone the extent to which
beneficiaries improperly or fraudulently received disability payments.
To adequately assess an individual's work status, a detailed
evaluation of all the facts and circumstances should be conducted.
This evaluation would include contacting the beneficiary and the
beneficiary's employer, obtaining corroborating evidence such as
payroll data and other financial records, and evaluating the
beneficiary's daily activities. Based on this evaluation, a
determination can be made if the individual is entitled to continue to
receive SSA disability payments or have such payments suspended. As
such, our analysis provides an indicator of potentially improper or
fraudulent activity related to federal employees, commercial drivers,
and owners of commercial vehicle companies receiving SSA disability
payments.[Footnote 10] Our case studies, discussed later, confirmed
some examples in which individuals received SSA disability payments
that they were not entitled to receive.
Federal Employees Receiving SSA Disability Benefits:
Our analysis of federal civilian salary data and SSA disability data
found that about 7,000 individuals at selected agencies had been wage-
earning employees for the federal government while receiving SSA
disability benefits during fiscal year 2008. The exact number of
individuals who may be improperly or fraudulently receiving SSA
disability payments cannot be determined without detailed case
investigations. Our analysis of federal salary data from October 2006
through December 2008 found that about 1,500 federal employees'
records indicate that they may be improperly receiving payments.
[Footnote 11] The individuals were identified using the following
criteria: (1) DI beneficiaries who received more than 12 months of
federal salary payments above the maximum SSA earnings threshold for
the DI program (e.g., $940 per month for nonblind DI beneficiaries
during calendar year 2008) after the start date of their
disabilities[Footnote 12] or (2) SSI recipients who received more than
2 months[Footnote 13] of federal salary above the maximum SSA earnings
threshold for the SSI program after the start date of their
disabilities.[Footnote 14] Based on their SSA benefit amounts, we
estimate that these approximately 1,500 federal employees received
about $1.7 million of payments monthly.[Footnote 15],[Footnote 16]
Table 1 summarizes the types of SSA disability benefits for these
1,500 federal employees who are receiving disability benefits.
Table 1: Summary of Federal Employees Receiving SSA Benefits by Type
of SSA Disability Program:
Disability program: DI;
Number of federal employee beneficiaries: 1,097.
Disability program: SSI;
Number of federal employee beneficiaries: 306.
Disability program: Concurrent DI/SSI;
Number of federal employee beneficiaries: 84.
Disability program: Total;
Number of federal employee beneficiaries: 1,487.
Source: GAO analysis of SSA disability data.
[End of table]
Figure 1 shows that 379 of the approximately 1,500 federal employees
were U.S. Postal Service workers and 241 were DOD civilian employees.
The remainder was other federal civilian employees.
Figure 1: Summary of Federal Employees by Employer:
[Refer to PDF for image: pie-chart]
DOD civilian: 16% - 241;
U.S. Postal Service: 25% - 379;
Other federal civilian: 58% - 867.
Source: GAO analysis of federal payroll data.
Note: Percentages do not add to 100 because of rounding.
[End of figure]
According to SSA officials, SSA currently does not obtain payroll
records from the federal government to identify SSA disability
beneficiaries or recipients who are currently working. SSA officials
stated that they have not conducted a review to determine the
feasibility of conducting such a match. However, SSA acknowledged that
these payroll records may be helpful in more quickly identifying
individuals who are working so that work CDRs could be performed to
evaluate whether those individuals should have their disability
payments suspended.
Commercial Drivers and Transportation Business Registrants Receiving
SSA Disability Benefits:
Our analysis of data from DOT on commercial drivers and from SSA on
disability beneficiaries found that about 600,000 individuals had been
issued CDLs and were receiving full Social Security disability
benefits. The actual number of SSA disability beneficiaries with
active CDLs cannot be determined for two reasons. First, states
maintain the current status of CDLs, not DOT.[Footnote 17] Second,
possession of a CDL does not necessarily indicate that the individual
returned to work. Because federal regulations require interstate
commercial drivers to be examined and certified by a licensed medical
examiner to be able to physically drive a commercial vehicle once
every 2 years, we selected a nonrepresentative selection of 12 states
[Footnote 18] to determine how many SSA disability beneficiaries had
CDLs issued after their disabilities were determined by SSA. Of the
600,000 CDL holders receiving Social Security disability benefits,
about 144,000 of these individuals were from our 12 selected states.
As figure 2 shows, about 62,000 of these 144,000 individuals, or about
43 percent, had CDLs that were issued after SSA determined that the
individuals met the federal requirements for full disability benefits.
As a result, we consider the issuance of CDLs to be an indication that
these individuals may no longer have serious medical conditions and
may have returned to work.
Figure 2: CDL Drivers in 12 Selected States Receiving Social Security
Disability Benefits:
[Refer to PDF for image: illustration]
Data match:
DOT CDL data are matched against data from Social Security disability
programs.
50-state population:
Total 50-state population of CDL holders receiving medical disability
benefits is 600,000.
12-state analysis:
12 states are selected for analysis: California, Florida, Illinois,
Kentucky, Maryland, Michigan, Minnesota, Montana, Tennessee, Texas,
Virginia, and Wisconsin (144,000 CDL drivers).
43% are active and issued after disability: 62,000 licenses (43%) have
issue dates after disability start dates.
Sources: GAO (data), Art Explosion (graphics).
[End of figure]
Our analysis of DOT data on commercial carriers found about 7,900
individuals who registered as transportation businesses[Footnote 19]
and also received SSA disability benefits. The extent to which these
business registrants are obtaining disability benefits fraudulently,
improperly, or both is not known because each case must be
investigated separately for such a determination to be reached. These
companies may have gone out of business and not reported their closure
to DOT, which would explain their registration. In addition, DI
beneficiaries may have a passive interest in the business, which would
not affect their eligibility for benefits. However, we believe that
the registration of a business is an indicator that the individual
could be actively engaged in the management of the company and
gainfully employed, potentially disqualifying him or her from
receiving either DI or SSI benefits. It also suggests that the
individual's assets may exceed the SSI maximum for eligibility.
According to SSA officials, SSA currently does not obtain CDL or
transportation businesses registrant records from DOT. SSA officials
stated that these records do not have specific income records
associated with them.
Examples of Individuals Receiving SSA Disability Benefits Fraudulently
and/or Improperly:
Based on our overall analysis above, we nonrepresentatively selected
20 examples of federal employees, commercial drivers, and registrants
of commercial vehicle companies who received disability payments
fraudulently and/or improperly. As mentioned earlier, the 20 cases
were primarily selected based on our analysis of SSA electronic and
paper files for the higher overpayment amounts, the types of
employment, and the locations of employment, and thus they cannot be
projected to other federal employees, commercial drivers, or
commercial vehicle owners who received SSA disability payments. In
each case, SSA's internal controls did not prevent improper and
fraudulent payments, and as a result, tens of thousands of dollars of
overpayments were made to individuals for 18 of these 20 cases. In
fact, in one case, we estimate that SSA improperly paid an individual
over $100,000 in disability benefits. For 10 of the 20 cases, SSA
continued to pay these individuals their SSA disability benefits
through October 2009 primarily because the agency had not yet
identified their ineligibility for benefits. For the other cases, SSA
has terminated the disability benefits and has negotiated repayment
agreements for 2 of those cases.
Our investigations found that five individuals committed fraud in
obtaining SSA disability benefits because they knowingly withheld
employment information from SSA. Fraud is "a knowing misrepresentation
of the truth or concealment of a material fact to induce another to
act to his or her detriment."[Footnote 20] Although SSA instructions
provided to beneficiaries require them to report their earnings to SSA
in a timely manner to ensure that they remain eligible for benefits,
several individuals knowingly did not notify SSA of their employment.
Our investigations also found that 11 individuals potentially
committed fraud because these individuals likely withheld required
employment information from SSA. Most of these individuals claimed
that they reported their employment information to SSA. However,
according to SSA officials, for all 11 individuals, SSA did not have
any tangible documentation in its files that these individuals
actually reported their employment status to SSA. SSA officials stated
that their workers are required to document all contacts in their
files and that these purported contacts regarding employment
notifications were likely never made.
Finally, our investigations found four cases with no evidence of fraud
but, rather, of administrative error. In these situations, the
beneficiaries told our investigators that they reported their
employment to SSA and SSA had evidence in its files that such contact
did occur. Thus, we concluded that SSA made improper payments to these
individuals because SSA was aware of the employment but continued to
make disability payments to those individuals.
During our investigations of the 20 cases, we also noted the following:
* SSA has an automated process, called Automated Earnings Reappraisal
Operations (AERO), that screens changes in an individual's earnings
record and uses that information to compute changes in the monthly
disability benefit payment.[Footnote 21] However, SSA currently does
not use AERO to identify individuals who return to work and alert SSA
staff to review these individuals' records for possible suspension of
disability payments. As a result, SSA increased the monthly disability
benefits of several individuals based on the higher wages the
individuals' current employers reported to the agency but did not
properly suspend the payments to those individuals.
* Four individuals received additional disability benefits because
they had dependent children living with them.
* One individual was hired by a federal agency during the required
waiting period prior to becoming eligible for benefits. This
individual also improperly received additional government medical
assistance (i.e., Medicare) based on the SSA disability determination.
[Footnote 22]
* Certain individuals who claim that they are unable to immediately
repay the disability benefits they improperly received can be put on
long-term repayment plans that span years or decades. Although SSA has
the authority to charge interest and penalties, SSA did not do so on
these agreements. As a result, several individuals from our cases were
placed in long-term, interest-free repayment plans for improperly
accepting disability overpayments. For 1 of our 20 cases, SSA placed
an individual on a repayment plan to repay approximately $33,000 in
overpayments through $20 monthly installments. Based on this
agreement, it will take over 130 years to repay this debt, exceeding
the life expectancy for this individual.
For 18 of these 20 cases, the individuals also received $250 stimulus
checks as part of the Recovery Act while they were improperly
receiving SSA disability payments. According to SSA officials, most of
these individuals were entitled to and would receive the $250 stimulus
checks even if SSA had properly suspended the disability payments to
them. Specifically, SSA officials stated that beneficiaries covered
under the DI program would have been covered under EPE, which is a 36-
month period in which SSA does not pay any benefit amounts (i.e.,
payments are suspended) if the beneficiary has earnings above the
maximum SSA SGA threshold. According to SSA officials, all working
beneficiaries covered by EPE received the $250 stimulus check.
