The U.S. Department of the Treasury has recently recovered $31 million in improper payments made by Social Security to deceased individuals. This achievement was made possible through a pilot program launched after the approval of the omnibus appropriations bill in 2021, which allowed the Treasury temporary access to the Social Security Administration’s (SSA) “Complete Death Master File.”
This database, considered the most comprehensive in the country, contains records dating back to 1899 and is crucial for identifying deaths and preventing erroneous payments. According to David Lebryk, Treasury’s fiscal deputy secretary, this effort is just the beginning of a broader plan 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- Notification to family members: If the money has already been withdrawn, the SSA contacts the family or heirs, requesting reimbursement for the improperly received amounts.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 detection of deaths and prevent erroneous payments in the future. Furthermore, he emphasizes that full access would reduce fraud and ensure more responsible management of public funds.
This initiative aims not only to avoid financial losses but also to improve trust in the country’s social security and tax systems.
What can be learned from this experience?
The issue of improper payments highlights the importance of maintaining updated and accessible databases between public institutions. At the same time, it underscores the need for greater collaboration between government entities, families, and other stakeholders to quickly report deaths.
Impact on the future
With the recovery of $31 million as a first step, the Department of the Treasury aims to recover $215 million in improper payments. However, the success of this plan will largely depend on legislative cooperation and the development of more efficient systems for information management.
The effort to prevent erroneous payments not only results in economic savings but also reflects a commitment to ensuring that public resources are used appropriately and fairly.
