DISABILITY 

INSURANCE

SSA Needs to Better 

Track Efforts and 

Evaluate Options to 

Recover Debt and 

Deter Potential Fraud

Report to the Chairman of the 

Subcommittee on Social Security, 

Committee on Ways and Means, House 

of Representatives

April 2016

GAO-16-331

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-16-331, a report to the 

Chairman of the Subcommittee on Social 

Security, Committee on Ways and Means, 

House of Representatives

April 2016

DISABILITY INSURANCE

SSA Needs to Better Track Efforts and Evaluate 

Options to Recover Debt and Deter Potential Fraud

Why GAO Did This Study

SSA’s DI program provides cash 

benefits to millions of Americans who 

can no longer work due to a disability. 

While most benefits are paid correctly,

beneficiary or SSA error can result in 

overpayments—that is, payments 

made in excess of what is owed. In 

fiscal year 2015, SSA detected $1.2 

billion in new overpayments, adding to 

growing cumulative debt. Further, 

when individuals inappropriately obtain 

benefits in certain situations, SSA can 

levy penalties or withhold benefits for a 

period of time. GAO was asked to 

study the use of these actions, and

SSA efforts to recover overpayments.

This report examined how and to what

extent SSA recovers overpayments,

and imposes penalties and sanctions. 

GAO analyzed data on existing DI 

overpayments and repayment amounts 

at the end of fiscal year 2015 to 

determine the effect of potential 

improvements in recovery methods on 

collection amounts; and reviewed 

relevant federal laws, regulations, 

policies, and studies.

What GAO Recommends

GAO is making eight recommendations

to SSA, including: clarify its policy and

improve oversight related to debt 

repayment plans, pursue additional

recovery options for overpayments and 

penalties, and improve its ability to 

track penalties and sanctions. SSA 

agreed with seven, but disagreed with 

a recommendation on debt recovery 

options. GAO maintains the options 

merit exploration, as discussed further 

in the report.

What GAO Found

In fiscal year 2015, the Social Security Administration (SSA) recovered $857 

million in Disability Insurance (DI) overpayments that it erroneously made to 

beneficiaries; however, SSA is missing opportunities to recover more. More than 

three-fourths of the recovered overpayments in fiscal year 2015 were collected 

by withholding all or a portion of a beneficiary’s monthly benefits. SSA’s policy is 

to set withholding repayment amounts based on a beneficiary’s income, 

expenses, and assets, but its policy regarding which expenses are reasonable is 

not clear. Moreover, SSA cannot know if repayment periods and amounts are 

consistently determined due to a lack of oversight, such as supervisory review or 

targeted quality reviews. Further, SSA lacks concrete plans for pursuing other 

debt recovery options, while GAO’s analysis suggests that some options could 

potentially increase collections from individuals having their benefits withheld. For 

example, about half of withholding plans at the end of fiscal year 2015 extended 

beyond SSA’s standard 36-month time frame, and could be shortened. Making 

the minimum monthly repayment 10 percent of a beneficiary’s monthly benefit, 

instead of the current $10 minimum, would shorten the median length of all 

scheduled withholding plans by almost a third (from 3.4 years to 2.3 years) and 

result in an additional $276 million collected over the next 5 years.

While SSA officials reported an increase in recent years in the amount of civil 

monetary penalties imposed, SSA currently lacks reliable data to effectively track 

the disposition of penalties and administrative sanctions. For example, SSA 

cannot readily track the amounts ultimately collected from penalties, which are 

fines imposed by the Office of the Inspector General (OIG) and collected by SSA.

Further, SSA currently has only two paths for collecting on penalties—

withholding benefits and voluntary payment. A recent OIG audit found that the 

majority of uncollected penalty amounts it reviewed were from individuals who 

were not receiving SSA benefits and with whom SSA had no ongoing collection 

actions. SSA determined it is able to use certain alternative collection tools, such 

as wage garnishment, but only recently began drafting regulations to use them, 

and the regulations are still undergoing internal review. In addition, SSA lacks 

and had not explored obtaining authority to use other tools for collecting penalties 

that it uses for collecting overpayments—such as credit bureau reporting.

Related to administrative sanctions, SSA could not provide reliable data on how 

often it imposes sanctions, a punishment in which benefit payments are 

temporarily stopped. SSA’s process of manually entering sanctions information 

into a database may be subject to errors or omissions. Regional officials said this 

can result in incomplete information and staff not taking appropriate action on 

cases. SSA changed its procedure in 2013 to direct that all potential sanctions

first be reviewed for potential prosecution or civil monetary penalties, but SSA’s

lack of reliable data prevents it from determining whether this new procedure 

achieved the intended effect of more consistent application of sanctions. In an 

internal evaluation of its procedures, SSA identified weaknesses with how 

sanctions decisions are tracked and communicated, but it is in the early stages of 

deciding how to address them. The shortcomings in SSA’s use of penalties and 

sanctions potentially diminish the deterrent value of these actions against 

individuals who may fraudulently obtain benefits.