The Recovery Act states that these stimulus benefit payments should be
provided to individuals who are entitled to DI benefit payments or are
eligible for SSI cash benefits.[Footnote 23] SSA stated that it did
not seek a formal legal determination as to whether individuals who
had their payments suspended because of employment should receive
these stimulus payments. In total, SSA paid about $10.5 million in
stimulus payments to approximately 42,000 individuals who were covered
by EPE.[Footnote 24] However, we believe that a question exists as to
whether these payments were proper and believe that SSA should have at
least sought a formal legal opinion before making the payments.
* Table 2 highlights 10 of the 20 individuals we investigated. Table 3
in appendix I describes the other 10 individuals that we investigated.
For 3 of these 20 cases, we videotaped the individuals who had
improperly received disability benefits working at their federal
government jobs. (See [hyperlink, http://www.gao.gov/products/GAO-10-
444]). In all 20 cases, we found that SSA had improperly paid the
Social Security disability benefits.
Table 2: Case Studies 1 through 10 Showing That Federal Employees and
Commercial Vehicle Company Owners Improperly or Fraudulently Received
SSA Disability Benefits While Working:
Case no.: 1;
Details:
* Based on our investigation, the beneficiary did not appear to have
committed fraud but SSA made improper payments to the beneficiary;
* The beneficiary was a Department of Justice attorney who worked in
California. The estimated overpayment was about $20,000;
* SSA approved DI payments starting in January 2006 for chronic
obstructive pulmonary disease;
* In April 2007, SSA sent a letter to the beneficiary thanking him for
contacting the agency to report his employment;
* In May 2007, SSA notified the beneficiary that based on his
employment the trial work period began in January 2007;
* The beneficiary told our investigator that he contacted SSA by phone
and by mail in January 2008 informing the agency that the trial work
period was over and thus the benefit payments should cease;
* In February 2008, SSA notified the beneficiary that "your disability
has ended and you are not entitled to payments beginning in February
2008," but the monthly benefit payments continued;
* In August 2008, SSA notified the beneficiary that "we paid you
$1,954 in February and we should have paid you $0," but the monthly
benefit payments continued;
* In November 2008, SSA notified the beneficiary that based on wages
earned in 2007 his monthly benefits would be increased to $1,967;
* Beneficiary reached full retirement age in January 2009 and now
receives monthly SSA retirement benefits;
* At the time the beneficiary was receiving disability benefits, the
beneficiary was generally making over $6,000 monthly in federal salary;
* According to SSA officials, SSA staff did complete a work CDR on the
individual and determined that the disability payments should be
suspended. SSA officials stated that in this case, SSA did not
complete the manual steps to suspend the disability payments.
Case no.: 2;
Details:
* Our investigation found that the beneficiary committed fraud in
obtaining SSA disability payments;
* The beneficiary was a Transportation Safety Administration screener
who worked in California. The estimated overpayment was about $108,000;
* SSA approved DI payments starting in 1995 for mood and anxiety
disorders;
* The beneficiary began full-time federal employment in 2003. From
2003 through 2008 her annual earnings were from $36,000 to $50,000;
* SSA requested a Work Activity Report from the beneficiary in April
2005, but the beneficiary did not provide it;
* In November 2005, SSA notified the beneficiary that based on wages
earned in 2004 her benefits would be increased;
* SSA's case file indicates that in July 2006 the beneficiary called
SSA and stated that she did not want SSA to contact her employer for
work review and that she would submit a Work Activity Report as soon
as possible. SSA records do not indicate that the beneficiary provided
this report;
* In November 2006, SSA notified the beneficiary that based on wages
earned in 2005 her benefits would be increased;
* In November 2007, SSA notified the beneficiary that based on wages
earned in 2006 her benefits would be increased;
* As of October 2009, SSA continued to pay the beneficiary a monthly
benefit. The beneficiary also received a $250 economic stimulus
payment;
* The beneficiary stated that she is working full-time and receiving
disability benefits;
* According to SSA officials, SSA has subsequently suspended the
beneficiary's disability benefit payments for failure to cooperate in
a medical disability review in the latter part of 2009;
* The beneficiary resides in a house that is currently listed for sale
at about $1,800,000.
Case no.: 3;
Details:
* Our investigation found that the beneficiary committed fraud in
obtaining SSA disability payments;
* The beneficiary was a home improvement contractor located in
Maryland. The estimated overpayment could not be determined;
* SSA approved DI payments starting in 1998 for back disorders and
vascular disease;
* The beneficiary owns an active construction business registered with
DOT;
* The beneficiary stated that his home improvement business includes
drywall, roofing, carpeting, siding, decks, kitchens, and any other
home improvement work. We found evidence of fraud by the beneficiary,
who stated that he puts everything in his wife's name because he is on
disability for heart problems;
* The beneficiary stated that he always has at least two jobs going on
at a time and that he has three trucks;
* Our investigators observed the beneficiary driving a pickup truck
with ladders attached to the roof. The Maryland Home Improvement
Contractor license displayed on the side of another truck on the
property is listed under the wife's name;
* In April 2006, SSA notified the beneficiary that the State of
Maryland will pay the Medicare medical insurance premium beginning in
February 2006;
* In June 2009, SSA notified the beneficiary that the agency had
received his application for help with Medicare prescription drug plan
costs. The application asked "Have you worked in 2008 or 2009?" SSA
records indicate that the beneficiary answered "No." Later in the
month, SSA notified the beneficiary that he is automatically eligible
for extra help with Medicare prescription drug plan costs because he
receives DI, Medicaid, or participates in the Medicare Savings Program;
* As of October 2009, SSA continued to pay the beneficiary a monthly
benefit of $1,072. SSA also sent the beneficiary the $250 economic
stimulus payment;
* According to SSA officials, no work CDR has been conducted for this
beneficiary and no earnings information exist in his records.
Case no.: 4;
Details:
* Our investigation found that the beneficiary potentially committed
fraud in obtaining SSA disability payments;
* The beneficiary was an X-ray technician for the Department of
Veterans Affairs who worked in California. The estimated overpayment
was about $22,000;
* SSA approved DI payments starting in 2002 for an infection;
* SSA records indicate that the beneficiary returned to work in August
2007. In February 2008, SSA notified the beneficiary that based on his
employment the trial work period began in August 2007;
* In August 2008, SSA notified the beneficiary that "your disability
has ended and you are not entitled to payments beginning in October
2008," but the monthly benefit payments continued;
* The beneficiary stated that he wrote SSA when the trial work period
was over and requested that the benefit payments stop. According to
SSA records, the beneficiary did not contact the agency as required;
* The beneficiary stated that he is holding the money that SSA keeps
sending him because he knows that he will eventually have to pay it
back;
* As of October 2009, SSA continued to send the beneficiary a monthly
benefit payment of $1,986. SSA also sent the beneficiary a $250
economic stimulus payment;
* According to SSA records, a work CDR was conducted for the
individual in May 2009. SSA officials confirmed that the overpayment
amount was about $22,000.
Case no.: 5;
Details:
* Our investigation found that the beneficiary committed fraud in
obtaining SSA disability payments;
* The beneficiary was a laundry worker for the Department of Veterans
Affairs who worked in West Virginia. The estimated overpayment was
about $39,000;
* The beneficiary began work as a textile care production worker,
earning around $35,000 per year in April 2007;
* The position description for the job states that continuous
standing, walking, stretching, stooping, bending, and arduous labor
are required in the position. The shift supervisor stated that the
beneficiary performs all the regular functions of the job and that no
special accommodations have been arranged for his work;
* SSA approved DI payments starting in August 2007 for back disorders
and mood disorders. At the time of SSA approval for DI, the
beneficiary was working full-time at the Department of Veterans
Affairs;
thus the beneficiary was never entitled to any disability payments;
* In November 2008, SSA notified the beneficiary that based on wages
earned in 2007 his benefits would be increased;
* In July 2009, SSA notified the beneficiary that he was entitled to
Medicare hospital and medical insurance beginning in August 2009;
* The beneficiary stated that SSA said he could work even though he
was on disability. The beneficiary stated that he did not know that he
was supposed to report to SSA when he began working;
* As of October 2009, SSA continued to send the beneficiary a monthly
benefit payment of $1,236. SSA also sent the beneficiary a $250
economic stimulus payment;
* SSA officials stated that the recipient returned to work prior to
his eligibility start date and was therefore not eligible for any SSA
disability benefits.
Case no.: 6;
Details:
* Our investigation found that the beneficiary potentially committed
fraud in obtaining SSA disability payments;
* The beneficiary was a letter carrier for the U.S. Postal Service who
worked in Texas. The estimated overpayment was about $27,000;
* SSA approved DI payments starting in December 2006 for
affective/mood disorders;
* The beneficiary stated that she began work for the U.S. Postal
Service in the summer of 2007, and that prior to that she worked for
United Parcel Service;
* In April 2007, SSA notified the beneficiary that based on wages
earned in 2006 her benefits would be increased;
* In November 2008, SSA notified the beneficiary that she was entitled
to Medicare hospital and medical insurance beginning in December 2008;
* In November 2008, SSA notified the beneficiary that based on wages
earned in 2007 her benefits would be increased;
* In August 2009, on the day of our interview, the beneficiary was
terminated from the U.S. Postal Service for an incident between her
and a customer;
* According to SSA records, the beneficiary did not contact the agency
as required;
* As of October 2009, SSA continued to send the beneficiary a monthly
benefit payment of $1,477. SSA also sent the beneficiary a $250
economic stimulus payment;
* According to SSA officials, they have not conducted a work CDR for
this individual.
