We previously found that more than  half of all DI overpayments are paid to beneficiaries earning above  program limits. SSA policy is to obtain repayment within 36 months, but it may  approve longer repayment periods after reviewing an individual’s income,  expenses, and assets. Civil Monetary Penalties and Administrative Sanctions

SSA can take several actions against individuals who knowingly mislead  SSA or make false statements to obtain benefits, and these actions serve  as deterrents against potential fraud and abuse. SSA Is Missing Opportunities to Improve Recovery of Disability Insurance Overpayments

		SSA Relies on Withholding Benefits to Recover Most Overpayments

In fiscal year 2015, SSA identified about $1.2 billion in new DI  overpayment debt and recovered about $857 million, of which 78  percent was collected by withholding some or all of beneficiaries’ monthly  benefits (see fig. Gaps Exist in SSA’s Guidance, Oversight, and Verification of Information Related to Withholding Plans

Despite SSA’s heavy reliance on withholding benefits to recover debt, we  found gaps in SSA’s guidance, oversight, and verification of information  related to establishing withholding plans. Officials told us that one change they are  considering is to make the minimum monthly withholding amount 10  percent of an individual’s monthly benefit instead of the current $10  minimum, but SSA is in the early stages of studying this option and does  not yet have time frames for implementing such a change. We estimate this option would increase  scheduled collections by $276 million over 5 years and reduce the  median scheduled time to fully recover all beneficiary overpayments from  3.4 years to 2.3 years. SSA Lacks Reliable Data and Oversight to Know Whether Penalties and Sanctions Are Used Effectively

		SSA Lacks Reliable Data to Track and Tools to Collect Penalties

SSA’s OIG has in recent years increased its use of penalties against  individuals who knowingly mislead the agency, according to SSA’s Office  of Counsel to the Inspector General (OCIG), which is responsible for  imposing penalties. According to its plans, SSA hopes to: by  fiscal year 2018, assign penalties a unique transaction code to be able to  track them through the collection process; and by fiscal year 2020  unbundle penalties from other debts owed by an individual in its ROAR  database—which is used to track debts and collections—in order to allow  remittances to be directly applied to penalties as opposed to an  individual’s cumulative debt. A recent OIG  audit highlighted the difficulty that SSA has in collecting delinquent  penalties. The majority of that  amount (approximately $920,000) was associated with individuals not  receiving benefits and with whom SSA had no ongoing collection  actions—the same category of individuals who could be targeted with  external collection tools. According to officials, SSA drafted a  regulation for implementing these options; however, the regulation is still  undergoing internal review and SSA does not yet have time frames for  implementing these options. Moreover, the agency determined it is  prohibited by statute from referring delinquent penalties for collection  through other tools, such as federal salary offset, credit bureau reporting,  and assessing interest. Nevertheless, SSA has not explored pursuing  legislative authorities to use these tools. SSA Recently Changed Its Sanctions Procedures, but Weaknesses Persist

SSA collaborated with OIG to change its sanctions procedures in 2013 in  an effort to more consistently impose sanctions across the agency. SSA cannot reasonably ensure sanctions are imposed as appropriate:  SSA officials told us that they could not provide us with reliable data  on the disposition of sanction cases. Recommendations for Executive Action

To ensure effective and appropriate recovery of DI overpayments and  administration of penalties and sanctions, we recommend the Acting  Commissioner of the Social Security Administration take the following 8  actions:
Clarify its policy for assessing the reasonableness of expenses used in determining beneficiaries’ repayment amounts to help ensure that withholding plans are consistently established across the agency and accurately reflect individuals’ ability to pay. Pursue additional debt collection tools for collecting delinquent  penalties. However, it  disagreed with requiring supervisory review of repayment plans. SSA agreed with our recommendations to improve its ability to track  penalties and sanctions, and noted that it is developing workload tracking  tools for both, which it expects to implement in fiscal year 2016, and is in  the planning stages of an overpayment redesign effort said that should  result in more complete, accurate, and timely data for penalties. Appendix I: Objectives, Scope, and Methodology

In conducting our review of how the Social Security Administration (SSA)  recovers Disability Insurance (DI) overpayments and oversees civil  monetary penalties and administrative sanctions, our objectives were to  examine (1) how and to what extent SSA is recovering DI overpayments,  and (2) SSA’s procedures for imposing penalties and sanctions, and how  often they are used. Recovery of DI Overpayments

