According to a new audit, the Social Security Administration paid $1 billion in benefits to people who don't even possess a Social Security Number (SSN).

According to the audit, which was released Friday, there were thousands of cases where the administration paid money to people who had no SSN on file.

"SSA needs to improve controls to ensure it (a) records individual representative payees’ SSNs in its payment records and (b) retains the application for representative payees who do not have an SSN," reads the report's findings.  "Based on our random sample, we estimate that 150,257 beneficiaries had an individual representative payee who had a valid SSN that SSA should have recorded on the MBR/SSR. Of these, 26,912 beneficiaries had representative payees whom, according to eRPS, SSA had terminated or not selected. From October 2004 to September 2016, SSA paid these representative payees about $853.1 million. Furthermore, unless it takes corrective action, we estimate SSA will pay these representative payees about $189.6 million in benefits annually.

"In addition, we estimate that 22,426 beneficiaries had an individual representative payee who did not have an SSN, and SSA had not followed its policy to retain the paper application," the report continues.  "These representative payees were not in eRPS. From April 2006 to September 2016, SSA paid these representative payees about $1 billion. Furthermore, unless it takes corrective action, we estimate SSA will pay these representative payees about $182.5 million in benefits annually."

Through random sampling, the Office of the Inspector General estimated that "150,257 beneficiaries had an individual representative payee who had a valid SSN that SSA should have recorded on the MBR/SSR. Of these, 26,912 beneficiaries had representative payees whom, according to eRPS, SSA had terminated or not selected. From October 2004 to September 2016, SSA paid these representative payees about $853.1 million.

The OIG estimated that the SSA will pay about $189.6 million in benefits, annually, to representative payees whom it had terminated or not selected.

The sampling also indicated that "22,426 beneficiaries had an individual representative payee who did not have an SSN, and SSA had not followed its policy to retain the paper application. These representative payees were not in eRPS. From April 2006 to September 2016, SSA paid these representative payees about $1 billion."

The OIG stressed that unless the SSA takes corrective action, they will "pay about $182.5 million in benefits, annually, to representative payees who do not have an SSN or paper application supporting their selection."

So, why did this happen?  According to the OIG report, there were three reasons.  The SSA did not:

  1. record the representative payee’s SSN on the MBR/SSR or retain a paper application supporting its selection of the representative payee and;
  2. remove terminated or non-selected representative payees from the MBR/SSR or update the information in eRPS.
  3. SSA’s systems did not always generate alerts when employees did not record a representative payee’s SSN on the MBR/SSR or when eRPS and the MBR/SSR had discrepant payee information.

Here is the results of the random sampling of 100 beneficiaries.

representatives payee's ssns not recorded on ssa's payment records

Of course, the government defended paying out benefits to noncitizens and people without a SSN, which seems blatantly outrageous.

“Representative payees play a significant role in many beneficiaries’ lives,” the SSA said. “We have approximately 5.7 million representative payees managing annual benefits for approximately 8 million beneficiaries. When appointing representative payees, we adhere to guidance in the Social Security Act (the Act).”

“Specific to this audit, the Act permits us to appoint, in certain circumstances, an undocumented alien, or applicant who resides outside the United States without a Social Security number (SSN) to serve as payee,” the agency said. “Specifically, the Act states we should verify a person’s SSN (or employer identification number) in our investigation of the payee applicant. However, the Act does not state that the applicant must have an SSN to serve as a payee.”

The “absence of an SSN is not a criterion preventing an individual from serving as payee,” the agency added.

The OIG issued the following recommendations:

  1. Take appropriate action for the 77 beneficiaries whose representative payees’ SSNs are not on the MBR/SSR, as identified by our audit.
  2. Evaluate the results of its actions for the 77 beneficiaries and determine whether it should review the remaining population of 224,164 beneficiaries we identified.
  3. Improve controls to ensure (a) it records representative payees’ SSNs on the MBR/SSR and (b) its systems generate alerts when there is a discrepancy between representative payee information in eRPS and the MBR/SSR.
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