Possible Improper Payments of Benefits by the Social Security Administration, Department of Health, Education, and Welfare

Published by the Government Accountability Office on 1971-10-21.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                              COMPTROLLER     GENERAL     OF THE: UNITE
                                            WASHINGTON.   D.C.   20548


       Dear Mr.      Scott:
’ 1.
              Your letter      of June 11, 1971, requested      that we            examine
       into statements       made by a constituent      in two letters             to you
\      concerning_possible        improper    payments of benefits     by          the Social
       Security    Administration       (SSA), Department   of Health,             Education,      -?',
       and Welfare.                                                                                3 's

              Essentially,       your constituent          stated     that retirement      bene-
       fits   were being paid to certain             persons      before     they retire     and
       his analysis        of the situation       indicated        (1) a loosely      drawn
       law or a misrepresentation            of the law by SSA, (2) errors                by
       Social   Security      personnel,      (3) an error        in computer      programming,
       or (4) a combination          of the three.           He also questioned        the ade-
       quacy of SSA controls          to detect      falsified       reports     of annual
       earnings    by beneficiaries         after    they retire.
               Your constituent's         inquiry  was prompted     by his receipt
       in February       1971 of a check in the amount of $1,023.20              for so-
       cial    security     benefits    for the months January through          April
       1970, although        he had worked through      April   1970 and his earn-
       ings of $16,666.70           for this period   exceeded the maximum amount
       permitted       by law in order to qualify        for social    security      bene-

               The law on social           security     benefits     provides    for the pay-
       ment of full        monthly     retirement       benefits     to beneficiaries
       having annual earnings              of $1,680 or less and for a reduction
       in the benefits          when their       earnings     exceed this amount.        The
       law provides         also that,      regardless      of total     annual earnings,
       benefits    will      not be withheld         for any month in which the
       beneficiary        did not earn more than $140 in wages or self-
       employment       income.
               To enable SSA to adjust       benefits    in accordance  with the
       law, beneficiaries         who earn more than $1,680 are required       to
       report    their   earnings    to SSA on or before      the 15th day of the
       4th month (generally         April  15) following    the end of their
       taxable     year.

                                   50TH ANNIVERSARY 1921-1971

       SSAi's files     show that     your       constituent
       --applied    for retirement        insurance   benefits        in January
          1970 so that his wife          would be eligible         for Medicare
          benefits,    even though       he was continuing         to work;
       --elected    to have his       application          retroactive to March
           1969 (which was the        month that         his wife became 65 years
          of age); and
       --continued       to work until   April  1970 and, because his
          earnings     exceeded the maximum amount allowed       by law,
          was not     entitled  to benefits    during that period.
        In reporting      his 1970 earnings          to SSA in January         1971,
however!     your constituent          apparently      inadvertently      omitted     one
digit     in the amount of his annual earnings;                   instead   of report-
ing $16,666.70,       he reported         $16,66.70.       Because the law on so-
cial   security     benefits       provides     that benefits        can be paid for
all months of the year when annual earnings                       do not exceed
$1,680,     SSA concluded        that he was eligible           for benefits      for
the months January          through      April,    in addition       to Lhe benefits
he began receiving          in May 1970, after           he stopped working.
       He was not, however,          entitled      to the social security    bene-
fits   of $1,023.20       because    (1) his 1970 annual earnings         of
$16,666.70      exceeded the maximum amount permitted            by law and
 (2) he earned more than $140 in each of the months January
through    April    1970.     Therefore       he returned  the check to SSA
in June 1971.
SSA'S CONTROLS TO DETECT                                       OCUMENTAVAILABLE
        To detect    erroneous     reports     of annual earnings        by benefi-
ciaries     and errors     made by SSA in recording          the earnings,       SSA--
through     computer    techniques    --compares      the beneficiaries'       earn-
ings recorded      by SSA with those reported             to the Internal      Rev-
enue Service      by the beneficiaries'          employers.       All differences
are reviewed      and corrective        action   is taken if necessary.           An
SSA representative         advised    us that the comparison           is made an-
nually    for earnings      of the previous        calendar    year.     The com-
parison     of 1970 earnings       has not yet been completed.             According
to the SSA representative,            the error     in your constituent's
case should ordinarily          be detected      in the comparison


and, if the check had not been returned,    SSA would                   take action
in accordance with the law to recover    the incorrectly                    paid
        When the comparison    for 1970 earnings     is completed,     we
will    examine the results    to determine    if the error   in your
constituent's      case was detected.     We will   consider  any indi-
cated weakness in the SSA controls          in our continuing    reviews
of SSA activities.
     We trust    the   above   information      will   serve     the    purpose
of your request.

                                               Sincerely       yours,

                                    IL         Comptroller   General
                                               of the United   States
The Honorable  William     L. Scott
House of Representatives