Social Security Paid Disability Benefits to More Than 700 Deceased Veterans

Unless the agency fixes the problem, it’s likely to make another $7.3 million in improper payments over the next 12 months.

The Social Security Administration paid out nearly $38 million in disability insurance payments to 746 deceased veterans, the agency's inspector general found, because the deaths had not been properly recorded in the agency’s databases. Unless Social Security corrects its records, it will likely make another $7.3 million in improper payments over the next 12 months.  

The audit released in late August by Social Security’s inspector general found problems stemming from flawed information sharing between the Veterans Affairs Department and SSA. Besides improperly paying some deceased veterans, Social Security also listed some veterans as deceased when they in fact were alive: Of a group of 3,925 beneficiaries for whom Social Security files included a date of death, 11 percent were found by auditors to still be living, according to the report signed by acting IG Gale Stallworth Stone.

In administering the Survivors and Disability Insurance and the Supplemental Security Income programs to the needy or disabled and their survivors, SSA receives death information from friends and relatives of the deceased, funeral homes, financial institutions, and federal and state agencies. The VA every month provides Social Security with automated death records from its Beneficiary Identification Records Locator System and/or Veterans Service Network. Before terminating benefit payments or recording death information, SSA employees are supposed to conduct their own verification of the VA-provided death information.

In an examination of 100 randomly selected beneficiaries, the IG, seeking corroboration through death certificates, obituaries or grave locations, “determined that 11 beneficiaries were alive,” the report said. “In seven instances, SSA records indicated that SSA employees had face-to-face contact with the beneficiaries after their dates of death in VA records. In the other four instances, SSA records indicated that VA had erroneously added a spouse’s death information to the veteran’s record.”

The watchdog described a veteran receiving retirement benefits in California who died in Thailand in August 2008. Social Security had no record of the death, so the IG’s Office of Investigations obtained from the State Department a copy of the beneficiary’s report of death of an American Citizen Abroad. The auditors concluded that Social Security had sent the man $160,000 in benefits after he died.

Previously, in a June 2006 report, the IG identified 1,691 individuals who were recorded as deceased by the VA, but continued to receive benefits from Social Security.

The IG recommended that Social Security review the IG’s file of the 3,925 beneficiaries in question and take appropriate action, terminate wrongful payments and refer fraud charges to the Office of Investigations. It also recommended that SSA work with VA to make data exchanges more comprehensive.

The agency agreed.