WASHINGTON, D.C. – The Social Security Administration takes pride in its “passion for assisting our customers financially” and in “providing superior customer service.”
Passionate support and superior service do not adequately describe the experiences of nearly 14,500 students who were defrauded by the agency of nearly $60 million.
According to an internal watchdog audit report released last week, data entry errors by Social Security employees resulted in the underpayments.
Investigators with the Social Security Administration’s Office of Inspector General determined that nearly all students in a sample selection were incorrectly denied benefits when they reached the age of 18. Seventy-seven of the sample’s hundred students were underpaid by a total of $357,872. Their average payment shortfall was $4,113.
Between January 2003 and May 2020, the inspector general estimated that 14,470 student beneficiaries were underpaid by $59.5 million.
While Social Security is commonly thought of as a retirement program for the elderly, it also benefits thousands of young people. When most children of older or disabled beneficiaries who receive Social Security benefits reach the age of 18, they lose their benefits. However, if they are enrolled in an elementary or secondary school or have a disability, the payments are supposed to continue. Students must be enrolled full time, which equates to at least 20 hours per week, and be under the age of 19 years and two months.
As concerning as the underpayments are, what’s more concerning is the agency’s failure to act when the errors were discovered.
“In July 2020, we provided the Social Security Administration with information regarding these 87 students,” the audit report stated. “As of December 2021, the Social Security Administration had corrected one of these errors.”
“The system generated alerts in four of the 87 error cases in our sample,” the report continues, “but we found no evidence that SSA employees took the necessary actions to pay these students.”
The agency acknowledged the errors and their “significant impact on people” in a statement, but added that the reported cases “represent a very small percentage of all student cases handled.
Officials from the agency did not explain why no action was taken in response to investigators’ findings, nor did they state that everyone who was defrauded had been compensated. “We are also investigating these instances,” the statement stated, “and will make necessary corrections and issue refunds as necessary.”
Ralph C. de Juliis, president of the American Federation of Government Employees’ National Council of Social Security Administration Field Operations Locals, attributed the SSA’s woes to “frighteningly out-of-date” computer systems that “are incapable of performing even basic functions like automatically verifying continued eligibility.”
For advocates for Social Security, the audit’s findings are unsettling but unsurprising.
“SSA incorrectly denying benefits to 87 percent of students whose cases were examined by its Inspector General is distressing but unsurprising,” said Nancy Altman, president of the advocacy group Social Security Works. “The Social Security Administration’s mission is to ensure that families receive earned benefits on time and in full. However, in recent decades, anti-Social Security members of Congress have pushed SSA aggressively to pursue overpayments at the expense of underpayments and timely determinations.”
Altman attributed the agency’s “myopic focus on preventing people from being paid too much rather than on preventing people from being paid too little” to “this thumb on the scale.” Indeed, it has been more than a year and a half since the IG provided SSA with information regarding underpaid students. Yet, as of December, the agency had corrected only one of the 87 underpayments identified by the IG.”
The National Committee to Preserve Social Security and Medicare’s Max Richtman described the underpayments as “a symptom of chronic underfunding of core agency functions, such as staffing, training, and systems.”
Social Security “lacked adequate controls” to ensure that those under the age of 18 and still enrolled in school received benefits, according to the inspector general’s report. Two computer systems “failed to generate alerts when SSA employees entered student data incorrectly.” Another system “failed to recognize these errors or generate alerts” informing employees of the issues.
In one instance, an 18-year-old submitted an agency form indicating that he intended to continue as a full-time student and was therefore eligible for benefits. However, the audit discovered that “an employee entered student data incorrectly,” terminating the student’s benefits. This resulted in him forfeiting 15 months of additional benefits totaling $19,620.
Minor errors can have significant consequences. In another instance, the audit stated that an employee misrecorded a student’s school year, “resulting in the beneficiary not receiving benefits once she reached the age of 18.”
Social Security officials agreed with the report’s recommendations, which included compensating beneficiaries, training employees to properly enter student information into computer systems, and updating those systems to alert employees to potentially incorrect information and when data indicates an 18-year-old is a full-time student eligible for benefits.
The National Committee to Preserve Social Security and Medicare has made a more audacious recommendation to aid students and their parents. Its legislative agenda for 2022 states that full-time students should continue to receive student benefits until the age of 22, as was the case prior to Congress ending postsecondary benefits in 1981.
“Restoring this benefit would benefit those who are unable to save for retirement because they are assisting their children with college or vocational school expenses,” the committee stated in a statement.
Whether eligibility is expanded or not, “bureaucratic errors should not result in the denial of students’ benefits,” said Sen. Sherrod Brown, D-Ohio, chairman of the Senate Finance Social Security subcommittee. “The IG’s findings demonstrate that the agency requires additional funding to modernize its technology, increase staffing, and provide the level of service expected by Americans.”
The SSA statement echoed this, stating that “over the last decade, base administration appropriations have fallen short of covering our fixed costs.”
De Juliis concurred on the importance of modernizing technology, adding, “The public would be shocked to learn how archaic our operating systems are.”