View GAO-16-331. For more information, 

contact Daniel Bertoni at (202) 512-7215 or 

bertonid@gao.gov.
Page i GAO-16-331 Disability Insurance 

Letter 1

Background 3

SSA Is Missing Opportunities to Improve Recovery of Disability 

Insurance Overpayments 9

SSA Lacks Reliable Data and Oversight to Know Whether 

Penalties and Sanctions Are Used Effectively 24

Conclusions 28

Recommendations for Executive Action 29

Agency Comments and Our Evaluation 30

Appendix I Objectives, Scope, and Methodology 33

Appendix II Additional Information on DI Overpayments 39

Appendix III Comments from the Social Security Administration 45

Appendix IV GAO Contact and Staff Acknowledgments 50

Related GAO Products 51

Tables

Table 1: Potential Increases to Scheduled Disability Insurance 

Overpayment Collections for Fiscal Years 2016-2020 

Achieved by Adjusting Existing Withholding Plans 23

Table 2: Distribution of Monthly Benefit Amounts before 

Withholding for Individuals Repaying Overpayments 

through Benefit Withholding 41

Table 3: Distribution of Dollars Withheld per Month for Individuals 

Repaying Overpayments through Benefit Withholding 42

Table 4: Distribution of the Percent of Monthly Benefits Amount 

Withheld to Recover Overpayments 43

Table 5: Distribution of Time Needed to Complete Repayment 

through Scheduled Benefit Withholding (in Years) 44

Contents
Page ii GAO-16-331 Disability Insurance 

Figures

Figure 1: Overpayment Debt Established and Collected from 

Social Security Disability Insurance Beneficiaries, Fiscal 

Years 2006-2015 7

Figure 2: SSA Disability Insurance Overpayments Recovered, by 

Method Used, Fiscal Year 2015 10

Figure 3: Estimated Time to Fully Recover Disability Insurance 

Overpayment Debts through Benefit Withholding (for 

Debts Outstanding at the End of Fiscal Year 2015) 11

Figure 4: Monthly Benefits Withheld from Beneficiaries to Recover 

Disability Insurance Overpayments (End of Fiscal Year 

2015) 12

Figure 5: Percentage of Monthly Benefits Withheld to Recover 

Disability Insurance Overpayments (End of Fiscal Year 

2015) 12

Figure 6: Years to Full Disability Insurance (DI) Overpayment 

Recovery—Current Benefit Withholding versus 

Withholding a Minimum of 10 Percent of Monthly 

Benefits—for All Beneficiaries Having Benefits Withheld 

as of September 30, 2015 21

Figure 7: Comparison of Median Withholding Amounts and 

Withholding Amounts as a Percentage of Monthly 

Benefits (for Each Beneficiary Monthly Benefits Decile) 39

Figure 8: Comparison of Median Withholding Amounts and 

Median Monthly Benefits (for Each Beneficiary Monthly 

Benefits Decile) 40
Page iii GAO-16-331 Disability Insurance 

Abbreviations

AFI Access to Financial Institutions

COLA Cost of Living Adjustment

DI Disability Insurance

DOJ Department of Justice

ECO External Collection Operation system

IRS Internal Revenue Service

NDNH National Directory of New Hires

OCIG Office of Counsel to the Inspector General

OIG Office of the Inspector General

SSA Social Security Administration

SSI Supplemental Security Income

SSN Social Security Number

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page 1 GAO-16-331 Disability Insurance

441 G St. N.W.

Washington, DC 20548

April 13, 2016

The Honorable Sam Johnson

Chairman

Subcommittee on Social Security

Committee on Ways and Means

House of Representatives

Dear Mr. Chairman:

The Social Security Administration’s (SSA) Disability Insurance (DI) 

program serves as a critical safety net for individuals who can no longer 

work because of physical or mental impairments. In fiscal year 2015, 

about 10.8 million beneficiaries and their dependents received 

approximately $144 billion in benefits. That same year, SSA reported 

detecting $1.2 billion in new DI overpayments—payments made in excess 

of what individuals are owed. Past GAO work has highlighted the 

importance of preventing overpayments to DI beneficiaries given the 

financial burden it places on recipients and the difficulty this population 

may have in repaying these debts.1 Nevertheless, recovering erroneous 

payments once they are made is also an important part of maintaining the 

integrity of the program. While SSA has a number of tools to recover 

overpaid benefits, previous GAO reviews found shortcomings in the 

agency’s recovery efforts, and the total amount of DI overpayment debt 

that has accumulated increased by 70 percent over the past 10 years. 

SSA can also take actions against individuals who mislead the agency to 

fraudulently obtain benefits by imposing civil monetary penalties, or 

imposing administrative sanctions that involve halting benefit payments. 

Yet past work by SSA’s Office of the Inspector General found that SSA 

did not effectively collect penalties2 and rarely sanctioned individuals.3

 1

GAO. Disability Insurance: SSA Could Do More to Prevent Overpayments or Incorrect 

Waivers to Beneficiaries, GAO-16-34 (Washington D.C.: Oct. 29, 2015).

2

Social Security Administration, Office of the Inspector General, Follow-up: Collection of 

Civil Monetary Penalties, A-06-14-14047 (Baltimore, MD.: Mar. 10, 2015).

3

Social Security Administration, Office of the Inspector General, The Social Security 

Administration’s Use of Administrative Sanctions in the Old-Age, Survivors and Disability 

Insurance Program, A-07-14-14047 (Baltimore, MD: Sept. 19, 2015).

Letter
Page 2 GAO-16-331 Disability Insurance

In light of these issues, you asked us to study SSA’s efforts to collect 

overpayments, and its use of penalties and sanctions. This report 

examines (1) how and to what extent SSA is recovering DI overpayments, 

and (2) SSA’s procedures for imposing penalties and sanctions, and how 

often they are used.

To determine how and to what extent SSA recovers overpayments, we 

collected available data on the amounts of overpayments incurred, 

collected, and waived or otherwise written off for fiscal years 2006 

through 2015. We also obtained data on existing DI overpayments and 

repayment plan amounts as of September 30, 2015. We used these data

to determine the number and amount of overpayments owed to SSA, and 

to estimate the length of benefit withholding plans to repay these debts, 

which were in effect as of that date. We also used these data to calculate 

the effect on scheduled repayments if SSA were to implement additional 

debt collection methods. We assessed the reliability of these data by 

checking for implausible values and by comparing the data to figures 

publicly reported by SSA. We found these data to be sufficiently reliable 

for our purposes. To provide additional insight on how SSA documents 

and determines how much beneficiaries can repay on overpayment 

debts, we reviewed a non-representative sample of 16 overpayment 

cases. We selected cases to reflect a range of amounts based on the 

amount of the original overpayment and the percentage of beneficiaries’

monthly benefits withheld to repay debts. We then selected a random 

sample of these subsets of cases for review.

To examine SSA’s use of civil monetary penalties and administrative 

sanctions, we examined available data from SSA and SSA’s Office of the 

Inspector General (OIG), and reviewed recent SSA evaluations of its 

sanctions procedures. After discussing SSA’s procedures for collecting 

and tracking penalties and sanctions, we determined that available data 

on their disposition were not sufficiently reliable for our purposes. We also 

interviewed officials responsible for overseeing sanctions in three of 

SSA’s regional offices. We selected these regions (Atlanta, Chicago, and 

San Francisco) based on variations in their sanctions workloads and error 

rates. We also spoke to staff in the New York regional office, which 

developed a database for tracking sanctions. We assessed SSA’s efforts 

against Federal Internal Control Standards and GAO’s Framework for 

Managing Fraud Risks in Federal Programs. To provide additional views 

and perspectives, we interviewed representatives from a network of 

disability advocates and an organization that represents SSA field office 

managers. We also reviewed relevant federal laws and regulations, and 

SSA program documentation, including policies, procedures, and 
Page 3 GAO-16-331 Disability Insurance

performance plans, as well as reports from SSA and SSA’s OIG.

Additional information on our scope and methodology is provided in 

appendix I.

We conducted this performance audit from November 2014 to April 2016 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

SSA’s DI program provides cash benefits to individuals with disabilities, 

and paid $144 billion to 10.8 million beneficiaries and their families in 

fiscal year 2015. Individuals are generally considered to have a disability

if (1) they cannot perform work that they did before and cannot adjust to 

other work because of their medical condition(s); and (2) their disability 

has lasted or is expected to last at least 1 year, or is expected to result in 

death. Further, individuals must have worked and paid into the program 

for a minimum period of time to qualify for DI benefits.4

DI overpayments occur when beneficiaries are paid more than they 

should be for a given period of time.5 We previously found that more than 

half of all DI overpayments are paid to beneficiaries earning above 

program limits.6 Overpayments may also result if SSA does not cease 

 4

Individuals must have earned sufficient quarters of coverage (also referred to as “work 

credits”) in order to qualify for DI benefits, which they do by working and paying Social 

Security taxes. Individuals may earn up to four work credits per year, and the amount of 

earnings needed for a credit generally changes each year. In 2016, $1,260 in earnings 

was needed for each credit. The number of work credits needed to qualify for DI benefits 

depends on the age of the claimant. Generally, individuals 31 and older need 40 work 

credits to qualify, 20 of which must have been earned in the 10 years prior to becoming 

disabled. Younger individuals may qualify with fewer credits.

