Social Security Issues Millions in Benefits to Deceased

A recent report issued by the Social Security inspector general revealed the office makes it a habit of issuing payments to deceased beneficiaries. This is at a time when the Social Security Administration is already in danger of running out of money for living recipients when they retire.

Social Security Has Paid $40.3 Million to Dead

In a recent report from the Social Security inspector general, a watchdog agency, it is estimated the administration has made $40.3 million in erroneous payments to deceased beneficiaries. This is even after it had already recorded the beneficiaries’ deaths in their records.

The inspector general made the estimate after conducting a sample test during its most recent audit in January 2008. Since that time, it estimates nearly 2,000 deceased beneficiaries were receiving benefits for months or even years after the administration was notified of their deaths.

According to CNNMoney.com, which reported this story, a number of individuals have indeed had a difficult time getting the Social Security Administration to stop sending checks.

One man explained he had notified Social Security four years ago that his mother passed away. However, despite his communications, the administration has yet to stop sending her checks every month.

Trust Fund to Run Out of Money by 2017

While the Social Security Administration is paying out millions to individuals who have passed on, future beneficiaries are worried there won’t be enough money available to pay them when the reach retirement.

This is because the trust fund that supports disability and retirement benefits is expected to run out of money in six short years.

According to estimates released by Congress in mid-August, the administration’s trust fund is in danger of running dry. Applications have already increased nearly 50 percent as a result of massive job loss, as well as an increase in retirees from the baby boomer generation.

To stop the fund from being depleted, lawmakers have proposed a range of ideas that include increasing the retirement age to means-testing benefits for wealthy retirees.

Of course, simply stopping payments to deceased beneficiaries could add a lot more to the pot.

The inspector general estimates the administration could save about $152 million in unnecessary costs this year alone. It says the administration needs to do a better job of identifying who is actually owed money to help avoid this problem in the future.