Last month Social Security released the 2016 Fiscal Year Financial Report, which included the annual audited financial statements from the agency and a section of the report detailed improper payments Social Security has issued. These would be types of payments that are mistakenly given to people who are not entitled to receive payments because they are disqualified for various reasons.
Social Security indicated the different scenarios that result in improper payments being issued including:
- Social Security’s mistake in computing payments;
- Social Security’s failure to obtain or act on available information affecting payment;
- A beneficiary’s failure to report an event; or
- A beneficiary’s incorrect report.
As you can see some of the blame for improper payments falls on Social Security, but there are also plenty of cases where a beneficiary neglects to provide Social Security with prudent information that would result in less overpayments being issued. Regardless, it is important to see how wasteful Social Security is in issuing improper payments. Critics of Social Security programs would argue that Social Security is very wasteful, but the truth is the agency seldom issues improper payments.
Over the last five years Social Security has issued $6.8 billion in overpayments within the Old Age, Survivor and Disability Insurance (OASDI) programs. That sounds like a huge number, and it is, but considering the agency paid out approximately $3.4 trillion over this five-year period, $6.8 billion is a small amount. Social Security issues improper payments 0.20 percent of the time.
Many Social Security critics target Social Security’s Disability Insurance program indicating there is a lot of fraud and abuse, but the truth is there is also less than 1 percent of improper payments issued in this program. Improper payments were issued 0.99 percent of the time. To take a closer look at Social Security’s financial report click here.
