A recent federal audit has unveiled flaws in the Social Security Administration’s (SSA) Electronic Representative Payee System (eRPS), resulting in over $20 million in incorrect payments. According to the Office of the Inspector General (OIG), the SSA paid out approximately $22.8 million in benefits to the wrong recipients due to faulty payee records. The eRPS system is designed to process applications for representative payees, individuals appointed to manage Social Security or Supplemental Security Income (SSI) on behalf of beneficiaries who cannot do so, such as children or disabled individuals.
eRPS system gaps
The audit revealed that the root of the issue lies in the manual process required to update payee information in the system. Although eRPS alerts employees when inconsistencies arise between payee data and payment records, employees must manually correct these discrepancies.
The report highlighted that when human intervention is required without sufficient oversight, the risk of errors increases, especially if SSA employees do not follow established protocols. Such mismanagement has left around 9,300 beneficiaries with inaccurate payee types on record, impacting the submission of accounting reports, which are required from representative payees annually.
These errors lead to incorrect payments and an increase in the risk that funds may be misused, as payees can misuse benefits intended for vulnerable populations like the elderly and disabled. The OIG warned that the risk of continued financial losses and abuse of beneficiary funds remains high if the SSA does not address the system’s weaknesses.
“Without improvements, the agency will continue issuing benefits to incorrect payees without adequately monitoring their use of those benefits, increasing the risk that benefits owed to beneficiaries may be misused and the beneficiaries’ needs may not be met,” the report reads.
Effect on beneficiaries
For beneficiaries who have received overpayments, the SSA demands repayment within 30 days of issuing a notice. While beneficiaries can request a waiver, appeal, or payment plan, many are still left scrambling to repay thousands of dollars for mistakes they did not make.
The issue has sparked widespread criticism as some elderly or disabled individuals struggle to meet these stringent repayment demands.
News outlets like CBS News and ABC News have reported numerous cases of beneficiaries being hit with demands to repay thousands of dollars within short deadlines, with many unaware that they had been overpaid.
In some cases, recipients who had no involvement in the miscalculations found themselves facing financial hardship as a result of SSA’s errors. Beneficiaries are often shocked to discover that they are liable for the repayment, and the notice typically arrives with limited options for recourse.
SSA’s Response
The SSA is no stranger to improper payment issues, with a backlog of cases and mounting pressure to recover overpaid funds. In the 2022 fiscal year, the agency managed to recover approximately $4.7 billion in overpayments but was still left with over $21 billion outstanding, reflecting the scale of the problem.
Recent changes to repayment policies have been introduced to mitigate the burden on beneficiaries. The SSA now offers reduced withholding rates, with plans to recover overpayments at a rate of 10% or $10 per month, whichever is higher, to prevent placing beneficiaries in financial distress.
Moreover, the OIG has made several recommendations to the SSA, including a thorough review of beneficiaries with payee discrepancies and a reminder to staff regarding proper application processes.
The SSA has committed to addressing these recommendations, though the agency’s ongoing struggle with inaccurate payments, both underpayments and overpayments, suggests that more structural changes may be needed to prevent similar issues.
