Social Security computer system may reduce disability overpayments

The Social Security Administration completed a nationwide rollout this month of a new system to aid in collecting and processing information about Disability Insurance beneficiaries who hold jobs.

Lockheed Martin assisted in the development and deployment of the system, known as eWork, which builds on two applications designed by employees in field offices.

The agency expects that eWork will help reduce overpayments made to beneficiaries who, after a trial employment period, earn too much money to qualify for continued benefits. Both the General Accounting Office and the Social Security Inspector General have found that such overpayments cost the agency staggering sums each year.

Disability Insurance was created in 1956. It was based on a traditional insurance model to cover workers who pay into the system and develop a disability that prevents them from earning substantial income. Since then, social and economic changes have improved employment opportunities for disabled people. Congress has passed legislation to encourage Disability Insurance beneficiaries to return to work through a series of complex incentives.

Recipients of Supplemental Security Income, the agency's other disability program, are also eligible for work incentives. But because SSI is a need-based program, the agency generally keeps closer tabs on beneficiaries' earnings.

Disability Insurance recipients may test their ability to work during a trial period without losing their benefits. This period ends after the beneficiary has worked for any nine months out of 60 consecutive months. The agency then assesses the beneficiary's work activity. Social Security employees must apply a complex series of deductions for areas such as expenses related to the disability or support provided on the job before determining whether the earned income exceeds the threshold amount.

The eWork system automates this review, which until now has been conducted on paper. It draws information about beneficiaries from various nationwide databases, assembles the data in an electronic folder, and provides an electronic repository for information as it is reported. It also builds in management controls that ensure Social Security employees follow all of the agency's regulations and gives managers an overview of the workload. It generates reports that give beneficiaries real-time information about how their work activity will affect their benefits. A Government Accountability Office report published in September (GAO-04-929) stated that SSA had detected $990 million in Disability Insurance overpayments in fiscal 2003, up from $772 million in 1999. This was just the total of overpayments that were discovered; the agency does not know the true total of improper payments. The largest individual overpayments exceeded $100,000.

The prospect of having to repay such large amounts may deter beneficiaries from seeking employment. GAO found that about one third of Disability Insurance overpayments result from beneficiaries whose earnings exceeded the amount allowed.

The Social Security Inspector General issued the results of an audit in July (A-01-03-13019) that assessed Disability Insurance beneficiaries' earnings reported to the agency by March 2002. The audit found that the agency had not assessed all of the earnings for 41 percent of 275 sample cases. Based on the sample, the audit estimated that 171,620 beneficiaries had been overpaid $3.15 billion because of work income.