Case no.: 7;
Details:
* Our investigation found that the beneficiary committed fraud in
obtaining SSA disability payments;
* The beneficiary was a truck company owner and driver located in
Texas. The estimated overpayment could not be determined;
* SSA approved DI payments starting in 1991 for disorders of the back;
* DOT records show that the beneficiary applied for a Motor Carrier
DOT number in May 2008, and that provisional authority had been
granted in December 2007;
* DOT's new entrant safety audit for the carrier in April 2008 stated
that the company is a corporation owned and managed by the
beneficiary, who was present for the audit. It also specified that the
carrier had two drivers, two tractor trailers, and gross income of
approximately $84,000 through the end of that year. DOT identified the
beneficiary as one of the drivers;
* State records indicate that the corporation is a limited liability
company and the beneficiary is the registered agent and manager;
* The beneficiary stated that he oversees the business, that it
steadily employs three drivers, and that he had recently fired a
driver. He stated that his daughter does the scheduling and
dispatching;
* The beneficiary stated that he had an operation in the 1990s in
which screws were put into his back and that he is on pain medication
for life. DOT records indicate that he has a CDL and that he had two
roadside inspections in 2008, in Florida and Texas, providing further
evidence of SGA;
* The beneficiary stated that the income from his business is reported
to IRS;
* As of October 2009, SSA continued to pay the beneficiary a monthly
disability benefit of $1,824. SSA also sent the beneficiary a $250
economic stimulus payment;
* SSA conducted a work CDR for the recipient in January 2007.
According to SSA, the individual owns a trucking company but does no
work.
Case no.: 8;
Details:
* Our investigation found that the beneficiary potentially committed
fraud in obtaining SSA disability payments;
* The beneficiary was a legal assistant for SSA who worked in Arizona.
The estimated overpayment was about $11,000;
* SSA approved DI payments starting in 2003 for affective/mood
disorders and osteoarthrosis;
* The beneficiary began working for SSA in the third quarter of 2007;
* According to SSA records, the beneficiary did not contact the agency
as required;
* In November 2008, SSA notified the beneficiary that based on wages
earned in 2007 her benefits would be increased;
* The SSA Office of Inspector General opened an investigation of the
employee after we informed the agency of her employment status;
* According to SSA officials, SSA disability programs do not have
access to SSA's payroll records to determine whether their employees
are receiving disability payments and thus should be evaluated for
eligibility;
* SSA sent the beneficiary a $250 economic stimulus payment;
* SSA officials stated that a work CDR for the recipient is pending.
Case no.: 9;
Details:
* Our investigation found that the beneficiary committed fraud in
obtaining SSA disability payments;
* The beneficiary was a mail clerk for the U.S. Postal Service who
worked in Pennsylvania. The estimated overpayment was about $19,000;
* SSA approved DI payments starting in 2006 for a brain tumor;
* The beneficiary stated that she returned to work in 2007;
* The beneficiary stated that around July 2009 she received a
statement from SSA that the agency had found out about her working and
that her benefits were to be terminated. SSA stated that she would
have to repay about $19,000 in benefits;
* The beneficiary stated that she agreed to repay $100 per month by
check and that she will likely die before paying back the full debt;
* We found evidence of fraud when the beneficiary stated that she knew
she was supposed to notify SSA of her work but that she did not
because she needed the money;
* SSA sent the beneficiary a $250 economic stimulus payment.
Case no.: 10;
Details:
* Our investigation found that the beneficiary potentially committed
fraud in obtaining SSA disability payments;
* The beneficiary was a letter carrier for the U.S. Postal Service who
worked in Michigan. The estimated overpayment was about $45,000;
* SSA approved DI payments starting in May 2004 for mood and
personality disorders;
* SSA records indicate that the beneficiary returned to work in
December 2004 and completed her trial work period in December 2005.
However, her monthly payments continued through March 2007. According
to SSA records, the beneficiary did not contact the agency as required;
* SSA records indicate that 18 months later, in October 2008, her
monthly payments resumed;
* The beneficiary stated that when the payments resumed in October
2008, she assumed that the rules had changed and she was eligible
again;
* The beneficiary stated that she did not feel she should have to pay
anything back to SSA, since she did what SSA wanted. The beneficiary
also stated that she was upset that SSA is deducting Medicare premiums
from her current payment, when she has good health care coverage from
the U.S. Postal Service;
* The beneficiary stated that her condition does not keep her from
working. As of October 2009, SSA continued to pay beneficiary a
monthly benefit of $1,358. SSA also sent beneficiary a $250 economic
stimulus payment;
* SSA records indicate that a repayment was made in 2008 for about
$37,000.
Source: GAO.
[End of table]
Appendix I provides details on the other 10 cases we investigated.
Appendix II provides a summary of the key attributes from our
investigations of the 20 cases. We referred all 20 cases to SSA
management for collection action. The SSA Office of Inspector General
has been informed of the 5 cases that we believe committed fraud. We
also referred the case involving the SSA employee to the SSA Office of
Inspector General for investigation.
Conclusions:
While it is important to encourage individuals with disabilities to
return to work, SSA must also ensure that it has an effective system
in place to maintain its program integrity. SSA has a stewardship
responsibility to identify those individuals who have returned to work
and are no longer eligible for benefits. Because of limited resources,
SSA must effectively allocate its resources to identify such
individuals. Federal payroll records and the AERO process are tools
that SSA could utilize to timely initiate reviews and minimize
improper and fraudulent payments.
Recommendations for Executive Action:
To enhance SSA's ability to detect and prevent fraudulent and improper
payments in its disability programs, we recommend that the
Commissioner of Social Security take the following two actions to
improve the agency's processes:
* Evaluate the feasibility (including consideration of any costs and
operational and system modifications) of incorporating the AERO
process to identify individuals who have returned to work.
* Evaluate the feasibility of periodically matching SSA disability
beneficiaries and recipients to federal payroll data. Such matches
would provide SSA with more timely data to help SSA systematically and
more effectively identify federal employees who are likely to incur
overpayments.
Agency Comments and Our Evaluation:
We provided a draft of this report to SSA and DOT for comment. DOT
stated that it did not have comments on the report. SSA's comments,
along with our responses, are reprinted in appendix IV, and its
technical comments were incorporated throughout the report as
appropriate.
SSA agreed with all our recommendations. SSA stated that it will
evaluate the feasibility of using the AERO process. In addition, SSA
stated that it will review the efficacy of matching federal salary
payment records with SSA disability files of DI beneficiaries and SSI
recipients. We encourage SSA to follow through on these
recommendations. SSA also expressed concern that the overall message
of our report is misleading and in some cases factually incorrect. We
believe our report accurately describes the cases and our methodology.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies to interested
congressional committees, the Commissioner of Social Security, and the
Secretary of Transportation. The report also will be available at no
charge on the GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-6722 or kutzg@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report.
Signed by:
Gregory D. Kutz:
Managing Director:
Forensic Audits and Special Investigations:
[End of section]
Appendix I: Examples of Individuals Receiving SSA Disability Benefits
Fraudulently and/or Improperly:
This appendix presents summary information on fraudulent and improper
payments associated with 10 of our 20 case studies. Table 3 shows the
remaining case studies that we audited and investigated. As with the
10 cases discussed in the body of this report, the Social Security
Administration (SSA) did not prevent improper payment of Social
Security disability benefits to these individuals. We referred all 20
cases to SSA management for collection action. The SSA Office of
Inspector General has been informed of the 5 cases that we believe
committed fraud. We also referred the case involving the SSA employee
to the SSA Office of Inspector General for investigation.
Table 3: Case Studies 11 through 20 Showing That Federal Employees and
Commercial Vehicle Company Owners Improperly or Fraudulently Received
SSA Disability Benefits While Working:
Case no.: 11;
Details:
* Our investigation found that the beneficiary potentially committed
fraud in obtaining SSA disability payments;
* The beneficiary was a mail handler for the U.S. Postal Service who
worked in Texas. The estimated overpayment was about $53,000;
* The beneficiary stated that he suffered a stroke in February 2006.
Based on this disability, SSA began making Disability Insurance (DI)
benefit payments in August 2006;
* The beneficiary returned to work in September 2006. He stated that
at that time he verbally notified SSA that he had resumed employment.
The beneficiary stated that he also informed SSA that he returned to
work at the end of 2007. According to SSA records, the beneficiary did
not contact the agency as required;
* SSA records indicate that for 2007 and 2008 the beneficiary earned
from $70,000 to $80,000;
* The beneficiary was still working full-time and receiving a $1,168
monthly benefit in August 2009;
* The beneficiary stated that his child also receives a monthly
benefit based on his claim. SSA records indicate that the child's
monthly benefit is around $400;
* SSA also sent the beneficiary a $250 economic stimulus payment;
* The beneficiary stated that he is ready to pay back any overpayments;
* SSA is in the process of reviewing this case.
Case no.: 12;
Details:
* Our investigation found that the beneficiary potentially committed
fraud in obtaining SSA disability payments;
* The beneficiary worked in inventory management for the U.S. Mint in
California. The estimated overpayment was about $36,000;
* SSA approved DI payments starting in 2004 for skin cancer and an
infection;
* SSA records indicate that the beneficiary returned to work in April
2007;
* The beneficiary stated that when the 9-month trial work period
ended, he wrote SSA requesting that the agency stop the payments, but
the monthly benefit payment continued. According to SSA records, the
beneficiary did not contact the agency as required;
* In July 2008, SSA notified the beneficiary that since substantial
work had been performed, his eligibility for disability benefits had
ended. However, the monthly payments never stopped;
* The beneficiary generally made about $4,500 in net monthly salary at
the time that he was improperly receiving disability benefits;
* In November 2008, SSA notified the beneficiary that based on wages
earned in 2007 his DI benefits would be increased;
* As of October 2009, SSA continued to send the beneficiary a monthly
benefit payment of $1,507. SSA also sent the beneficiary a $250
economic stimulus payment;
* According to SSA officials, SSA staff did complete a work continuing
disability review (CDR) on the individual and determined that the
disability payments should be suspended. SSA officials stated that in
this case, SSA did not complete the manual steps to suspend the
disability payments.
