Audit Highlight: Improper Payments to Deceased Beneficiaries

Beyond the Numbers

Date: 
Tuesday, February 5, 2019
Posted by: 
The Communications Division

Improving controls to ensure SSA takes timely and proper actions to resolve death information on the Numident for suspended beneficiaries is vital to preventing improper payments. The Numident contains all Social Security numbers since they were first issued in 1936.

When SSA receives a death report for a beneficiary, the agency should start action to cease benefits, record the date of death on the Numident and payment records, and begin recovery for any payments issued after death. If the death report is received from a first party, such as a relative or State Bureau of Vital Statistics, benefits should be cut off without verification. SSA must verify death reports from all other sources before cutting off benefits.

Our auditors previously reviewed SSA controls in this area. In a 2011 audit, we found that SSA needed to improve controls for resolving death information on the Numident for suspended beneficiaries. It was estimated that 4,699 beneficiaries remained in suspended pay status despite death information on the Numident. Of those, it was estimated that SSA improperly paid 2,976 deceased beneficiaries nearly $23.8 million.

Our auditors continued this work in a recent report. They again found SSA needs to improve controls to make sure the agency takes timely and proper actions to resolve death information on the Numident for suspended beneficiaries.

We estimated 1,907 beneficiaries remained in suspended payment status despite the death information on the Numident. Of these, we estimated SSA improperly paid $6.6 million to 988 deceased beneficiaries. Generally, this happened because SSA systems did not always create alerts for suspended beneficiaries with death information on the Numident or include all alerts in its Death Alert Tracking System, which contains a list of death alerts employees must resolve.

SSA did not properly resolve benefit suspensions for 56 percent of the 100 beneficiaries, as illustrated in the graph below.

Suspended Beneficiaries

SSA received the beneficiaries’ death reports and recorded the deaths on the Numident. However, SSA did not use the information to terminate benefits. Of the 56 beneficiaries in suspense, 20 received payments after death, and nine had withheld benefits that were payable to their survivors or legal representatives of their estate. All of the 56 cases were referred to the SSA for appropriate action.

Beneficiaries Who Received Payments After Death

In addition, we found that SSA issued payments totaling $176,556 to 20 beneficiaries after their month of death that were not returned or recovered. Benefits under the Old-Age, Survivors, and Disability Insurance (OASDI) program are not payable for the month of the beneficiary’s death or later. After a death report is received, SSA should terminate the decedent’s benefits and start recovery for any payments issued for the month or later. Not doing so may result in improper payments to deceased beneficiaries and/or their survivors.

Beneficiaries Who Had Withheld Benefits Payable

Further, we found that SSA suspended payments of nine beneficiaries before their month of death, and $17,269 was payable to their survivors or the estate’s legal representative. When the agency finds that it underpaid a deceased beneficiary, employees must determine the proper recipient of the underpayment and pay them the underpayments.

To improve its controls to ensure it takes timely and proper actions to resolve death information on the Numident for suspended beneficiaries, SSA agreed with these OIG recommendations:

  • Evaluate the results of its corrective actions for the 56 beneficiaries in our sample and determine whether it should take corrective action for the remaining population of 3,406 suspended beneficiaries who have death information on the Numident.
  • Develop controls for suspended beneficiaries with death information on the Numident to ensure they are resolved in a timely manner.

For more information, see the full audit report, Beneficiaries Whose Payments Have Been Suspended and Who Have Death Information on the Numident.