SSA Authorized to Use Payroll Data to Improve Payment Accuracy

Beyond the Numbers

Date: 
Thursday, January 26, 2017
Posted by: 
The Communications Division

The OIG has for many years recommended that SSA use electronic data, if available, to help improve program integrity and efficiency. Now, thanks to the Bipartisan Budget Act of 2015 (BBA), SSA has the authority to access real-time electronic payroll information to help reduce improper payments and improve program administration.

In previous testimony before Congress, we have recommended that SSA use electronic data directly from relevant sources to determine benefit eligibility and proper payment amounts, as opposed to relying on beneficiaries to self-report information, potentially to the beneficiaries’ disadvantage.

Section 824 of the BBA authorizes SSA to enter into data agreements with private payroll data providers to obtain current wage information, to improve benefit-program administration. Section 824 went into effect in November 2016; one year after the President signed the BBA into law.

In the past, gathering payroll information meant SSA field office employees had to obtain and analyze mounds of paperwork with aging data, or rely on the beneficiary to report the data timely. Payroll data matching means a reduced workload for the field office, thereby leading to more efficient program operations, which helps prevent improper payments. For beneficiaries, the electronic payment information reduces their burden to self-report wages to SSA.

Using Electronic Data

Under the new provision, SSA may require persons applying for or eligible for Social Security Disability Insurance or Supplemental Security Income (SSI) to permit SSA to access their payroll records. Once SSA has permission, the agency will use the data to determine individual eligibility and correct payment amounts.

Persons providing permission will have protection from certain sanctions and penalties. For instance, SSA will not hold them responsible for inaccurate information received from employers, or, in SSI cases, if a person changes jobs. However, if a person refuses to give SSA permission to access his or her wage information, then this protection does not apply.  

Section 824 also states that SSA must not only identify procedures for using payroll data, but it also must include procedures for notifying  individuals when they become subject to reduced wage-reporting requirements and when the requirements no longer apply.

Although this is a significant tool for SSA to use to curb improper payments, OIG continues to recommend that SSA pursue other electronic data to assist in other areas of program administration. In one report, our auditors estimated that SSA overpaid more than $226 million due to SSI recipients’ travel activity and SSA not having accurate, timely electronic banking information. Even though SSA requires reporting changes such as living arrangements, residency and international travel, some people do not report this information to SSA because they suspect it could lead to payment reduction or SSI ineligibility.     

Next Steps

Before implementing Section 824, SSA has several other requirements to meet. Prior to entering into a data exchange, SSA has to publish a notice in the Federal Register.  Additionally, SSA must enter into contract negotiations with payroll providers, update its automated systems, and develop training guidelines and procedures for agency employees.

With these actions underway, SSA is looking toward the end of 2017 to implement the new electronic wage-gathering provision.