Case no.: 13;
Details:
* Based on our investigation, the beneficiary did not appear to have
committed fraud but SSA made improper payments to the beneficiary;
* The beneficiary was an administrative specialist for the Small
Business Administration who worked in Virginia. The estimated
overpayment was about $12,000;
* SSA approved DI payments starting in 1996 for multiple infections;
* The beneficiary stated that he returned to work full-time in
November 2006, and that he notified SSA by both telephone and e-mail
in January 2007 of his full-time employment. SSA records indicate that
the beneficiary reported full-time wages beginning in December 2006;
* The beneficiary stated that about 6 months after his initial
notification, he again contacted SSA and sent the agency copies of his
pay stubs;
* In August 2007, SSA sent a letter to the beneficiary acknowledging
receipt of information to support eligibility for payments. The letter
acknowledged that the beneficiary reported full-time wages beginning
in December 2006;
* In November 2007, SSA notified the beneficiary that based on wages
earned in 2006 his benefits would be increased;
* In November 2008, SSA notified the beneficiary that based on wages
earned in 2007 his benefits would be increased;
* The beneficiary stated that after 2 years of full-time work, he
again contacted SSA and implored the agency to stop paying him because
he knew something was not right and that he would have to return the
money;
* In February 2009, SSA notified the beneficiary that he was no longer
entitled to payments beginning in October 2007. SSA stated that
because it did not stop the payments until February 2009, the
beneficiary owed over $12,000 in overpayment of benefits;
* SSA also sent the beneficiary a $250 economic stimulus payment
despite SSA records showing that the beneficiary was ineligible since
October 2007;
* According to SSA officials, the individual is in a repayment plan
for $100 a month.
Case no.: 14;
Details:
* Our investigation found that the beneficiary potentially committed
fraud in obtaining SSA disability payments;
* The beneficiary was a psychology aide for the Department of Veterans
Affairs who worked in Florida. The estimated overpayment was about
$33,000;
* SSA approved DI payments starting in 1996 for muscular dystrophy;
* The beneficiary began federal employment in 2007, earning from
$31,000 to $42,000 per year;
* The beneficiary stated that he notified SSA about his return to work
through the 1-800 number a month after he returned to work, a month
after that, then a third time about 4 months after starting work. The
beneficiary stated that SSA told him that it would be noted in the
system that he had called. According to SSA records, the beneficiary
did not contact the agency as required;
* In September 2008, SSA notified the beneficiary that "your
disability has ended and you are not entitled to payments." The notice
stated that the trial work period ended in September 1998, 10 years
prior;
* In November 2008, SSA notified the beneficiary that based on the
wages he earned in 2007, it would be increasing his benefits. The
agency also noted that it would send a payment of $4,478 on or about
December 3, 2008, that would include the new regular monthly benefit,
plus the difference between what SSA actually paid in 2008 and what it
should have paid according to the wage increase;
* In January 2009, SSA notified the beneficiary that it had paid him
$32,858 too much in benefits. SSA stated that he should refund this
overpayment within 30 days. SSA placed the beneficiary in a repayment
plan for $20 per month;
* The beneficiary stated that he requested a waiver of the overpayment
amount and is awaiting SSA's response.
Case no.: 15;
Details:
* Based on our investigation, the recipient did not appear to have
committed fraud but SSA made improper payments to the recipient;
* The recipient was a mail clerk for the U.S. Postal Service who
worked in Washington, D.C. The estimated overpayment was about $16,000;
* SSA approved Supplemental Security Income (SSI) payments starting in
2003 for affective/mood disorders and anxiety disorders;
* U.S. Postal Service records indicate that the recipient began full-
time work in November 2004. From 2005 through 2008, her annual
earnings were from $39,000 to $47,000;
* In February 2007, SSA notified the recipient that "because of your
income, you are not eligible to receive SSI payments for January 2005
on." The notice stated that SSA would stop the payments beginning in
March 2007;
* In March 2007, SSA notified the recipient of the overpayment of
about $8,000 in SSI benefits. The overpayment happened from February
2006 through February 2007;
* SSA records show that SSI payments resumed in November 2007 for
several months. SSA withheld 10 percent of the monthly payment and
applied it to the overpayment balance;
* SSA records show that in March 2008, the recipient called to report
that she started working last month and that she wanted SSA to stop
her SSI benefits. The records show that she did not want to provide
the name of her employer, but stated that she was earning about $1,000
a month and wanted her benefits cut off;
* In November 2008, SSA notified the recipient that starting in
January 2009 the benefit due was being raised to $674 a month. The
recipient then received couple of months of disability benefits;
* U.S. Postal Service records indicate that the recipient retired in
August 2009;
* As of October 2009, SSA continued to pay the recipient a monthly
benefit. SSA also sent the recipient a $250 economic stimulus payment;
* According to SSA officials, SSA subsequently suspended the
recipient's disability benefit payments for failure to cooperate.
Case no.: 16;
Details:
* Our investigation found that the beneficiary potentially committed
fraud in obtaining SSA disability payments;
* Beneficiary was a human resources specialist for the Defense
Logistics Agency who worked in Ohio. The estimated overpayment was
about $25,000;
* SSA approved DI payments starting in 2002 for muscular disorders;
* The beneficiary stated that she returned to work in March 2005 and
that she notified SSA about her return to work via telephone. The
beneficiary stated that she called SSA again in December 2005 and
January 2006 and requested that her benefit payments stop. According
to SSA records, the beneficiary did not contact the agency as required;
* SSA records indicate that the benefit payments did stop after
January 2006. However, SSA started the payments again in August 2007,
before the payments were eventually stopped in March 2009;
* In November 2008, SSA notified the beneficiary that based on wages
earned in 2007 her benefits would be increased;
* SSA records indicate that benefit payments were made through
February 2009;
* The beneficiary stated that no one from SSA has ever contacted her
asking for repayment;
* SSA sent the beneficiary a $250 economic stimulus payment.
Case no.: 17;
Details:
* Based on our investigation, the beneficiary did not appear to have
committed fraud but SSA made improper payments to the beneficiary;
* The beneficiary was a mail clerk for the U.S. Postal Service who
worked in Ohio. The estimated overpayment was about $21,000;
* SSA approved DI payments starting in 2003 for back disorders;
* The beneficiary stated that she returned to work in June 2007 and
called the SSA 1-800 number to inform the agency of her return to work;
* The beneficiary received a notice from SSA in September 2007,
stating that June 2007 was the first month of the trial work period.
The notice also stated that SSA had scheduled the claim for review in
February 2008 since it appeared that the ninth month of the trial work
period would end at that time;
* The beneficiary stated that in February 2008, she received a letter
from SSA stating that her disability payments would be terminated, but
the monthly benefit payments continued;
* The beneficiary stated that after 2 to 3 months, she called SSA
again and requested that the payments be stopped;
* The beneficiary stated that she has not been notified by SSA of any
overpayment, and that she is segregating the payments from her regular
funds so she will be able to pay the debt;
* As of October 2009, SSA continued to pay the beneficiary a monthly
benefit of $1,334. SSA also sent the beneficiary a $250 economic
stimulus payment;
* According to SSA officials, the beneficiary has recently paid about
$21,000 to SSA for the full overpayment amount.
Case no.: 18;
Details:
* Our investigation found that the beneficiary potentially committed
fraud in obtaining SSA disability payments;
* The beneficiary was a mail clerk for the U.S. Postal Service who
worked in New York. The estimated overpayment was about $58,000;
* SSA approved DI payments starting in 2003 for back disorders;
* The beneficiary stated that he returned to work in November 2005,
and that shortly thereafter he visited a local SSA office to notify
the agency of his employment. The beneficiary stated that about a year
later he again went in person to the local SSA office to discuss
terminating his benefits, but the benefits continued. According to SSA
records, the beneficiary did not contact the agency as required;
* In November 2006, SSA notified the beneficiary that based on wages
earned in 2005 his benefits would be increased;
* In November 2007, SSA notified the beneficiary that based on wages
earned in 2006 his benefits would be increased;
* In November 2008, SSA notified the beneficiary that based on wages
earned in 2007 his benefits would be increased;
* As of October 2009, SSA continued to pay the beneficiary a monthly
benefit of $1,775. SSA also sent the beneficiary a $250 economic
stimulus payment.
Case no.: 19;
Details:
* Our investigation found that the recipient potentially committed
fraud in obtaining SSA disability payments;
* The recipient was a nursing assistant for the Department of Veterans
Affairs who worked in Texas. The estimated overpayment was about
$14,000;
* SSA approved SSI payments starting in 2002 for a benign brain tumor;
* SSA records show that recipient returned to work in October 2006.
The recipient started full-time federal employment in November 2007;
* The recipient stated that he kept SSA informed of all the changes
required to be reported, such as a change of address and work status.
He said that he used the SSA 1-800 telephone number to report these
changes, but was not asked to provide actual dollar earnings. SSA
officials stated that their records indicated that he contacted SSA
about the change in address but not about his work status, thus not
providing the required disclosure to SSA;
* SSA sent the recipient benefit payments of $449 until June 2009. SSA
also sent the recipient a $250 economic stimulus payment;
* In June 2009, SSA notified the recipient of the $14,000 overpayment
of SSI benefits from October 2006 through June 2009;
* The recipient stated that he really thought it was his money to use,
and that making the repayments is a hardship for him;
* According to SSA officials, the recipient is currently repaying SSA
$200 per month.
Case no.: 20;
Details:
* Our investigation found that the recipient potentially committed
fraud in obtaining SSA disability payments;
* The recipient was a clerk for the Internal Revenue Service (IRS) who
worked in Texas. The estimated overpayment was about $11,000;
* SSA approved SSI payments starting in 1991 for late effects of polio;
* The recipient stated that she began working for IRS on a part-time
basis in 2000, and every year notified SSA that she was working;
* In May 2005, SSA notified the recipient that it had overpaid her
$4,400 in SSI benefits. The notice stated that to collect the
overpayment, SSA would withhold $25 per month from her ongoing SSI
payments. The notice stated that she will resume receiving the full
regular monthly payment in the year 2020;
* The recipient stated that she transitioned to full-time permanent
status in September 2008, and at that time she informed SSA of her
employment status. According to SSA records, the recipient did not
contact the agency as required;
* In July 2009, SSA notified the recipient of a $6,800 overpayment of
SSI benefits for the period of February 2008 through July 2009. The
notice stated that this amount is in addition to the prior overpayment
of $4,400;
* SSA sent the recipient a $250 economic stimulus payment;
* According to SSA officials, a work CDR was conducted and the
estimated overpayment was about $11,000.
Source: GAO.
[End of table]
[End of section]
Appendix II: Attributes of Selected Cases of SSA Disability
Beneficiaries and Recipients Who Fraudulently and/or Improperly
Received Benefits While Working:
Our investigations detailed examples of 20 federal employees,
commercial drivers, and owners of commercial vehicle companies who
fraudulently and/or improperly received disability payments. For the
20 cases, our investigations found the following:
* For six cases, SSA eventually identified the disability overpayment
and sent notification letters to the individuals indicating that they
would have to repay the debts.
