A report released in February of 2018, by the Office of the Inspector General for the Social Security Administration, showed that the agency underpaid widows and widowers by more than $131 million because these beneficiaries were not informed that they would receive a higher benefit amount, if they delayed receiving retirement benefits until age 70.
Basically, it would’ve been beneficial for these beneficiaries to collect widow and widower benefits until age 70, when they could have opted to receive retirement benefits at a higher rate. The OIG indicated that Social Security, in many instances, neglected to inform these beneficiaries of the advantages of delaying retirement benefits until age 70.
“SSA employees must explain the advantages and disadvantages of filing an application so claimants can make an informed filing decision. SSA employees must discuss and document any unfavorable filing decisions, such as filing an application for retirement benefits when it would be advantageous to delay the application. If a claimant applies for benefits even though it is not in his/her best interest, SSA employees must document the facts and decision in its automated system,” the report said.
The OIG’s report randomly sampled the cases of 50 beneficiaries and determined that 82 percent were eligible for higher monthly benefits if they had delayed receiving retirement benefits until age 70.
OIG Recommendations
To rectify the situation, the OIG made a list of recommendations that Social Security agreed with and these include:
- Taking action on the cases identified where beneficiaries were underpaid and determine whether Social Security should review the more than 13,000 other similar types of cases;
- Remind Social Security employees to discuss with widow and widower claimants, the effect of delaying their applications for retirement benefits and document the facts and decisions in accordance with SSA policy;
- Determine whether Social Security should develop additional controls to ensure it informs widows and widowers of their option to delay their application for retirement benefits.