Major Causes of Improper Payments
The graph below indicates the major causes of improper payments (overpayments and underpayments) in FY 2011 for the RSDI program using OMB’s three categories of error:
| Major Causes of RSDI Improper Payments in FY 2011 | ||
|---|---|---|
| % of Improper Payments | Major Types of Errors | |
| Verification and Local Administration Errors | 64% | Non-verification of earnings, income, or work status (e.g., in relation to Substantial Gainful Activity (SGA) and Government Pension Offset (GPO)); inputting, classifying, or processing applications or payments incorrectly
|
| Administrative and Documentation Errors | 35% | Incorrect computations, onset dates, and earnings history |
| Authentication and Medical Necessity Errors | 1% | Relationship/dependency errors and failure to report cessation of full-time attendance for students |
The following tables indicate the major causes of RSDI overpayments and underpayments, for FYs 2007 - 2011, as determined from our payment accuracy reviews:
| Major Causes of RSDI Overpayments FY 2007 – FY 2011 | |
|---|---|
| SGA | When a disability beneficiary works, a number of factors determine whether or not the individual can continue to receive monthly benefits. After completing a nine-month trial work period, we do not pay a beneficiary for months when earnings exceed SGA thresholds. Errors occur when beneficiaries fail to report earnings timely, or when we do not timely withhold monthly benefit payments from those engaging in SGA. |
| Computations | We determine an individual's benefit amount by a number of factors, including age, earnings history, and the type of benefit awarded. Inaccurate information or administrative mistakes can cause errors in calculating benefits. In terms of overpayments, computation errors involving the Windfall Elimination Provisions are the leading cause of deficiencies. |
| Earnings History | The earnings reported on an individual’s work history help determine the amount of monthly benefits that the individual or someone filing on that account will receive. When the earnings record does not accurately reflect the individual’s earnings, errors can occur when the individual applies for benefits. |
| Government Pension Offset | We may offset RSDI benefits for a spouse or surviving spouse if he or she receives a Federal, State, or local government pension based on work for which the spouse did not pay Social Security taxes. Errors occur when receipt of these types of pensions are not reported. |
| Major Causes of RSDI Underpayments FY 2007 – FY 2011 | |
|---|---|
| Computations | We determine an individual's benefit amount by a number of factors including age, earnings history, and the type of benefit awarded. Inaccurate information or administrative mistakes can cause errors in calculating benefits. |
| Earnings History | The earnings reported on an individual's work history help determine the amount of monthly benefits that the individual or someone filing on that account will receive. When the earnings record does not accurately reflect the individual's earnings, errors can occur when the individual applies for benefits. |
| Workers' Compensation (WC) | If a person receives both WC and Social Security disability benefits, the total amount of these benefits cannot exceed 80 percent of his or her average current earnings before becoming disabled. If the total exceeds that amount, we reduce Social Security disability benefits until reaching the 80 percent threshold. Underpayments occur when the receipt of WC decreases or ceases, and we do not adjust the disability benefit. |