* For 10 cases, the individuals were continuing to receive disability
benefits as of October 2009.
* For 14 cases, the individuals claimed to have notified SSA that they
had returned to work or that it should terminate the disability
benefits because they were no longer eligible because of employment
income. However, for only 4 of these 14 cases did SSA have indications
in its records that the individuals notified SSA of the return to work
or requested termination of disability benefits.
* For 10 cases, SSA improperly increased the benefit amounts of the
disability payments because the individuals had increases in the
reported wages on which the disability benefit payments are based.
* For 18 cases, SSA sent the SSA beneficiaries and recipients the $250
economic stimulus check.
* For five cases, we believe that there is sufficient evidence that
the beneficiaries committed fraud to obtain or continue receiving
Social Security disability payments.[Footnote 25] For each of these
five cases, we concluded that the individual withheld employment
information from SSA to obtain or continue receiving disability
payments.
* Table 4 provides these attributes for each selected case that we
investigated.
Table 4: Attributes of Selected Cases of SSA Disability Beneficiaries
and Recipients Improperly Receiving Benefits While Working:
Case 1;
SSA sent overpayment notification letter: [Check];
Individual continued to receive disability benefits as of October
2009: [Empty];
Individual claimed to have notified SSA: [Check];
SSA records have indications that individual notified SSA: [Check];
SSA increased disability benefits based on reported wages: [Check];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Empty];
Individual likely committed fraud: [Empty].
Case 2;
SSA sent overpayment notification letter: [Empty];
Individual continued to receive disability benefits as of October
2009: [Empty];
Individual claimed to have notified SSA: [Check];
SSA records have indications that individual notified SSA: [Empty];
SSA increased disability benefits based on reported wages: [Check];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Check].
Case 3;
SSA sent overpayment notification letter: [Empty];
Individual continued to receive disability benefits as of October
2009: [Check];
Individual claimed to have notified SSA: [Empty];
SSA records have indications that individual notified SSA: [Empty];
SSA increased disability benefits based on reported wages: [Empty];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Check].
Case 4;
SSA sent overpayment notification letter: [Empty];
Individual continued to receive disability benefits as of October
2009: [Empty];
Individual claimed to have notified SSA: [Check];
SSA records have indications that individual notified SSA: [Empty];
SSA increased disability benefits based on reported wages: [Empty];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Empty].
Case 5;
SSA sent overpayment notification letter: [Empty];
Individual continued to receive disability benefits as of October
2009: [Check];
Individual claimed to have notified SSA: [Empty];
SSA records have indications that individual notified SSA: [Empty];
SSA increased disability benefits based on reported wages: [Check];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Check].
Case 6;
SSA sent overpayment notification letter: [Empty];
Individual continued to receive disability benefits as of October
2009: [Check];
Individual claimed to have notified SSA: [Empty];
SSA records have indications that individual notified SSA: [Empty];
SSA increased disability benefits based on reported wages: [Check];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Empty].
Case 7;
SSA sent overpayment notification letter: [Empty];
Individual continued to receive disability benefits as of October
2009: [Check];
Individual claimed to have notified SSA: [Empty];
SSA records have indications that individual notified SSA: [Empty];
SSA increased disability benefits based on reported wages: [Empty];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Check].
Case 8;
SSA sent overpayment notification letter: [Empty];
Individual continued to receive disability benefits as of October
2009: [Empty];
Individual claimed to have notified SSA: [Empty];
SSA records have indications that individual notified SSA: [Empty];
SSA increased disability benefits based on reported wages: [Check];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Empty].
Case 9;
SSA sent overpayment notification letter: [Empty];
Individual continued to receive disability benefits as of October
2009: [Empty];
Individual claimed to have notified SSA: [Empty];
SSA records have indications that individual notified SSA: [Empty];
SSA increased disability benefits based on reported wages: [Empty];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Check].
Case 10;
SSA sent overpayment notification letter: [Empty];
Individual continued to receive disability benefits as of October
2009: [Check];
Individual claimed to have notified SSA: [Check];
SSA records have indications that individual notified SSA: [Empty];
SSA increased disability benefits based on reported wages: [Empty];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Empty].
Case 11;
SSA sent overpayment notification letter: [Empty];
Individual continued to receive disability benefits as of October
2009: [Check];
Individual claimed to have notified SSA: [Check];
SSA records have indications that individual notified SSA: [Empty];
SSA increased disability benefits based on reported wages: [Empty];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Empty].
Case 12;
SSA sent overpayment notification letter: [Empty];
Individual continued to receive disability benefits as of October
2009: [Check];
Individual claimed to have notified SSA: [Check];
SSA records have indications that individual notified SSA: [Empty];
SSA increased disability benefits based on reported wages: [Check];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Empty].
Case 13;
SSA sent overpayment notification letter: [Check];
Individual continued to receive disability benefits as of October
2009: [Empty];
Individual claimed to have notified SSA: [Check];
SSA records have indications that individual notified SSA: [Check];
SSA increased disability benefits based on reported wages: [Check];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Empty].
Case 14;
SSA sent overpayment notification letter: [Check];
Individual continued to receive disability benefits as of October
2009: [Empty];
Individual claimed to have notified SSA: [Check];
SSA records have indications that individual notified SSA: [Empty];
SSA increased disability benefits based on reported wages: [Check];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Empty];
Individual likely committed fraud: [Empty].
Case 15;
SSA sent overpayment notification letter: [Check];
Individual continued to receive disability benefits as of October
2009: [Check];
Individual claimed to have notified SSA: [Check];
SSA records have indications that individual notified SSA: [Check];
SSA increased disability benefits based on reported wages: [Empty];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Empty].
Case 16;
SSA sent overpayment notification letter: [Empty];
Individual continued to receive disability benefits as of October
2009: [Empty];
Individual claimed to have notified SSA: [Check];
SSA records have indications that individual notified SSA: [Empty];
SSA increased disability benefits based on reported wages: [Check];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Empty].
Case 17;
SSA sent overpayment notification letter: [Empty];
Individual continued to receive disability benefits as of October
2009: [Check];
Individual claimed to have notified SSA: [Check];
SSA records have indications that individual notified SSA: [Check];
SSA increased disability benefits based on reported wages: [Empty];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Empty].
Case 18;
SSA sent overpayment notification letter: [Empty];
Individual continued to receive disability benefits as of October
2009: [Check];
Individual claimed to have notified SSA: [Check];
SSA records have indications that individual notified SSA: [Empty];
SSA increased disability benefits based on reported wages: [Check];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Empty].
Case 19;
SSA sent overpayment notification letter: [Check];
Individual continued to receive disability benefits as of October
2009: [Empty];
Individual claimed to have notified SSA: [Check];
SSA records have indications that individual notified SSA: [Empty];
SSA increased disability benefits based on reported wages: [Empty];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Empty].
Case 20;
SSA sent overpayment notification letter: [Check];
Individual continued to receive disability benefits as of October
2009: [Empty];
Individual claimed to have notified SSA: [Check];
SSA records have indications that individual notified SSA: [Empty];
SSA increased disability benefits based on reported wages: [Empty];
SSA sent $250 economic stimulus check to individual receiving
disability payments: [Check];
Individual likely committed fraud: [Empty].
Total;
SSA sent overpayment notification letter: 6;
Individual continued to receive disability benefits as of October
2009: 10;
Individual claimed to have notified SSA: 14;
SSA records have indications that individual notified SSA: 4;
SSA increased disability benefits based on reported wages: 10;
SSA sent $250 economic stimulus check to individual receiving
disability payments: 18;
Individual likely committed fraud: 5.
Source: GAO.
[End of table]
[End of section]
Appendix III: Debt Owed to SSA from Overpayment of DI and SSI Benefits
Is Mounting:
SSA's failure to promptly prevent improper disability payments for the
DI and SSI programs has, in part, contributed to overpayments in these
programs. The overpayment of DI and SSI benefits may come from
beneficiaries who had their benefits suspended or terminated following
a work CDR. Overpayments may also be caused by other types of events,
including receipt of workers compensation benefits, being in prison
while receiving benefits, and medical improvement to the point where
the individual no longer has disabilities. As shown in figure 3, in
fiscal year 2004 the total net amount owed to SSA for DI and SSI
overpayments was $7.6 billion.[Footnote 26] This debt has
significantly increased through fiscal year 2008, as individuals owed
over $10.7 billion in overpayments of DI and SSI benefits.[Footnote 27]
Figure 3: Total DI and SSI Overpayment Debt, 2004-2008:
[Refer to PDF for image: line graph]
Year: 2004;
Total DI and SSI Overpayment Debt: $7.6 billion.
Year: 2005;
Total DI and SSI Overpayment Debt: $8.5 billion.
Year: 2006;
Total DI and SSI Overpayment Debt: $9.3 billion.
Year: 2007;
Total DI and SSI Overpayment Debt: $9.9 billion.
Year: 2008;
Total DI and SSI Overpayment Debt: $10.7 billion.
Source: GAO analysis based on SSA data.
Note: The SSI portion of totals includes the overpayments to
nondisability (i.e., age-based) recipients.
[End of figure]
[End of section]
Appendix IV: Comments from the Social Security Administration:
Note: GAO comments supplementing those in the report text appear at
the end of this appendix.
Social Security:
The Commissioner:
Social Security Administration:
Baltimore, MD 21235-0001:
May 28, 2010:
Mr. Greg Kutz:
Managing Director:
Forensic Audits and Special Investigations:
441 G. Street. N.W.
Washington. D.C. 20548:
Dear Mr. Kutz:
Thank you for the opportunity to review and comment on the Government
Accountability Office (GAO) draft report, "Social Security
Administration: Cases of Federal Employees and Transportation Drivers
and Owners Who Fraudulently and/or Improperly Received SSA Disability
Payments" (GAO-10-444). Our comments on the report are enclosed.
If you have any questions, please contact me or have your staff
contact Candace Skurnik, Director, Audit Management and Liaison Staff,
at (410) 965-4636.