5

Unless specifically noted, we limited our review to the types of overpayments that SSA 

reports publicly, such as in the Treasury Report on Receivables (TROR).

6

To be eligible for DI, an individual must generally be unable to engage in substantial 

gainful activity (SGA). The SGA monthly earnings limit in 2016 is $1,130 ($1,820 for blind 

individuals). We previously determined that more than half of the amount of overpayments 

during fiscal years 2005 through 2014 were as a result of individuals earning above these 

amounts. GAO-16-34.

Background

DI Overpayments
Page 4 GAO-16-331 Disability Insurance

benefit payments when notified by a beneficiary of a change in work 

status, when inaccurate information and administrative errors lead to 

incorrectly calculated benefits, or as the result of individuals knowingly 

misleading the agency or committing fraud. As of September 30, 2015, 

approximately 637,000 individuals owed about $6.3 billion to SSA in DI 

overpayment debt.7

SSA will seek repayment of most overpaid benefits after pursuing various 

procedural steps. Specifically, when SSA detects an overpayment, it 

requests a full immediate refund, unless the overpayment can be withheld 

from the beneficiary’s next monthly benefit. SSA also notifies the overpaid 

person that they may request reconsideration, a waiver, or both. A 

beneficiary requests reconsideration when he or she disputes that an 

overpayment occurred or the amount of the overpayment, and requests a 

waiver when asserting that he or she is neither responsible for the 

overpayment nor capable of repaying it. SSA may grant a waiver request 

if it finds that the beneficiary was not at fault for the overpayment and that 

recovering the overpayment would defeat the purpose of the program or 

be against good conscience and equity.8 A waiver permanently 

terminates collection of a debt.

If SSA denies a reconsideration, a waiver, or both, the agency will request 

full repayment. SSA will attempt to withhold SSA benefits from the 

beneficiary to immediately recoup the full amount. If the individual is not 

receiving SSA benefits at the time or is unable to immediately pay the full 

amount owed, the agency generally requests a repayment plan. This may 

take the form of voluntary remittances or withholding from monthly SSA 

benefits. These withholdings may be taken from DI or other SSA benefits 

being received, such as Supplemental Security Income (SSI)9 benefits.10

Withholding from other SSA benefits is known as cross-program 

recovery. SSA policy is to obtain repayment within 36 months, but it may 

approve longer repayment periods after reviewing an individual’s income, 

expenses, and assets. SSA regulations require a minimum monthly DI 

 7

These figures are based on calculations we made from SSA data on DI overpayments.

8

See 42 U.S.C. § 404(b), 20 C.F.R. § 404.506.

9

SSI is a means-tested program designed to help aged, blind, and disabled people, who 

have little or no income.

10See, e.g., 31 U.S.C. § 3716(c) and 42 U.S.C. § 1320b-17.
Page 5 GAO-16-331 Disability Insurance

withholding of $10, an amount that has not changed since 1960 according 

to SSA.11

SSA’s policy is to stop its collection activities and temporarily write off a 

debt if it meets at least one of these criteria: the debtor cannot or will not 

repay the debt,12 the debtor cannot be located after a diligent search, the 

cost of collection actions is likely to exceed the amount recovered,13 or 

the debt is at least two years delinquent. (SSA may refer to such debt 

write-offs as terminating or conditionally writing off debts.) Temporarily 

writing off debts conditionally removes them from SSA’s accounts 

receivable balance, although SSA will refer debts to Treasury for 

collection through external tools. Prior to referring debts to Treasury, SSA 

notifies debtors and informs them of the appeal rights. SSA will reestablish these debts and its own collection efforts if it receives payment 

through these external collection tools or if the individual becomes reentitled to Social Security benefits. External debt collection tools include

• tax refund offset, which withholds or reduces federal tax refunds to the 

individual;

• federal salary offset, which withholds or reduces wages and payments 

to federal employees;

• administrative offset, which withholds or reduces other federal 

payments (other than tax refunds or salary) to the individual;

• administrative wage garnishment, which garnishes wages and 

payments from private employers or state and local governments; and

• credit bureau referral, which reports delinquent debt to credit bureaus 

and may adversely affect an individual’s credit scores.14

 11See 20 C.F.R. § 404.502(c).

12Factors that SSA takes into account when making this determination include the age 

and health of the debtor, their current and potential income, and inheritance prospects. As 

part of determining whether the debtor cannot or will not repay the debt, SSA’s policy is to 

also determine whether a compromise settlement or civil suit is not likely to be successful. 

13A 2015 SSA Office of Inspector General report concluded that SSA generally attempted 

to recover overpayments regardless of the amount involved, and recommended that SSA 

reevaluate its efforts to recover small overpayments. Social Security Administration, Office 

of the Inspector General, Cost-benefit Analysis of Processing Low-dollar Overpayments, 

A-07-14-14065 (Baltimore, MD: July 1, 2015).

14Although credit bureau reporting does not directly result in collections, the prospect of a 

negative credit report can motivate individuals to repay debts.
Page 6 GAO-16-331 Disability Insurance

Conditionally written-off debts remain subject to collections through any 

available tools until the debt is paid in full or the case is otherwise 

resolved. As of the end of fiscal year 2015, SSA had $1.5 billion dollars of 

overpayments that were conditionally written off. The average amount of 

written-off debt was about $4,100 and more than 75 percent of these 

debts were written off over 5 years ago. About 30 percent of people in 

written-off status were under age 18 when a parent received benefits for 

them and most of these recipients were written off in their late teens or 

twenties.15

The amount of outstanding DI overpayments increased by 70 percent 

between fiscal years 2006 and 2015, with the amount of debt newly 

detected and reestablished exceeding the amount collected, waived, or 

conditionally written off in 9 of the last 10 years.16 Moreover, while 

collections of prior debt have seen some increases over the past 10 

years, they have not kept pace with new debt established (see fig. 1).

 15The data GAO reviewed indicated that about 43 percent of the beneficiaries in 

conditionally written off status were deceased according to SSA; however, these data 

were insufficient to rule out the possibility that there were living recipients (such as a 

spouse or dependent) receiving benefits on the deceased beneficiary’s earning record in 

conditionally written off status. 

16GAO previously found that cumulative DI overpayment debt reported by SSA is 

understated due to a limitation in its Recovery of Overpayments, Accounting and 

Reporting (ROAR) system. Used to track overpayments and collections, ROAR cannot 

capture and track debt scheduled to be collected beyond the year 2049. As a result, the 

portion of debt owed that is scheduled to be collected after that year is not reflected in 

current totals even as it annually increases. GAO recommended that SSA take steps to 

correct this shortcoming. SSA agreed with this recommendation and has acknowledged 

this reporting limitation in its Agency Financial Report.
Page 7 GAO-16-331 Disability Insurance

Figure 1: Overpayment Debt Established and Collected from Social Security 

Disability Insurance Beneficiaries, Fiscal Years 2006-2015

Note: Debt established includes old debts that have been reestablished. This figure does not include 

debts that have been waived.