To determine how SSA recovers DI overpayments, we reviewed relevant  federal laws and regulations, and SSA policies and procedures. Our estimates are based on  withholding amounts and overpayments as of the end of fiscal year 2015  and the assumption that everyone will continue to pay based on the  current schedule. Appendix II: Additional Information on DI Overpayments

This appendix provides more information about individuals repaying DI  overpayments by having a portion of their monthly benefits withheld— notably, the relationship between their monthly benefit payments and the  amount of benefits withheld. Throughout this report,  the benefit levels we report are SSA’s “monthly benefit amount,” which is  the amount due to beneficiaries before withholding or other adjustments.
Why GAO Did This Study

SSA's DI program provides cash benefits to millions of Americans who can no longer work due to a disability. While most benefits are paid correctly, beneficiary or SSA error can result in overpayments—that is, payments made in excess of what is owed. In fiscal year 2015, SSA detected $1.2 billion in new overpayments, adding to growing cumulative debt. Further, when individuals inappropriately obtain benefits in certain situations, SSA can levy penalties or withhold benefits for a period of time. GAO was asked to study the use of these actions, and SSA efforts to recover overpayments.
This report examined how and to what extent SSA recovers overpayments, and imposes penalties and sanctions. GAO analyzed data on existing DI overpayments and repayment amounts at the end of fiscal year 2015 to determine the effect of potential improvements in recovery methods on collection amounts; and reviewed relevant federal laws, regulations, policies, and studies.

What GAO Found

In fiscal year 2015, the Social Security Administration (SSA) recovered $857 million in Disability Insurance (DI) overpayments that it erroneously made to beneficiaries; however, SSA is missing opportunities to recover more. More than three-fourths of the recovered overpayments in fiscal year 2015 were collected by withholding all or a portion of a beneficiary's monthly benefits. SSA's policy is to set withholding repayment amounts based on a beneficiary's income, expenses, and assets, but its policy regarding which expenses are reasonable is not clear. Moreover, SSA cannot know if repayment periods and amounts are consistently determined due to a lack of oversight, such as supervisory review or targeted quality reviews. Further, SSA lacks concrete plans for pursuing other debt recovery options, while GAO's analysis suggests that some options could potentially increase collections from individuals having their benefits withheld. For example, about half of withholding plans at the end of fiscal year 2015 extended beyond SSA's standard 36-month time frame, and could be shortened. Making the minimum monthly repayment 10 percent of a beneficiary's monthly benefit, instead of the current $10 minimum, would shorten the median length of all scheduled withholding plans by almost a third (from 3.4 years to 2.3 years) and result in an additional $276 million collected over the next 5 years.
While SSA officials reported an increase in recent years in the amount of civil monetary penalties imposed, SSA currently lacks reliable data to effectively track the disposition of penalties and administrative sanctions. For example, SSA cannot readily track the amounts ultimately collected from penalties, which are fines imposed by the Office of the Inspector General (OIG) and collected by SSA. Further, SSA currently has only two paths for collecting on penalties—withholding benefits and voluntary payment. A recent OIG audit found that the majority of uncollected penalty amounts it reviewed were from individuals who were not receiving SSA benefits and with whom SSA had no ongoing collection actions. SSA determined it is able to use certain alternative collection tools, such as wage garnishment, but only recently began drafting regulations to use them, and the regulations are still undergoing internal review. In addition, SSA lacks and had not explored obtaining authority to use other tools for collecting penalties that it uses for collecting overpayments—such as credit bureau reporting. Related to administrative sanctions, SSA could not provide reliable data on how often it imposes sanctions, a punishment in which benefit payments are temporarily stopped. SSA's process of manually entering sanctions information into a database may be subject to errors or omissions. Regional officials said this can result in incomplete information and staff not taking appropriate action on cases. SSA changed its procedure in 2013 to direct that all potential sanctions first be reviewed for potential prosecution or civil monetary penalties, but SSA's lack of reliable data prevents it from determining whether this new procedure achieved the intended effect of more consistent application of sanctions. In an internal evaluation of its procedures, SSA identified weaknesses with how sanctions decisions are tracked and communicated, but it is in the early stages of deciding how to address them. The shortcomings in SSA's use of penalties and sanctions potentially diminish the deterrent value of these actions against individuals who may fraudulently obtain benefits.

What GAO Recommends

GAO is making eight recommendations to SSA, including: clarify its policy and improve oversight related to debt repayment plans, pursue additional recovery options for overpayments and penalties, and improve its ability to track penalties and sanctions. SSA agreed with seven, but disagreed with a recommendation on debt recovery options. GAO maintains the options merit exploration, as discussed further in the report.