An SSA program aimed at collecting relatively small overpayments costs three times more to operate than it produces in savings, an IG audit has found.
The report noted that when SSA determines an individual has been overpaid, it generally initiates recovery actions regardless of the dollar amount. Using SSA’s accounting method, it estimated SSA collected approximately $109.4 million of the low-dollar overpayments—averaging less than $50 apiece—in 2013, at a cost of $323 million.
It added that while SSA’s cost accounting system includes the total cost for all actions related to collecting overpayments from beneficiaries, the average cost to collect on a supplemental security income overpayment is understated because it is recorded as a single action when in fact many separate actions commonly are needed.
It added that had the SSA spent that $323 million to on continuing disability review efforts, it may have been able to save as much as $3.2 billion. However, it said, SSA is limited in what it can spend on those reviews and could not transfer the money from one type of effort to the other.