Sincerely,
Signed by:
Michael J. Astrue:
Enclosure:
cc: Matthew Valenta:
Philip Reiff:
[End of letter]
Comments On The Government Accountability Office (GAO) Draft Report,
"Social Security Administration (SSA): Cases Of Federal Employees And
Transportation Drivers And Owners Who Fraudulently And/or Improperly
Received SSA Disability Payments" (GAO-10-444):
General Comments:
Thank you for the opportunity to comment on the draft report Cases of
Federal Employees and Transportation Drivers and Owners Who
Fraudulently and/or Improperly Received SSA Disability Payments, and
for your efforts in collaborating with us over the last few weeks as
you worked to issue your findings. We believe that you provide a fair
representation for some of the issues. For others, though. you do not,
and we remain concerned that your overall message is misleading and in
some cases factually incorrect.
We clearly recognize the importance of reducing improper and
fraudulent payments: considering the size of our programs. we are
keenly aware of this need. In fact. "Curbing Improper Payments" is the
first objective under our 2008-2013 Strategic Plan Goal to "Preserve
the Public's Trust in Our Programs.' As further evidence of our
commitment, we are taking a number of proactive actions described in
our "Annual Report ” Executive Order 13520, Reducing Improper
Payments." We issued the report on May 18, 2010. and in it explain our
methods for identifying improper payments and analyzing their root
causes. and also our specific plans for reducing them in the future.
We are pleased that you acknowledge some of our efforts. For example.
we appreciate your citing our commitment to increase the number of
Supplemental Security Income (SSI) redeterminations we perform this
year. However, increasing the number of redeterminations is just one
of a number of approaches we are taking to reduce improper payments.
In your report, you describe some possible alternatives, such as
periodically matching the names of disability beneficiaries against
Federal payroll records to identify possible situations where we are
improperly paying people who are working. As we note in our comments.
our current enforcement process captures Federal payroll data, but we
will review the efficacy of matching these payroll records with our
records.
As we have noted, our methods are working. The report does not
acknowledge that prior to the report's issuance. we had already
detected overpayments for half of the 20 cases handpicked for this
review. Our existing processes identified these cases. and we had
already computed overpayment amounts. We would have identified the
remaining cases where IRS reported earnings for those beneficiaries
through subsequent enforcement activities. [See comment 1]
We are grateful you took the time to meet with us to gain a better
understanding of our program requirements; but we must note that you
continue to inappropriately apply the complete definition of
substantial gainful activity (SGA). Under the requirements of the
disability programs, individuals are not determined to be performing
work activity at the SGA level based on earnings levels alone. The SGA
regulatory definition requires that the work activity criteria also
include what the nature of the work is, how well the individual
performs the work, whether the work is done under special conditions,
whether the individual is self-employed, and what kind of time is
spent in work activity (20 C.F.R. 404.1573). We must consider all
these factors when determining SGA and when assessing whether a person
has been paid improperly. [See comment 2]
We are also concerned that you did not adequately consider our various
work incentives. While you mention them briefly in your narrative, you
do not seem to appreciate their importance in determining
beneficiaries' eligibility. Please see the attached fact sheet for
further information on work incentives.
As the report's title suggests. you devoted much of your effort to
examining activity related to transportation drivers and owners. Your
recommendations, though, do not address drivers and owners, and we
believe the title of your report may be an overstatement and raise
unwarranted concerns that there is widespread fraud in this area.
Accordingly. we suggest that you consider revising the title of the
report. [See comment 3]
The following provides our response to your two recommendations:
Recommendation 1:
Evaluate the feasibility (including consideration of any costs,
operational and system modifications) of incorporating the Automated
Earnings Reappraisal Operations (AERO) process to identify individuals
that have returned to work.
Comment:
We agree and will evaluate the feasibility of utilizing the AERO
process as you recommend.
Recommendation 2:
Evaluate the feasibility of periodically matching SSA disability
beneficiaries and recipients to federal payroll data. Such matches
would provide SSA With more timely data to help SSA systematically and
more effectively identify federal employees who are likely to incur
overpayments.
Comment:
We agree. As you discuss in the report, we currently conduct a
computer match of our beneficiary information with Internal Revenue
Service data for all wage earners. While we capture Federal payroll
data through that enforcement process. we will review the efficacy of
matching Federal payroll records with our records. We will then assess
whether such a data match might detect unreported earnings earlier,
trigger work continuing disability reviews (CDR) sooner, and result in
smaller overpayments.
Request: In the first sentence of the "Highlights" page, you state
that "there are indications that about 1,500 federal civilian
employees may have improperly received benefits." Please provide us
with the data, including beneficiaries' Social Security numbers, that
you used to support your conclusion. We will examine the information
in evaluating your recommendation and also assess whether these
beneficiaries have, or would have been, identified in our existing
computer match with the IRS. [See comment 4]
Page/Sentence Specific Comments :
Highlights page: "Why GAO Did This Study"; page 1, 1st sentence:
You refer to both the Social Security Disability Insurance (SSDI) and
SSI programs as "cash assistance" programs.
Comment: Replace the term "cash assistance" with "cash benefit." SSDI
is not a cash assistance program: it is a social insurance program to
which wage earners contribute and earn the right to disability
benefits for themselves and their dependents. [See comment 5]
Highlights page, "Why GAO Did This Study"; page 1, paragraph;
Comment: Similarly, replace references to "financial assistance" with
the term "cash benefit." [See comment 5]
Highlights page, "What GAO Found," 1st paragraph, last sentence reads:
"SSA currently does not perform a payroll or DOT records match to
identify individuals improperly receiving benefits."
Comment: This statement is not wholly accurate. As you acknowledge at
the bottom of page 6 and top of page 7, we conduct a match of
beneficiary data with IRS data for all wage earners. We do not,
however, match our data to the subset of Federal wage earners as you
did in your study. We suggest you replace the sentence with the
following: [See comment 6]
"While SSA conducts a match of its beneficiary file to IRS data for
all wage earners. it does not match its records to Federal payroll or
DOT data to potentially identify persons who may be improperly
receiving benefits."
Page 1, 1st paragraph, 1st sentence, 5th line:
Comment: Replace "disabled people" (semantics ” the term often conveys
a negative meaning) with the words, "persons with disabilities" and
use it throughout the report. [See comment 5]
Page 4, 1st full sentence reads:
"To illustrate actual cases of fraudulent payments and/or improper
payments from our macro analysis, we non-representatively selected 20
cases..."
Comment: In this sentence and throughout the report you say. -macro
analysis." This is not a commonly accepted statistical term. We
suggest you define its meaning, or alternatively use a different term
to describe the nature of your analysis. [See comment 5]
Page 5, "Background", 2nd sentence reads:
"DI replaces income for those with Social Security work records and
provides benefits related to their prior earnings levels."
Comment: DI does not "replace income. It provides cash benefits.
Please revise to read:
"DI provides cash benefits to disabled workers and their dependents
based on their prior earnings."
Page 6, 1st paragraph, 2nd full sentence reads:
"To be eligible for benefits, individuals with disabilities must have
a specified number of recent work credits under Social Security (which
is generally 10 years of work credits) at the onset of medical
impairment." [See comment 5]
Comment: For accuracy. change the parenthetical phrase to read:
"(specifically, working 5 out of the last 10 years or 20 quarters out
of 40 quarters)"
Page 6, 2ndd paragraph, 1st sentence reads:
"SSA conducts work issue continuing disability reviews (CDR) to
determine if beneficiaries are working above the SGA level." [See
comment 5]
Comment: Revise to read: "...working at or above the SGA level."
Note: there may be other references in the report that you need to
revise similarly.
Page 6, 2nd paragraph, 4th sentence reads:
"Once the trial work period is completed, beneficiaries are generally
ineligible for future DI benefits unless their earnings fall below the
SGA level." [See comment 5]
Comment: Revise to read:
"...for future DI benefits unless their earnings fall below the SGA
level during the 36-month extended period of eligibility (EPE)."
Page 7, "Supplemental Security Income," 1st sentence in part reads:
"...provides a minimum level of income to financially needy
individuals who are aged, blind. or considered eligible for benefits
because of physical impairments." [See comment 5]
Comment: Revise to read:
"...for benefits because of physical or mental impairments."
Page 8, 2nd full sentence reads:
"SSI generally reduces the monthly benefit $0.50 for every $1 of
monthly earnings after the first $85." [See comment 5]
Comment: Revise to read:
"...reduces the monthly benefit $1 for every $2 of monthly earnings
after the first $85."
Page 9, footnote 10 reads:
"Federal disability programs such as SSA's "Ticket to Work" encourage
certain disability beneficiaries to work and still receive all or a
portion of their disability benefits. In addition. from the
beneficiary's income, SSA may exclude certain out-of-pocket work
expenses (e.g.. costs of car modifications or attendant care) from the
calculation of the beneficiary's income. The beneficiary's salary may
also include compensation for sick leave, which SSA also excludes from
the calculation of the beneficiary's income. From our analysis of the
data, it is impossible to determine the extent to which this
population beyond our 20 cases was affected by these factors."
Comment: We believe this deserves more than footnote consideration.
Readers may not understand the importance of work incentives when
determining SGA or countable income and the time it takes to develop
this information, which may cause overpayments to continue for longer
periods of time. We recommend you insert the footnote as a new
paragraph after the first partial paragraph on page 6. [See comment 7]
Page 10, footnote 11 reads:
"The actual estimate of federal employees who may be improperly
receiving benefits was 1,486." [See comment 5]
Comment: Please reconcile "1,486 to the "1,487" number presented in
Table 1 on page 11.
Page 11, Table 1, use of the term, "joint:"
Comment: Please replace with the word "concurrent." [See comment 5]
Page 12, Commercial Drivers and Transportation Business Registrants
Receiving SSA Disability Benefits, first sentence reads:
"Our analysis of data from DOT on commercial drivers and from SSA on
disability beneficiaries found that about 600,000 individuals had been
issued commercial drivers licenses (CDL) and were receiving full
federal medical disability benefits."
Comment: Revise to read: [See comment 5]
"...issued commercial drivers licenses (CDL) and were receiving Social
Security disability benefits."
Page 15, 1st full sentence reads in part:
"As mentioned earlier, the 20 cases were primarily selected based on
our analysis of SSA electronic and paper files for the more egregious
overpayments..."
Comment: We believe "egregious" may be too strong a characterization.
Possibly consider, "larger." [See comment 5]
Page 17, bullet 3, 2nd sentence reads:
"Although SSA has the authority to charge interest and penalties, SSA
did not do so on these agreements."
