For many years, American taxpayers have been concerned that the Social Security Administration (SSA) will not have enough money to pay out benefits at retirement; yet, the agency continues to pay millions of dollars to people who are no longer alive.  According to The Daily Progress, results of a 2011 study showed that the SSA distributed almost $99 million to deceased beneficiaries.  Many of the erroneous payments are a result of computer system errors, but sometimes family members intentionally neglect to report their loved one’s death with the motive of collecting the monthly benefits check.  (Shocking, I know.) When this occurs, an act of fraud is committed – such as in the case of a Virginia woman, who continued to collect Social Security benefits for four-and-a-half years after her mother died.

No one knows for sure what makes someone commit fraud, but money is usually the motive.  Hard economic times can motivate even the most honest of people to do things they wouldn’t normally do. The article states that the Virginia resident spent almost $70,000 of her mother’s Social Security benefits without ever signing a check.  Most of the funds were used to maintain her home, which she has subsequently sold to repay the government.

What makes this case – one out of 890 cited in the 2011 study – unique is that the perpetrator cooperated from the outset of the investigation.  Her acceptance of responsibility for the fraudulent act, coupled with a non-existent prior criminal record, helped the judge to determine a lenient sentence, which required payment of a $2,000 fine and a $100 special assessment. (Do what your mother told you. Always tell the truth.)

Death records are important because they affect other federal programs such as Medicare, Medicaid and food stamps.  These programs rely on the beneficiary status listed in public records, and if the data is incorrect, other federal agencies also will end up doling out erroneous payments to people who are dead. (This costs the rest of us living taxpayers a lot of money.) This sounds like a great opportunity for government agencies to use public records data to verify that the beneficiary is actually among the land of the living.

  1. All death certificates should be automatically uploaded and/or entered into the SSA data-bases from the issuing authorities.

    • Donald,
      I could not agree more. The challenge that the SSA runs into is not all deaths are reported and or recorded. In some states it is up to the hospital to create the death certificate, in others it falls to the funeral home director. When my own father died, we were directed to call SSA ourselves to notify them. It seems that there is little consistency on notification. Thus the Master Death Index file then becomes out of sync with reality.

      As you have seen with many of the articles on Fraud of the Day, numerous individuals have never notified SSA of the passing of a relative and they just keep collecting the check of the deceased, in some cases for multiple decades.

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