OIG Auditors Find SSA Underpaid Widow(er)s by Estimated $224 Million

Beyond the Numbers

Tuesday, May 3, 2016
Posted by: 
The Communications Division

In our audits, we frequently assess SSA’s “payment accuracy,” which means looking at both overpayments and underpayments to beneficiaries and helping SSA find ways to limit payment errors of either kind.

Underpayments, or funds that SSA should have paid but did not, are just as important to us as overpayments, which is when SSA pays too much. If you have earned a benefit or you meet the criteria for a payment, you should receive it. We work to confirm SSA has controls in place to make sure it provides accurate and timely payments to as many people as possible.

In a recent report, our auditors found that certain widows and widowers of Social Security beneficiaries may be eligible for—but are not receiving—higher benefit payments from SSA.

In the report, Underpayments Payable to Widow(er)s Eligible for a Higher Monthly Benefit Amount, we estimated that SSA underpaid $224 million to about 25,000 widows and widowers.  

Our auditors examined an alternate way that SSA can calculate benefits for widows and widowers, described by SSA as Widow’s Indexing PIA (primary insurance amount) or, as it’s called at SSA, WINDEX.

The WINDEX calculation allows widows and widowers to receive the higher benefit amount determined by using

  • either the year of the deceased spouse’s date of death
  • or the year that the deceased spouse would have reached 62 years of age, whichever year is later.

Usually, SSA’s automated system applies the WINDEX calculation. However, there are instances when claims processing limitations and exclusions apply, and for these claims, SSA personnel must make some calculations manually. When that happens, the potential exists for someone to overlook the need to apply the calculation, and not realize the person is due a larger benefit amount.

In our review of a sample of widow(er)s that were potential WINDEX candidates, we found many who were eligible for a higher benefit, but SSA did not apply the WINDEX benefit amount, even though it was supposed to.  Here’s one case we found:

“In March 1988, a husband died at age 47, and his widow applied for benefits in May 2010.  When SSA manually processed the widow’s claim, the SSA employee used 1988 (the year the wage earner died) to determine the payment amount, instead of using 2002, the year the wage earner attained age 62.   Therefore, beginning in May 2010, SSA determined the widow’s monthly benefit amount as $1,740, and not the WINDEX amount of $2,094.  As a result, the $354 difference meant that SSA underpaid the widow $23,441 from May 2010 to December 2015.”

We recommended that SSA improve its controls to identify potential WINDEX claims, and to update individual payment records to reflect when a WINDEX amount is in effect. SSA should also consider developing a system alert to detect when WINDEX applies.

“Every audit we do is significant,” said James Klein, director of the OIG's San Francisco Audit Division.  “We constantly search for ways to make sure that each beneficiary is getting the correct payment at the right time.  Our review shined a light on this process and as a result many widows and widowers will receive their correct—higher—benefit amount.”    

See the full report, including our recommendations to SSA and the Agency’s response, here.