SSA can take several actions against individuals who knowingly mislead 

SSA or make false statements to obtain benefits, and these actions serve 

as deterrents against potential fraud and abuse. Allegations of suspected 

wrongdoing are referred to SSA’s OIG by SSA staff or the public.17 OIG 

will assess each allegation received to determine whether they warrant 

investigation. According to SSA, those opened for investigation must be 

referred to the Department of Justice (DOJ) under the U.S. Attorney of 

jurisdiction any time OIG has grounds to believe there has been a 

criminal violation, as required by the Inspector General Act.

 17SSA noted in its comments that civil monetary penalties and administrative sanctions 

are not findings of fraud. Instead, SSA explained that civil monetary penalties are based 

on, among other things, findings of individuals making false or misleading statements, or 

who knowingly omit or withhold the disclosure of material facts from SSA. Administrative 

sanctions involve individuals who knowingly provide false or misleading information to 

SSA, or omit information material to the payment of benefits.

Civil Monetary Penalties 

and Administrative 

Sanctions
Page 8 GAO-16-331 Disability Insurance

Once DOJ reviews a case for potential civil or criminal action, OIG 

decides to impose civil monetary penalties (penalties) where warranted.

18

Section 1129 of the Social Security Act provides for penalties against 

individuals who make certain false statements, representations, or 

omissions in the context of determinations of initial or continuing 

eligibility.19 Under that section, there are certain factors that must be 

considered when determining the amount of a penalty, which are: the 

nature of the individual’s actions, the circumstances under which the 

actions occurred, the individual’s history of prior offenses, the individual’s 

degree of culpability in the current case, the financial condition of the 

individual, and any other factors that justice may require. OIG officials told 

us that they exercise discretion when deciding which cases to pursue for 

penalties and take into account the age of the individual and the 

availability of OIG resources, among other considerations. A penalty of up 

to $5,000 may be imposed for each false statement or material omission, 

and an additional assessment up to double any payment that was made 

as a result, may be imposed.20 OIG’s Office of Counsel to the Inspector 

General (OCIG) imposes penalties, but subsequently refers penalties 

imposed to SSA’s Office of Operations for collection. According to SSA, 

because penalties result from fraud and misconduct, SSA cannot 

terminate collection or write off the debt without the permission of DOJ. 

Additionally, individuals cannot discharge penalties through bankruptcy.

If OCIG declines to impose a penalty, it will consider whether 

administrative sanctions (sanctions) might be appropriate. If it determines 

that sanctions may be suitable, OCIG will return the case to SSA for 

further consideration.

21 SSA is ultimately responsible for deciding whether 

 18According to OIG, it can also pursue a penalty in cases where DOJ does criminally 

prosecute a case.

1942 U.S.C. § 1320a-8. The Social Security Act also allows SSA to impose penalties 

against people that use certain SSA program words, acronyms, symbols, or emblems in 

advertisements, solicitations, or many other types of communications in a manner that 

conveys the false impression that such items are approved, authorized, or endorsed by 

SSA. 42 U.S.C. § 1320b-10. We excluded such penalties from the scope of this review.

20According to OCIG officials, penalties can be imposed even in cases in which no 

overpayment occurred, such as an individual who commits fraud but was not approved for 

benefits. 

21For example, the statute of limitations for imposing a civil monetary penalty under 

section 1129 is 6 years. According to OCIG officials, OCIG will submit any cases older 

than 6 years for potential administrative sanctions, which are not subject to a statute of 

limitations.
Page 9 GAO-16-331 Disability Insurance

sanctions are imposed in each case. If it imposes sanctions, the 

sanctioned individual will not receive benefit payments that he or she 

would have been entitled to for the duration of the sanction period: 6 

months for a first occurrence, 12 months for a second occurrence, and 24 

months for any subsequent occurrences.

In fiscal year 2015, SSA identified about $1.2 billion in new DI 

overpayment debt22 and recovered about $857 million, of which 78 

percent was collected by withholding some or all of beneficiaries’ monthly 

benefits (see fig. 2). SSA officials told us benefit withholding is their most 

effective tool for recovering overpayments and that collecting 

overpayments from individuals who no longer receive benefits can be 

difficult as these individuals may lack tax refunds or other federal and 

state payments to offset. Nonetheless, while withholding accounts for the 

bulk of collections, individuals repaying in this way make up less than half 

of people who have DI overpayment debt. Specifically, those repaying 

through benefit withholding represent about 311,000 of 637,000 people 

with DI overpayment debt.

 22This amount was reported in SSA’s 2015 4th quarter Treasury Report on Receivables.

SSA Is Missing 

Opportunities to 

Improve Recovery of 

Disability Insurance 

Overpayments

SSA Relies on Withholding 

Benefits to Recover Most 

Overpayments
Page 10 GAO-16-331 Disability Insurance

Figure 2: SSA Disability Insurance Overpayments Recovered, by Method Used, Fiscal Year 2015

Note: Although credit bureau reporting does not directly result in collections, the prospect of a 

negative credit report can motivate individuals to repay debts. SSA attributes collections to credit 

reporting if debts are collected after this action.

a The Treasury Offset Program includes tax refund offset, administrative offset, and federal salary 

offset.

Benefit withholding plans, in which SSA withholds a specified amount of 

an individual’s benefits each month, often reflect lengthy repayment 

periods. We estimated the length of time needed to complete repayment 

for overpayments being collected in this way at the end fiscal year 2015 

(see fig. 3)23 and found that over 50 percent of plans will take more than 3 

years to complete. In addition, about 44,000, or 1 in 7 withholding plans 

are scheduled to be completed after the beneficiary’s 80th birthday. Given 

the age at which these beneficiaries are scheduled to complete repaying 

their debts, it is possible that many individuals will die before completing 

repayment. Moreover, individuals with the longest repayment periods 

account for a disproportionately large share of outstanding overpayment 

debt. For example, about 10 percent of individuals with withholding plans 

are scheduled to take over 30 years to repay their debts, but account for 

 23We analyzed overpayments outstanding as of September 30, 2015 by beneficiary. 

Most Withholding Plans 

Exceed 3 Years
Page 11 GAO-16-331 Disability Insurance

nearly a quarter of the outstanding debt to be recouped through 

withholding.

Figure 3: Estimated Time to Fully Recover Disability Insurance Overpayment Debts through Benefit Withholding (for Debts 

Outstanding at the End of Fiscal Year 2015)

We also found that over a third of withholding amounts were less than 

$50 and over half were less than $100 (see fig. 4). The median amount of 

monthly benefits being withheld from beneficiaries’ DI benefits to repay 

prior overpayments was $57. In addition, many withholding amounts 

represented a small percentage of recipients’ monthly benefits. About 

two-thirds of withholding amounts were less than 10 percent of 

beneficiaries’ monthly benefit (see fig. 5). SSA withheld a median of less 

than 8 percent of individuals’ monthly benefits for repayment.24

 24SSA withholds under 15 percent of benefits from a large majority of beneficiaries with 

overpayment debt, but sometimes withholds almost all benefits, which means that the 

average withholding level is considerably larger than the typical withholding level. We 

report medians to offer a better sense of SSA’s typical action. For additional details on our 

methods and analysis, including means, see appendix II.
Page 12 GAO-16-331 Disability Insurance

Figure 4: Monthly Benefits Withheld from Beneficiaries to Recover Disability 

Insurance Overpayments (End of Fiscal Year 2015)

Figure 5: Percentage of Monthly Benefits Withheld to Recover Disability Insurance 

Overpayments (End of Fiscal Year 2015)
Page 13 GAO-16-331 Disability Insurance

We also found, when we looked at data from the end of fiscal year 2015, 

that individuals with lower benefits had a larger share of their monthly 

benefits withheld for an overpayment debt (see appendix II, figures 7 and 

8). For example, the median withholding level for those in the lowest 

quartile of monthly benefits was 10 percent, while for those in the highest 

quartile of monthly benefit, the median was 6.2 percent.25 Appendix II 

provides additional information on overpayments and withholding 

amounts and rates.

