The United States Department of Treasury recently recovered $31 million in improper Social Security payments made to deceased individuals.
This achievement was made possible by a pilot program launched following the passage of the omnibus appropriations bill in 2021, which provided the Treasury with temporary access to the Social Security Administration’s (SSA) “Complete Death Master File.”
This database, regarded as the most comprehensive in the country, contains records dating back to 1899 and is critical for identifying deaths and preventing incorrect payments. According to David Lebryk, Treasury’s fiscal deputy secretary, this is only the beginning of a larger effort to reduce errors and protect public funds.
Why do improper payments happen?
Although erroneous payments represent a small fraction of the overall Social Security program, their impact is significant due to the scale of the system. The main causes of these errors include:
- Delays in reporting deaths: Often, family members, funeral homes, or medical institutions fail to report the death in a timely manner.
- Errors in updating records: Despite having the Death Index System, failures in data transfer or processing can result in payments continuing to be issued.
- Automatic payments: Social Security benefits are often deposited electronically. If the death is not recorded before the payment is processed, it is automatically issued.
How are funds recovered?
When the SSA detects an improper payment, it takes immediate action to recover the funds. These actions include:
- Bank return: In the case of direct deposits, banks are required to freeze the funds and return them to the SSA.
- Notification to family members: If the money has already been withdrawn, the SSA contacts the family or heirs, requesting reimbursement for the improperly received amounts.
A problem that requires long-term solutions
Deputy Secretary Lebryk has urged Congress to grant permanent access to the Death Master File, arguing that this would allow for more efficient death detection and prevent future errors in payments. He also emphasizes that full access would reduce fraud and ensure more responsible use of public funds.
This initiative seeks not only to prevent financial losses, but also to increase trust in the country’s social security and tax systems.
What can be learned from this experience?
The issue of improper payments emphasizes the importance of keeping databases up to date and accessible between public institutions. At the same time, it emphasizes the importance of greater collaboration among government entities, families, and other stakeholders in order to promptly report deaths.
Impact on the future
The Department of the Treasury intends to recover $215 million in improper payments, beginning with the recovery of $31 million. However, the success of this plan will rely heavily on legislative cooperation and the development of more efficient information management systems.
The effort to prevent erroneous payments not only saves money but also demonstrates a commitment to ensuring that public resources are used properly and fairly.