An individual is eligible to receive DI benefits if he or  she has a medically determinable physical or mental impairment that (1)  has lasted (or is expected to last) at least 1 year or is expected to result in  death and (2) prevents the individual from engaging in SGA. SGA is  defined as work activity that involves significant physical or mental  activities performed for pay or profit. The amount of earnings that generally  demonstrates SGA can vary from year to year. As directed by  federal law, SSA must reduce DI benefits for individuals receiving certain  other government disability benefits, such as worker’s compensation. Concurrent DI and UI Payments Resulted in Hundreds of Millions of Dollars in Overlapping Benefit Payments

In fiscal year 2010, 117,000 individuals received concurrent cash benefit  payments of more than $850 million. As shown in figure 2, these  individuals represented less than 1 percent of the total beneficiaries of  both programs. However, estimated overlapping cash benefits paid to  these individuals totaled over $281 million from the DI program and more  than $575 million from the UI program. As mentioned, SSA’s definition of a disability  involves work that does not rise to the level of SGA. For 2010, a non-blind  person who is earning more than a $1,000 a month is ordinarily  considered to be engaging in SGA. In contrast, states’ determination of  “able and available for work” criteria for UI benefits may include  performing work that does not rise to the level of SGA. As a result, some  individuals may have a disability under federal law but still be able and  available for work under state law, thus eligible to receive DI and UI  concurrently. Because  these overlapping payments may be allowed under both programs’  eligibility requirements, and no federal law authorizes an automatic  reduction or elimination of benefits if a recipient receives both payments,  neither SSA nor DOL have any processes to identify these overlapping  payments. While the DI and UI programs generally serve separate populations and  provide separate services—thus not meeting our definition for overlapping  programs—the concurrent cash benefit payments made to individuals  eligible for both programs are an overlapping service for the replacement  of their lost earnings. Although current program rules allow overlapping benefits under certain  circumstances, concurrent receipt of DI and UI benefits can also be an  indicator of improper payments. earnings may be related to work that makes this individual ineligible for UI  benefits. Six of the individuals we selected for further investigation received  overlapping DI and UI benefits for 18 months or more. However, both trust funds face serious fiscal  sustainability challenges, prompting the need to examine opportunities for  potential cost savings. Reducing or eliminating this overlap and  potential improper payments could offer substantial savings, though  actual savings are difficult to estimate because the potential costs of  establishing mechanisms to do so are not readily available. Recommendations for Executive Action

We recommend that the Secretary of Labor work with the Commissioner  of SSA to (1) evaluate the circumstances under which individuals are  receiving overlapping DI and UI payments, taking appropriate action, as  necessary, for any payments determined to be improper, and (2) assess  whether cost savings or other benefits might be achieved by reducing or  eliminating overlapping DI and UI cash benefit payments being made  within the existing laws and regulations, seeking congressional authority  to do so as appropriate. DOL and SSA agreed with our recommendation that  DOL work with SSA to evaluate overlapping DI and UI benefits, taking  appropriate action for any payments determined to be improper, and  assessing whether cost savings or other benefits might be achieved by  reducing or eliminating overlapping DI and UI cash benefit payments.
Why GAO Did This Study

The DI and UI trust funds face serious fiscal sustainability challenges. In addition to other services, both programs provide cash benefits to their targeted populations to replace lost earnings. DI is available to workers who are unable to engage in SGA because of physical or mental impairments expected to last at least 12 months or result in death. SGA is defined as work activity that involves significant physical or mental activities performed for pay or profit. UI provides temporary cash benefits to eligible workers who are able to work but remain involuntarily unemployed.
GAO was asked to determine the extent to which individuals received DI and UI benefits concurrently. To do so, GAO matched unemployment files with SSA disability files for fiscal year 2010. GAO also reviewed DI and UI case files for a nongeneralizable selection of 8 individuals  4 from the top 50 recipients of concurrent DI and UI benefits in fiscal year 2010, and 4 who received UI benefits based on wages from multiple states. These examples cannot be generalized beyond those presented.

What GAO Found

In fiscal year 2010, 117,000 individuals received concurrent cash benefit payments from the Disability Insurance (DI) and Unemployment Insurance (UI) programs of more than $850 million, which is allowable in certain circumstances under current program authority. While these individuals represented less than 1 percent of the total beneficiaries of both programs, the cash benefits they received totaled over $281 million from DI and more than $575 million from UI. One individual GAO selected for further investigation received over $62,000 in overlapping benefits in a year. Based on GAO inquiries, state UI officials are reviewing the persons UI eligibility because of earnings that may be related to work that makes the person ineligible for UI benefits.
Under certain circumstances, individuals may be eligible for concurrent cash benefit payments due to differences in DI and UI eligibility requirements. Specifically, the Social Security Administrations (SSA) definition of a disability involves work that does not rise to the level of substantial gainful activity (SGA). In 2010, a monthly income of $1,000 or more for a non-blind beneficiary generally demonstrated SGA. In contrast, the Department of Labor allows states determination of able and available for work eligibility criteria for UI benefits to include work that does not rise to the level of SGA. Therefore, some individuals may have a disability under federal law but still be eligible for UI under state law because they are able and available for work that does not rise to the level of SGA. Although DI and UI generally provide separate services to separate populationsand thus are not overlapping programsthe concurrent cash benefit payments for individuals eligible for both programs are an overlapping benefit when both replace lost earnings. While SSA must reduce DI benefits for individuals receiving certain other government disability benefits, such as workers compensation, no federal law authorizes an automatic reduction or elimination of overlapping DI and UI benefits. As a result, neither SSA nor DOL has any processes to identify these overlapping payments. Reducing or eliminating overlapping or improper payments could offer substantial savings, though actual savings are difficult to estimate because the potential costs of establishing mechanisms to do so are not readily available.

What GAO Recommends

DOL should work with SSA to (1) evaluate overlapping DI and UI cash benefit payments, taking appropriate action for any improper payments, and (2) assess whether cost savings or other benefits might be achieved by reducing or eliminating overlapping DI and UI cash benefit payments being made within the existing laws and regulations, seeking congressional authority to do so as appropriate. DOL and SSA agreed with the recommendations.