Despite SSA’s heavy reliance on withholding benefits to recover debt, we 

found gaps in SSA’s guidance, oversight, and verification of information 

related to establishing withholding plans. The importance of determining 

and collecting an appropriate amount of debt from individuals is laid out in 

federal standards. The Federal Claims Collection Standards indicate 

agencies need to aggressively collect all debts arising out of activities of 

that agency, and that the size and frequencies of installment payments 

should bear a reasonable relation to the size of the debt and the debtor’s 

ability to pay. When pursuing debt, it is important for SSA to balance 

collection efforts against not placing too high a burden on an individual 

repaying a debt, and for SSA to have policies and procedures in place 

that ensure staff consistently make decisions on debt recovery that 

balance these opposing goals. However, as described below, SSA policy 

for determining reasonable beneficiary expenses is ambiguous, 

repayment plans are not subject to review or oversight, and beneficiaries’

self-reported financial information is not independently verified. In the 

absence of these elements, SSA cannot reasonably ensure that 

repayment amounts and time frames determined by its staff are 

appropriate and set in accordance with best practices and agency policy.

SSA’s policies for how to consider beneficiaries’ expenses when 

determining benefit repayment amounts are ambiguous and leave much 

to the judgment of staff. Federal Internal Control Standards indicate that 

agencies’ policies and procedures should be clearly documented in 

administrative policies or operational manuals.26 According to SSA policy, 

 25The lowest quartile consists of people receiving up to $706 per month and a mean of 

$377 per month, while the top quartile consists of people receiving at least $1,243 per 

month and a mean of $1,609 per month.

26GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1. 

(Washington, D.C.: November 1, 1999).

Gaps Exist in SSA’s 

Guidance, Oversight, and 

Verification of Information 

Related to Withholding 

Plans

Policies for Determining 

Appropriate Expenses
Page 14 GAO-16-331 Disability Insurance

staff are to obtain an SSA form 632 documenting financial information, 

including income and expenses, from a beneficiary to determine his or 

her ability to repay an overpayment when the beneficiary requests a 

repayment period exceeding 36 months.27 In these cases, SSA policy 

generally directs staff to withhold the amount by which an individual’s 

income exceeds expenses, or the rate permitted by income or assets if 

there are excess assets, and notes that this amount should generally not 

be less than $10 per month. However, a recent report prepared for SSA 

by an external auditor found that the agency has contradictory policies for 

determining what reasonable expenses are for beneficiaries. SSA’s policy 

states that a person’s particular circumstances and lifestyle determine 

whether expenses are ordinary and necessary, and that patterns of living 

are established over time and these patterns must be considered when 

evaluating the facts. At the same time, SSA policy also directs staff to not 

allow extraordinary and unnecessary expenses, regardless of the 

person’s standard of living. The report noted that these conflicting 

statements can lead to confusion when determining a feasible repayment 

rate. In contrast, the Internal Revenue Service provides detailed guidance 

on allowable living expenses when determining taxpayers’ ability to repay 

a delinquent tax liability. Its Collection Financial Standards include 

national guidelines for the cost of food, clothing, and other items and local 

standards for housing, utilities, and transportation costs. In the absence of 

clear guidance, SSA staff may struggle to determine what a beneficiary 

can reasonably afford to repay and could lead to inconsistencies across 

different repayment plans.

SSA lacks effective oversight to know whether these plans are being 

consistently or appropriately administered. Federal Internal Control 

Standards indicate that key duties and responsibilities need to be divided 

among different individuals to reduce the risk of errors, and this should 

include separating responsibilities for authorizing, processing, recording, 

and reviewing transactions. In 2011, we reported that SSA staff are not 

required to obtain supervisory review of repayment plans, and 

recommended that SSA require supervisory review of repayment plans 

that extend beyond 36 months—the point at which SSA staff are directed 

to evaluate an individual’s ability to repay based on income, assets, and 

expenses. The agency disagreed with our recommendation and has not 

 27While SSA policy requires this information be requested for all plans where repayment is 

less than full benefit withholding, staff are only directed to obtain a form 632 documenting 

the beneficiaries finances for repayment plans exceeding 36 months.

Oversight and Documentation 

of Repayment Plans
Page 15 GAO-16-331 Disability Insurance

taken any action to implement it. In the course of our current review, SSA 

maintained that reviewing withholding plans would not increase recovery 

of overpayments, but the agency did not provide any analyses or studies 

to support its position.28 We continue to believe that supervisory review is 

an important part of ensuring that staff create appropriate repayment 

plans.

In addition to lacking supervisory review, SSA also has not performed 

targeted reviews of repayment plans for adherence to policy, even though 

the agency systematically samples cases to review other aspects of DI 

overpayment decision making through its Continuous Quality Area 

Director Reviews,29 such as whether waiver decisions are properly 

documented. Without oversight provided by either supervisory or quality 

assurance reviews, the consistency and appropriateness of repayment 

amounts cannot be known.

While oversight over repayment plans is lacking, any efforts to provide 

oversight could be hampered by a lack of documentation. Federal Internal 

Control Standards state that all transactions and other significant events 

need to be clearly documented, and that the documentation should be 

readily available for examination.30 SSA policy directs staff to obtain 

information and supporting documentation of the beneficiary’s income, 

assets, and expenses. This information should be documented by the 

beneficiary on a form 632 worksheet. Although SSA policy directs staff to 

retain copies of all supporting documentation (including bills and bank 

statements) for individuals whose overpayment is $75,000 or more, SSA 

policy does not explicitly require that supporting documentation—

including the form 632 worksheet—be retained for lesser overpayment 

amounts. Since the median overpayment balance was about $3,200 at 

the end of fiscal year 2015, an audit trail for conducting oversight may not 

exist for many repayment plans. Our review of a small sample of 

 28GAO-11-724. While SSA disagreed with our recommendation, it did remind staff to 

follow its policy of collecting overpayments within 36 months if possible.

29The Continuous Quality Area Director Review process provides SSA with a national 

approach to improving the accuracy of work performed in its field offices. In fiscal year 

2014, the process used a web-based tool to complete targeted reviews of error-prone 

workloads.

30Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999).
Page 16 GAO-16-331 Disability Insurance

overpayment case files—with overpayment amounts ranging from about 

$3,000 to about $165,000—raised questions about the sufficiency of 

documentation. Our non-representative sample of 16 cases was of 

overpayments being repaid through benefit withholding and with 

repayment periods exceeding 36 months.31 In 4 cases the overpayment 

was over $75,000 and retention of supporting documentation, such as 

mortgage statements, bills, or pay stubs, is directed by SSA policy; 

however, only 2 had any documentation verifying income or expenses. 

Further, in 3 of 8 cases in which beneficiaries were directed to complete a 

form 632—the worksheet used by the beneficiary to request a repayment 

period exceeding 36 months and to document relevant financial 

information—we found no evidence in the file that the form was 

completed. Ultimately, not requiring documentation to be retained for the 

record for all plans precludes the agency from reviewing the accuracy of 

repayment amounts in any future review.

SSA may be missing opportunities to verify self-reported financial 

information, and therefore individuals’ ability to repay overpayments. 

Federal Claims Collection Standards state that agencies should obtain 

financial statements from debtors who represent that they are unable to 

pay in one lump sum and independently verify such representations 

whenever possible.32 Further, GAO’s Framework for Managing Fraud 

Risks in Federal Programs states that managers should take steps to 

verify self-reported data to effectively prevent and detect instances of 

potential fraud.33 While SSA policy directs staff to collect evidence (such 

as bank statements or bills) to corroborate self-reported financial 

 31Of the 16 cases we reviewed, we determined that in only 8 cases should the beneficiary 

have submitted a form 632 and, of the 8, only in 4 was SSA directed to obtain and retain 

documentation because the overpayment exceeded $75,000. We determined that for the 

other 8 cases, a form 632 was not necessary because either: the individual was having 

100 percent of their benefit withheld, the full repayment was expected to occur within 36 

months or the individual was also receiving SSI benefits which generally result in 

withholding 10 percent of an individual’s monthly DI benefit.

3231 C.F.R. § 901.8(a).

33GAO, A Framework for Managing Fraud Risks in Federal Programs. GAO-15-593SP 

(Washington, D.C.: July 28, 2015).

Verifying Self-Reported 

Information
Page 17 GAO-16-331 Disability Insurance

information from some beneficiaries,34 the agency may be able to more 

efficiently and effectively validate self-reported information by other 

means that SSA already is leveraging for other purposes. For example, 

SSA is already using the Department of Health and Human Services’

National Directory of New Hires (NDNH)35 to determine an individual’s 

initial and continued eligibility for DI and SSI benefits. The value of this 

database was further demonstrated in March 2014 when SSA initiated the 

Quarterly Earnings Pilot to systematically identify and contact DI 

beneficiaries before their earnings cause them to accumulate large

overpayments.36 According to SSA, the project identified 278 cases for 

contact using these data about 10 months earlier than it presumably 

would have identified them using old procedures and methods, 

uncovering about $3 million in overpayments. Nevertheless, SSA officials 

told us the agency has not studied the feasibility of using NDNH to verify 

income information from individuals seeking to establish withholding 

plans. Similarly, since 2011, SSA has used an automated process, 

Access to Financial Institutions (AFI), to verify Supplemental Security 

Income (SSI) applicants’ bank balances and detect undisclosed accounts. 

In November 2015, legislation was enacted that requires individuals to 

authorize SSA to access their financial information when deciding 

whether to waive their overpayments under certain circumstances.37

Although SSA uses the same form to collect self-reported information for 

overpayment waiver decisions and withholding plans, according to SSA 

officials, the agency has not yet determined whether this recent legislation 

allows it to use AFI for verifying withholding plans that extend beyond 36 

months. Using information sources, like AFI and NDNH, to verify financial 

information provided by beneficiaries can help SSA ensure that it is 

collecting no more or no less than an individual can afford to pay.

 34While SSA policy directs staff to collect documentation to corroborate self-reported 

information, as noted earlier SSA only directs such documentation to be retained in the file 

if the overpayment amount is $75,000 or more. Since most overpayments are lower than 

$75,000, it would be difficult for SSA or an auditor to determine the extent to which staff 

are collecting this documentation in accordance with SSA’s policy. 

35This database contains wage data that is updated more frequently than SSA’s Master 

Earnings File (MEF). NDNH contains quarterly data, whereas MEF contains annual wage 

data.

36The Quarterly Earnings Pilot was focused on individuals participating in SSA’s Ticket-toWork and Self-Sufficiency program, whose participants include DI beneficiaries. 

37Pub. L. No. 114-74, § 834, 129 Stat. 584, 614.
Page 18 GAO-16-331 Disability Insurance

SSA reports that it has or is taking several steps to improve the collection 

of delinquent DI overpayment debt. These include:

• Modernizing the External Collection Operation (ECO) system: The 

ECO system identifies beneficiaries with delinquent debt and refers 

them to Treasury for external collection, using tools such as wage 

garnishment and tax refund offset. Currently, due to a system 

limitation, if a debtor has multiple debts, all of the debts must meet the 

criteria for referral to Treasury. If one debt is not eligible for referral—

for instance if an individual is requesting that a debt be waived—none 

of the debts will be referred. According to SSA officials, as part of its 

Overpayment Redesign initiative, SSA plans to address this limitation 

by changing the way in which ECO stores debts to be able to select 

debts on an individual level as opposed to the aggregate beneficiary 

record level. This update should allow Treasury to use external 

collection tools against more debtors and potentially increase the 

amount of overpayments recovered through these tools.

• State Reciprocal Program: Under the State Reciprocal Program 

(SRP), managed by the Treasury as part of the Treasury Offset 

Program, the federal government enters into reciprocal agreements 

with states to collect debts by offsetting state payments due to 

debtors, such as state income tax refunds. This program provides 

SSA with an additional avenue to recover overpayments from 

delinquent debtors and may increase overall debt recovery. SSA 

published regulations in October 2011 and modified its systems to 

begin accepting offsets of state payments in 2013. According to SSA 

officials, SSA is dependent upon Treasury, who enters into reciprocal 

agreements with states, to expand the SRP to additional states.38

• Address Verification Project: Implemented in February 2015, SSA’s 

Address Verification Project is expected to improve its ability to notify 

individuals with delinquent debt before referring them to external 

collection. Prior to implementation, SSA relied on the addresses in its 

records when notifying debtors of their delinquent debt. If the United 

States Postal Service returned the notice, SSA would cease collection 

activity, and use a contractor to obtain a current address to re-notify 

the debtor. It now obtains a current address from the contractor prior 

to mailing the notice to ensure it has current address information.

 38As of fiscal year 2014, seven states and the District of Columbia participated in SRP.

SSA Is Taking Steps to 

Improve Debt Collection, 

but Lacks Plans for Using 

Additional Promising 

Collection Tools
Page 19 GAO-16-331 Disability Insurance

SSA and GAO identified several additional options that could increase its 

overpayment recoveries. Officials told us that one change they are 

considering is to make the minimum monthly withholding amount 10 

percent of an individual’s monthly benefit instead of the current $10 

minimum, but SSA is in the early stages of studying this option and does 

not yet have time frames for implementing such a change.39 The agency 

noted that this could help minimize the number of long-term repayment 

plans and would put DI collections more in line with its SSI program.40

Beyond this, we identified two additional options based on past GAO work 

or conversation with SSA.41

• Adjusting monthly benefit withholding according to cost of living 

adjustments (COLA): In 1996, we recommended that SSA adjust its 

monthly withholding amounts so that they keep pace with any annual 

increases in benefits.42 This option would accelerate overpayment 

recoveries with only minimal effect on recipients’ monthly benefits.