Comment: The Social Security Act authorizes us to waive repayments or
to reach agreements with beneficiaries as to the monthly amount they
can afford to repay. The report does not establish that these cases
met the conditions for applying penalties or interest on the
overpayments. Accordingly, we recommend you delete this sentence. [See
comment 8]
Page 17, bullet 3, 3rd sentence reads:
"As a result, several individuals from our cases were placed in long-
term, interest-free repayment plans for improperly cashing disability
overpayments."
Comment: Please change the word "cashing" to "accepting." [See comment
5]
We also suggest you remove the term, "interest-free repayment" because
it misrepresents our procedures for handling overpayments and recovery
actions. In every case we must review an individual's income and
assets, and then consider those factors in determining whether or not
a demand for repayment will create undue hardship. We recommend that
you delete from the report any references to the term "interest." [See
comment 8]
Page 18, first full paragraph 2" sentence reads:
"SSA stated that they did not seek a legal determination as to whether
individuals that had their payments suspended because of employment
should receive these stimulus payments."
Comment: This sentence mischaracterizes the situation. While we did
not seek a formal opinion. we did consult with our Office of the
General Counsel (OGC) on issues concerning eligibility for economic
recovery payments. We then applied the law accordingly. The American
Recovery and Reinvestment Act of 2009 provides clear wording on
eligibility for the $250 payment, so a formal opinion was unnecessary.
As we stated in one of our meetings, our OGC was willing to discuss
this with you. but you declined the offer. [See comment 9]
Also, the report does not include information that we provided to GAO
investigators on the relationship between the $250 economic recovery
payment and the Making Work Pay tax credit. [See comment 10] According
to the IRS, "the Making Work Pay tax credit, normally a maximum of
$400 for working individuals and $800 for working married couples, is
reduced by the amount of any economic recovery payment ($250 per
eligible recipient of Social Security, Supplemental Security Income,
Railroad Retirement or Veteran's benefits) or Special Credit for
Certain Government Retirees ($250 per eligible federal or state
retiree)." The GAO report does not include this information. We
believe that this is a problem because the GAO report includes an
estimate of "$10.5 million in stimulus payments to approximately
42,000 individuals who were covered by the EPE," suggesting a sizeable
net impact of these economic recovery payments on the Federal budget.
We recommend including a description of the corresponding reduction in
the Making Work Pay tax credit for these beneficiaries. This will
provide the reader with a more accurate impression of the net impact
of the economic recovery payments on the Federal budget.
Page 23, Case 9 2nd bullet, 2nd sentence reads:
"The estimated overpayment was about $23.000."
Comment: Please correct the estimated overpayment to $19,000. [See
comment 5]
Page 24, Case 10, 2nd bullet, 2nd sentence reads:
"The estimated overpayment was about $45,000."
Comment: Please correct the estimated overpayment to $37,000. [See
comment 11]
Page 24, Case 10, 5th bullet reads:
"Beneficiary is under a repayment agreement with SSA for about $100
per month."
Comment: Delete the fifth bullet; there is no repayment agreement
because the beneficiary repaid the overpayment in full. [See comment 5]
Page 24, 2nd sentence reads:
"We are referring all 20 cases to the SSA Office of Inspector General
for further investigation and SSA management for collection action."
Comment: It appears you mingle two separate issues in this sentence:
fraud and overpayments. We assume that you mean you will refer only
some of the cases (those involving possible fraud) to our Inspector
General (IG), and you will refer all cases (those involving possible
overpayments) to SSA management. We suggest you revise the sentence
for clarification because it implies erroneously that all 20 cases
involve possible fraud, and you will refer them all to the IG. [See
comment 5]
Page 26, in the paragraph above Table 3, 4th sentence reads:
"We have referred all 20 cases to the SSA Office of Inspector General
for further investigation and to SSA management for collection action."
Comment: See comment immediately above. Also, to our knowledge, you
have referred only two cases to our OIG, and one to the U.S. Postal
Service IG. [See comment 5]
Page 29, Case 16, 2nd bullet, 2nd sentence reads:
"The estimated overpayment was about $25,000."
Comment: Please delete the estimated overpayment. There is no
overpayment, estimated or otherwise, on this record. [See comment 12]
Page 29, Case 16, 5th bullet, 2nd sentence reads:
"However, SSA made her eligible for payments again in August 2007."
Comment: Please delete this sentence and replace it with the following:
"The beneficiary was eligible for payments again in August 2007,
because her earnings were below SGA. Benefit payments were stopped in
March 2009." [See comment 12]
Page 32, 1st paragraph, 2nd sentence reads:
"For all 20 cases, SSA did not promptly suspend the payments for the
Social Security disability benefits."
Comment: Please delete this sentence as it is misleading. We cannot
"promptly" suspend payments because someone is working. A suspension
is not always appropriate. Determinations of SGA require evaluation of
work and earnings, and we must provide due process before suspending
anyone's benefits. [See comment 5]
Pages 35 and 36:
Comment: On page 35 under "Debt Owed to SSA from Overpayment of DI and
SSI Benefits are Mounting," you discuss "substantial increases in the
amount of SSA reported debt owed by individuals." In Figure 3. page
36, you provide a graphic representation of that debt for the years
2004 through 2008. It is important to note that your data represents
total overpayment debt. By including this information, you are
implying that the overpayment activity you describe in your report
somehow contributes significantly to the overall debt numbers. This
implication is inaccurate. We believe you should remove pages 35 and
36 from the report or at the very least provide clarifying language.
[See comment 5]
Substantial Gainful Activity:
Fact Sheet:
Definition of Disability:
The inability to engage in any substantial gainful activity (SGA)
because of a medically-determinable physical or mental impairment(s)
that:
* is expected to result in death, or;
* has lasted or is expected to last for a continuous period of not
less than 12 months.
SGA:
SGA means the performance of significant physical and/or mental
activities in work for pay or profit, or in work of a type generally
performed for pay or profit, regardless of the legality of the work.
* Work may be "substantial" even if performed on a part-time basis, or
if the person does less, is paid less, or has less responsibility than
in previous work.
* Work is "gainful" if it is the kind of work usually done for pay,
whether in cash or in kind, or for profit, whether or not a profit is
realized.
SGA is used as a factor to determine initial eligibility for Social
Security Disability Insurance (SSDI) and to decide if disability
continues for SSDI after completion of the trial work period (TWP).
SGA is only used as a factor to determine initial eligibility for
Supplemental Security Income (SSI) disability benefits. We do not use
SGA for initial eligibility to SSI based on blindness. After initial
eligibility, SGA is not considered for SSI benefits.
Evaluation of SGA:
Work is counted when earned for SSDI and when paid for SSI. After
monthly gross earnings are determined, applicable work incentives are
applied. We are only concerned with income that represents the actual
value of the work performed as a result of the person's own
productivity. We then use the SGA earnings guidelines to evaluate the
countable earnings.
Generally, countable earnings averaging over $1,000 a month (in 2010)
demonstrate the ability to perform SGA. For blind persons, countable
earnings averaging over $1,640 a month (in 2010) generally demonstrate
SGA for SSDI.
Benefit Eligibility Based on SGA:
If an SSDI blind or disabled claimant's work is over SGA. the
definition of disability is not met and benefits are denied. The same
is true for an SSI disabled claimant.
When an SSDI beneficiary returns to work, he or she will receive full,
unreduced benefits for at least 9 work months. This is the TWP. After
the TWP, we will evaluate earnings for SGA to determine if disability
continues. This is called a work continuing disability review (CDR).
When an SSI beneficiary returns to work. we are not concerned with
SGA. We count income and earnings when received (after allowable
deductions) to determine the monthly payment amount. The countable
income is subtracted from the Federal Benefit Rate ($674 in 2010) to
arrive at the payment. An SSI beneficiary may go in and out of pay
based on countable income. An SSI beneficiary whose payment is reduced
to zero because of earnings will retain eligibility to SSI and
Medicaid, provided disability continues and earnings are below a State
threshold amount. State thresholds vary between a low of $23,981 in
Alabama to a high of $54,815 in Connecticut.
Work Incentives:
Some of the work incentives that may be applied to reduce countable
earnings for SSDI are:
* TWP: Allows beneficiary to test ability to work without affecting
benefits; the TWP is completed when 9 months (with earnings over $720
in 2010) are completed within a rolling 60-month period.
* Impairment related work expenses: Out-of-pocket costs for items and
services related to the disability that are needed in order to work.
* Subsidies and special conditions: Supports received on the job which
results in the person receiving more pay than the actual value of the
services performed.
* Unsuccessful work attempts: We disregard earnings from work attempts
of 6 months or less that were stopped due to the impairment.
Some of the work incentives that reduce SSI countable earnings are:
* Impairment related work expenses.
* Blind work expenses: For SSI beneficiaries receiving benefits based
on blindness, we exclude any earnings that are used to meet expenses
needed to earn that income; they do not need to be related to
blindness.
* Student earned income exclusion: We do not count up to $1,640 (in
2010) of monthly earnings (up to a yearly maximum of $6,600 in 2010)
of a student under age 22.
* Plan to achieve self-support: We do not count any earnings an SSI
beneficiary sets aside toward an approved plan.
Work CDRs:
After an SSDI beneficiary completes the TWP and continues to work, we
will conduct a work CDR to determine if disability continues. We do
not perform work CDRs for SSI beneficiaries.
We may receive a report that an SSDI beneficiary has worked directly
from the beneficiary. from a third party, or from an earnings alert
(such as the Internal Revenue Service match). We first attempt to
obtain verification of monthly wages, such as pay stubs, directly from
the beneficiary. When the beneficiary cannot or will not provide proof
of wages, we must request it from the employer.
If the TWP has been completed, we must determine if work after the TWP
represents SGA. Before determining that earnings are SGA, we must
determine if any work incentives apply. (Work incentives do not apply
during the TWP.) This may require additional verification, such as
receipts for impairment related expenses from the beneficiary or
determining the value of a subsidy provided by an employer.
Once we complete our development. we make an SGA determination. In
cases where we cannot obtain any verification from the beneficiary or
employer, we will make an SGA determination based on all available
evidence.
If we find that work is over SGA, then disability ceases. We send a
due process notice to the beneficiary, who has 10 days to present any
other proof before we stop benefits. The beneficiary may also appeal
our determination and ask for payment continuation while we review our
decision. If there is no appeal, the beneficiary will be due benefits
for the month of cessation and a grace period during the 2 following
months.