• Charging interest on debt: SSA officials told us that they have the 

authority to charge interest on delinquent overpayment debt43 and 

would like to be able to do so, but that they have not done so due to 

 39In its comments, SSA noted that it developed a legislative proposal to change the 

minimum withholding rate to 10 percent of monthly benefits. A summary of this proposal 

was included in the agency’s fiscal year 2017 budget submission.

40The rate of adjustment of SSI benefits to recover SSI overpayments is generally the 

lesser of 10 percent of the recipient’s total monthly income (countable income plus SSI 

and State supplementary payments), or the recipient’s entire monthly benefit. See 20 

C.F.R. §§ 416.570, 416.571.

41We did not conduct an exhaustive review of potential options for improving debt 

recovery; as a result, there may be potential options that were not included in our analysis.

42DI benefits are generally adjusted each year to reflect changes in the cost of living. One 

option for increasing recoveries is to adjust benefit withholding by the same percentage 

that benefits are adjusted annually to account for inflation. GAO, SSA Overpayment 

Recovery, GAO/HEHS-96-104R. (Washington, D.C.: Apr. 30, 1996).

43For the purposes of charging interest on overpayment debt, a number of criteria need to 

be met for it to be considered delinquent. Among others, these criteria include: the 

overpaid individual is no longer entitled to benefits under title II of the Social Security Act; 

SSA has not entered into an installment payment agreement with the individual, or if SSA

has entered into such an arrangement, the overpaid individual has failed to make any 

payment for 2 consecutive months; and, the overpaid individual has not requested 

reconsideration of the initial overpayment determination, or if after review, SSA affirms, in 

whole or in part, the initial overpayment determination. For additional information, see 42 

U.S.C. § 404(f) and 20 C.F.R. § 404.527.
Page 20 GAO-16-331 Disability Insurance

resource constraints and competing priorities. With respect to debts 

that are in the process of being repaid, such as through benefit 

withholding, SSA has determined that it does not have the authority to 

charge interest. As we discuss below, however, charging interest on 

debt that is being repaid could help protect the value of overpayments 

against the effects of inflation, especially over longer repayment 

periods.

However, SSA lacks concrete plans and timeframes for studying and 

implementing these options or any other collection tools beyond those

already in place, and SSA officials told us the agency currently has more 

pressing priorities than expanding its DI debt recovery tools. Federal 

Claims Collection Standards state that federal agencies shall 

aggressively collect all debts arising out of activities of, or referred or 

transferred for collection services to, that agency. Further, collection 

activities shall be undertaken promptly with follow-up action taken as 

necessary.

Our analysis of the options we examined show that they hold promise for 

increasing SSA’s recovery of DI overpayments. We reviewed 

overpayments as of September 30, 2015 that were being repaid through 

benefits withholding, and determined how existing scheduled benefit 

withholding amounts would be affected by: (1) making the minimum 

withholding amount 10 percent of monthly DI benefits, (2) adjusting 

withholding amounts according to annual COLAs, and (3) charging 

interest on debts being collected through withholding. We took 

outstanding debts and withholding levels and computed the repayment 

schedule under the status quo and each alternative option. By definition, 

repayment schedules do not account for future changes such as 

individuals who gain or lose eligibility for benefits or whose ability to repay 

changes. Changes such as those mean that actual collections differ from 

scheduled collections. Options that increase withholding will speed 

recovery and reduce the effects of attrition, while charging interest will 

delay the completion of repayment and magnify the effects of attrition.

Nonetheless, these options—implemented alone or in combination—have 

the potential to significantly increase collections of overpayment debt.

Of the options we examined, setting a minimum withholding amount equal 

to 10 percent of an individual’s monthly DI benefit has the greatest 

potential to increase scheduled collections and reduce the amount of time 

to fully recover overpayments. We estimate this option would increase 

scheduled collections by $276 million over 5 years and reduce the 

median scheduled time to fully recover all beneficiary overpayments from 
Page 21 GAO-16-331 Disability Insurance

3.4 years to 2.3 years. Further, those beneficiaries scheduled to take over 

20 years to complete repayment would decrease from 17 percent to 4 

percent.44 Figure 6 below provides additional information on the effect of 

this scenario on scheduled repayment times. The increase in collections 

under this scenario comes entirely from individuals currently having less 

than 10 percent of their benefits withheld, and as such, the changes 

within this portion of the population are more pronounced when examined 

separately. Among those beneficiaries, the median scheduled repayment 

time would decrease by over half, from 5.9 to 2.5 years.

Figure 6: Years to Full Disability Insurance (DI) Overpayment Recovery—Current Benefit Withholding versus Withholding a 

Minimum of 10 Percent of Monthly Benefits—for All Beneficiaries Having Benefits Withheld as of September 30, 2015

Increasing the minimum withholding rate to 10 percent of monthly benefits 

could also be implemented in a way that improves collections while 

sparing or minimizing the effect on beneficiaries receiving the lowest 

monthly benefits. We estimate that only about 5 percent of the increase in 

collections would come from the quartile of beneficiaries receiving the 

lowest monthly benefits, in part because they already have a 

disproportionately larger amount of benefits withheld, and in part because 

increasing the withholding rate recovers much less dollar-wise from those 

receiving lower monthly benefit levels than those with higher benefits.

 44We did not estimate how many current beneficiaries may no longer be eligible for 

benefits and benefit withholding in the future.
Page 22 GAO-16-331 Disability Insurance

We estimate that adjusting monthly withholding amounts according to 

COLAs or charging interest on overpayment debt would have a smaller 

effect than changing the minimum withholding rate to 10 percent of 

monthly benefits (see table 1), but could help protect the DI trust fund 

from the effects of inflation. For example, if SSA overpaid a dollar in 1985 

and the beneficiary repaid that dollar 30 years later in 2015, the 

recovered dollar would have only 45 percent of the buying power of the 

1985 dollar. Similarly, if SSA overpaid a dollar in 2010 and recovered it in 

2015, the repaid dollar would have only about 92 percent of the buying 

power of the dollar SSA overpaid. Given that many withholding plans 

extend for decades, the effect of inflation can be significant. Charging 

interest on outstanding overpayment balances at the rate of inflation 

would counteract the effect of inflation and give repaid dollars the same 

buying power they had when erroneously paid years earlier. Other 

agencies already charge debtors interest. For instance, the Internal 

Revenue Service charges individuals with delinquent tax debt interest at a 

rate that is adjusted quarterly and is based on the federal short-term 

interest rate. Similarly, adjusting monthly withholding amounts according 

to COLA increases could help accelerate repayments and thus help 

negate the effect of inflation on amounts repaid to the DI Trust Fund.