Overpayments are unavoidable because even if the beneficiary appears
to be working over SGA, we cannot stop benefits until we have
completed our development, made our determination, and provided due
process. The beneficiary, however, may ask us at any time to suspend
benefits if he or she wishes to avoid or reduce an overpayment due to
work. We would continue our development while benefits are suspended.
The Extended Period of Eligibility (EPE):
An SSDI beneficiary enters the EPE after completion of the TWP. During
the first 36 months after the TWP, if a beneficiary, whom we have
determined to be ceased, stops working and earning over the SGA
earnings limit, his or her benefits will be reinstated (without a new
application). After these 36 months. if a beneficiary is receiving
benefits because work is under SGA, benefits will continue until the
next month SGA work is performed. Benefits are terminated with the
first month of SGA after the 36-month period. Again, we cannot
terminate the benefit until we have determined that the work is over
SGA and provided due process.
The following are GAO's comments on the Social Security
Administration's letter dated May 28, 2010.
GAO Comments:
1. In the report, we identify those cases where SSA has sent an
overpayment notification letter to the individual. However, we do not
believe that identifying fraudulent or improper payments after dollars
have been disbursed is an effective internal control. Our work across
the government has shown that once fraudulent or improper payments are
made, the government is likely to only recover pennies on the dollar.
Preventive controls are the most efficient and effective.
2. In the report, we state that to adequately assess an individual's
work status, a detailed evaluation of all the facts and circumstances
should be conducted. This evaluation would include contacting the
beneficiary and the beneficiary's employer, obtaining corroborating
evidence such as payroll data and other financial records, and
evaluating the beneficiary's daily activities. Based on this
evaluation, a determination can be made on whether the individual is
entitled to continue to receive SSA disability payments or whether
such payments should be suspended. As such, our analysis provides an
indicator of potentially improper or fraudulent activity related to
federal employees, commercial drivers, and owners of commercial
vehicle companies receiving SSA disability payments.
3. Our report described two cases of transportation drivers and owners
who fraudulently and/or improperly received SSA disability payments.
We do not believe that a change to the title is necessary.
4. We believe that SSA should perform the match with more current
federal payroll records to determine the efficacy of matching federal
salary payment records with SSA disability files of DI beneficiaries
and SSI recipients.
5. We revised the report to address SSA's specific comment.
6. IRS provides summary earnings data for a calendar year. We have
previously reported that the IRS earnings data used by SSA in its
enforcement operations are typically 12 to 18 months old when SSA
first receives them, thus making some overpayments inevitable. The
federal payroll data provide detailed earnings information for each
pay period (e.g., all 26 pay periods for a fiscal year). We believe
that these data are more useful in the determination of whether
continuing disability reviews and redeterminations should be conducted
and could be more current.
7. We believe the footnote is appropriate for this report.
8. As we stated in the report, SSA has the authority to charge
interest and penalties, but SSA did not do so on any of its agreements
with beneficiaries in our case studies.
9. The American Recovery and Reinvestment Act of 2009 states that
these stimulus benefit payments should be provided to individuals who
are entitled to DI benefit payments or are eligible for SSI cash
benefits. SSA did not seek a formal legal determination as to whether
individuals who had their payments suspended because of employment--
and were thus not receiving DI or SSI payments during November and
December of 2008 or January of 2009--should receive these stimulus
payments. We continue to believe that a question exists as to whether
these payments were proper and believe that SSA should have at least
sought a legal opinion before making the payments.
10. IRS may well collect some of these stimulus benefits payments
through a reduction of the "Making Work Pay" tax credit. We simply
stated the magnitude of the stimulus payments made to those
individuals covered under the extended period of eligibility. However,
we believe that relying on the IRS offset is not an effective internal
control activity.
11. Our estimated overpayment amount was based on our review of
detailed payroll records and discussion with the SSA beneficiary. We
believe that our estimated overpayment is accurate.
12. Our estimated overpayment amount was based on our review of
detailed payroll records and discussion with the SSA beneficiary.
Detailed payroll records showed that the beneficiary's earnings were
never below the substantial gainful activity threshold. As such, our
estimated overpayment is about $25,000.
[End of section]
Footnotes:
[1] To be eligible for DI benefits, individuals with disabilities must
have a specified number of recent work credits under Social Security
at the onset of medical impairment. Individuals may also be able to
qualify based on the work record of a deceased spouse or of a parent
who is deceased, retired, or eligible for disability benefits.
[2] The approximately 9 million DI beneficiaries include about 7
million eligible workers and about 2 million dependent spouses and
children.
[3] The 7.5 million SSI recipients include 6.3 million recipients who
are either blind or medically impaired and 1.2 million aged recipients.
[4] SGA is defined as work activity that involves significant physical
or mental activities performed for pay or profit. SSA has established
earnings guidelines as a basis for determining whether an individual
is engaged in SGA.
[5] This threshold changes every year depending on changes in the wage
index. For fiscal years 2007, 2008, and 2009 the earnings threshold
for SGA was $900, $940, and $980, respectively. A higher SGA threshold
applies to blind beneficiaries.
[6] The trial work period is one of the provisions in the DI program
intended to encourage beneficiaries to resume employment. Once the
trial work period is completed, beneficiaries are generally ineligible
for future DI benefits unless their earnings fall below the SGA level.
[7] Individuals who were eligible for DI or SSI benefits at any time
during the months of November 2008, December 2008, or January 2009
were eligible for the onetime payment. To receive payment, a
beneficiary's address must have been in one of the 50 states, the
District of Columbia, Puerto Rico, Guam, the U.S. Virgin Islands,
American Samoa, or the Northern Mariana Islands.
[8] The Department of the Treasury is the central disbursing agency
for most federal agency payroll centers. For example, federal salary
payments that are processed by the Department of Agriculture's
National Finance Center are paid through the Department of the
Treasury. The U.S. Postal Service processes payments for postal
employees. DFAS processes payments for Department of Defense employees
and employees of certain other federal agencies.
[9] The 12 selected states were California, Florida, Illinois,
Kentucky, Maryland, Michigan, Minnesota, Montana, Tennessee, Texas,
Virginia, and Wisconsin. The 12 states were selected primarily based
on the size of the licensed commercial driver population. These 12
selected states represented about 42 percent of all commercial
driver's licenses contained in CDLIS.
[10] Federal disability programs, such as SSA's "Ticket to Work,"
encourage certain disability beneficiaries to work and still receive
all or a portion of their disability benefits. In addition, from the
beneficiary's income, SSA may exclude certain out-of-pocket work
expenses (e.g., costs of car modifications or attendant care) from the
calculation of the beneficiary's income. The beneficiary's salary may
also include compensation for sick leave, which SSA also excludes from
the calculation of the beneficiary's income. From our analysis of the
data, it is impossible to determine the extent to which this
population beyond our 20 cases was affected by these factors.
[11] The actual estimate of federal employees who may be improperly
receiving benefits was 1,487.
[12] After the 9-month trial work period, SSA beneficiaries are
covered under an extended period of eligibility. This is a 36-month
period in which SSA does not pay any benefit amounts if the
beneficiary has earnings above the SSA earnings threshold for the DI
program. If earnings are under SGA, the full benefit is paid.
[13] Although any monthly earnings greater than the maximum SSI
earnings threshold are technically improper, to be conservative, we
only considered the receipt of benefits by those employees who had
over 2 months of monthly earnings greater than the maximum SSI
threshold to be likely fraudulent or improper for our analysis.
[14] The maximum SSI monthly benefit for eligible individuals for 2009
was $674. SSI reduces the monthly benefit $1 for every $2 of monthly
earnings after the first $85. As such, the maximum SSI earnings
threshold for calendar year 2009 is $1,433.
[15] This estimate was based on the sum of the December 2008
disability payments for the approximately 1,500 federal employees
identified.
[16] Our estimate of federal employees with potential improper payment
indicators is likely underestimated. It does not include salary
payments that these individuals may have received outside of the
federal government. Also, we had only the net pay amounts for federal
employees disbursed by Department of the Treasury, not gross pay. For
these employees the salary we used was reduced for deductions such as
health insurance, income taxes, and other withholdings.
[17] The DOT data do not contain identifiers to indicate whether a
license is currently active. It is an index system designed to ensure
that drivers do not obtain CDLs from multiple states. As a result,
DOT's database includes drivers with valid, suspended, revoked, or
lapsed licenses.
[18] The states were chosen primarily based on size and availability
of data.
[19] Each business is a registered motor carrier in DOT's Motor
Carrier Management Information System with an active DOT number. For
private motor carriers, there is no cost associated with maintaining
an active listing.
[20] Black's Law Dictionary, 9th Edition (2009).
[21] AERO is a computer operation that reexamines an individual's
earnings record to determine whether the beneficiary is due a
recomputation to include earnings not previously considered in the
monthly disability amount. If an increase is due, AERO processes a
benefit change and notifies the beneficiary. If no increase is due,
AERO does not send a notice. AERO is run twice for each earnings year,
usually in late October and late March.
[22] For DI, beneficiaries can continue their Medicare coverage for up
to 93 months after the end of the trial work period. For SSI, Medicaid
coverage can continue as long as the earnings do not exceed the
Medicaid income thresholds.
[23] Pub. L. No. 111-5 § 2201 (Feb. 17, 2009).
[24] According to SSA officials, the "Making Work Pay" tax credit is
reduced by the amount of any stimulus payments. The extent to which
these individuals reduced their "Making Work Pay" tax credit for these
stimulus benefit payments is not known.
[25] For 11 other cases, we believe there may have been fraud
committed by these individuals to continue receiving disability
payments. For the most part, these are situations where the
individuals claimed to have reported their employment to SSA but SSA
had no record of this contact in its files.
[26] Total overpayment debt comprises existing debt carried forward
from prior years and newly detected overpayments, net of collections,
waivers, and write-offs in each fiscal year.
[27] For 2008, the overpayment debt was $5 billion for DI and $5.7
billion for SSI. Because of SSA system limitations, SSA was not able
to separate overpayments to age-based SSI recipients from those to SSI
disability recipients. However, most of the SSI recipients receive
benefits based on disability or blindness. Specifically, as of
December 2008 84 percent of SSI recipients were eligible because they
were disabled or blind; the remaining 16 percent of SSI recipients
were eligible based on age.
[End of section]
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