Implementing any combinations of the options we examined could result 

in even higher scheduled collections. For instance, setting a minimum 

withholding rate of 10 percent of monthly DI benefits and charging an 

interest rate of 1 percent would increase scheduled collections by $287 

million over the next 5 years, while these options implemented individually 

would be scheduled to bring in $276 million and $7 million respectively.
Page 23 GAO-16-331 Disability Insurance

Table 1: Potential Increases to Scheduled Disability Insurance Overpayment Collections for Fiscal Years 2016-2020 Achieved 

by Adjusting Existing Withholding Plans

In 2016 dollars

Annual inflation rate assumptiona

No inflation 2.0% 2.7% 3.4% 

No adjustment (baseline collections) $1.04 bil. $1.00 bil. $0.98 bil. $0.97 bil.

Options for adjusting withholding plans Potential increases to collections

Collections with a minimum withholding rate of 10% of DI benefitsb $276 mil. $288 mil. $292 mil. $296 mil.

Only including COLA — $29 mil. $38 mil. $47 mil.

Charging interest on overpayment amountsc $7 mil. $14 mil. $18 mil. $23 mil.

COLA and charging interest on overpayment amountsc $7 mil. $44 mil. $58 mil. $72 mil.

Collections with a minimum withholding rate of 10% of DI benefits, COLA and 

charging interest on overpayment amountsc $287 mil. $320 mil. $334 mil. $348 mil.

Source: GAO analysis of SSA data on DI overpayments and debt recovery. | GAO-16-331

Note: Amounts shown in the table reflect increases to scheduled collections by adjusting withholding 

amounts on overpayments being recovered through benefits withholding as of September 30, 2015. 

Our analysis does not take into account changes that would affect this population in the future, such 

as individuals who become ineligible for benefits and no longer repay overpayments through benefits 

withholding. It also does not account for current debtors who may start repaying through benefits 

withholding, individuals who may incur an overpayment in the future, or individuals who may make 

adjustments to their withholding plans. Total actual recoveries would thus likely differ from scheduled 

recoveries.

a

Inflation rate assumptions are from the 2015 Annual Social Security Trustee’s report.

b

Under this scenario, we tied the minimum withholding rate of 10 percent of benefits to any estimated 

cost of living adjustment so that the withholding amount would continue to be 10 percent of monthly 

benefits after a benefit increase.

c

SSA does not currently have statutory authority to charge interest on debts that are currently being 

repaid. However, SSA may charge interest on debt that is delinquent. The rate it may charge is equal 

to the average investment rate for the Treasury tax and loan accounts for the 12-month period ending 

on September 30 of each year, and for 2016 the rate is 1 percent. We assumed this 1 percent interest 

rate in the zero inflation scenario, a 2.0 percent interest rate in the 2.0 percent inflation scenario, a 2.7 

percent interest rate in the 2.7 percent inflation scenario, and 3.4 percent interest rate in the 3.4 

percent inflation scenario.
Page 24 GAO-16-331 Disability Insurance

SSA’s OIG has in recent years increased its use of penalties against 

individuals who knowingly mislead the agency, according to SSA’s Office 

of Counsel to the Inspector General (OCIG), which is responsible for 

imposing penalties. According to SSA officials, in fiscal year 2010, OCIG 

successfully resolved 89 cases and imposed penalties totaling 

approximately $3.9 million.45 That increased to 313 cases and more than 

$17.6 million in fiscal year 2015. OCIG officials attribute this increase to 

improving its evaluations process and more management focus on the 

use of penalties as a deterrent.

Increased penalties notwithstanding, officials told us SSA lacks reliable 

data on the status of penalties, how much of penalty amounts have been 

collected, and how much is delinquent. While OCIG imposes penalties on 

individuals, SSA’s Office of Operations is ultimately responsible for 

collecting these amounts. SSA officials said they could not provide us 

with comprehensive data on the number and amount of penalties paid 

because of limitations in their computer systems, and added that they 

would need to review each individual case to determine its repayment 

status. Federal Internal Control Standards indicate that program 

managers need appropriate data to monitor the performance of their 

program and help ensure accountability.46 Without valid data on the 

disposition of penalties, SSA cannot determine whether penalties are 

being used effectively across the agency and if individuals who mislead 

the agency are paying as appropriate. SSA reports that it is planning a 

number of steps to better track imposed penalties, and ultimately the 

 45According to SSA, successfully resolved cases are those that were settled, had a 

favorable judgment, or where a penalty was imposed.

46GAO/AIMD-00-21.3.1.

SSA Lacks Reliable 

Data and Oversight to 

Know Whether 

Penalties and 

Sanctions Are Used 

Effectively

SSA Lacks Reliable Data 

to Track and Tools to 

Collect Penalties
Page 25 GAO-16-331 Disability Insurance

amounts collected as part of a larger effort to improve its processing of 

overpayments and other debts. According to its plans, SSA hopes to: by 

fiscal year 2018, assign penalties a unique transaction code to be able to 

track them through the collection process; and by fiscal year 2020 

unbundle penalties from other debts owed by an individual in its ROAR 

database—which is used to track debts and collections—in order to allow 

remittances to be directly applied to penalties as opposed to an 

individual’s cumulative debt.47 While such improvements could help 

address the limitations we identified, they are a number of years away. 

Further, SSA notes in its plans that they may be subject to delays related 

to resource constraints. Moreover, SSA is still in the process of analyzing 

and planning potential fixes. As such, it is uncertain whether SSA will 

meet its intended time frames or whether its currently planned efforts may 

change and ultimately address the shortcomings it identified.

SSA has met with limited success collecting on imposed penalties, and is 

not using some tools to better ensure that individuals who knowingly 

mislead the agency pay their penalties. Officials said SSA currently only 

collects penalties by either withholding DI or other SSA benefits, or 

relying on individuals to voluntarily remit penalty amounts. A recent OIG 

audit highlighted the difficulty that SSA has in collecting delinquent 

penalties.48 In a sample of 50 penalties imposed between calendar years 

2010 and 2012 totaling $1.9 million, OIG found that about $1.7 million of 

that amount remained uncollected as of July 2014. The majority of that 

amount (approximately $920,000) was associated with individuals not 

receiving benefits and with whom SSA had no ongoing collection 

actions—the same category of individuals who could be targeted with 

external collection tools. While officials noted the agency determined it 

can refer penalties for collection through some external collection tools, 

such as wage garnishment, tax refund offsets, and administrative offsets,

the agency has not utilized them.49 According to officials, SSA drafted a 

 47This might occur, for instance, if an individual is both paying a penalty and repaying an 

overpayment.

48SSA generally considers a debt delinquent when no voluntary payment has been made 

30 days after the latest of the following: the date the debt was established on SSA’s 

ROAR computer system, the date of the last payment, or the date of a denial decision of a 

waiver request or affirmation decision on a reconsideration request.

49Administrative offset withholds or reduces other federal payments to the individual other 

than tax refunds or salary.
Page 26 GAO-16-331 Disability Insurance

regulation for implementing these options; however, the regulation is still 

undergoing internal review and SSA does not yet have time frames for 

implementing these options. Moreover, the agency determined it is 

prohibited by statute from referring delinquent penalties for collection 

through other tools, such as federal salary offset, credit bureau reporting, 

and assessing interest.50 Nevertheless, SSA has not explored pursuing 

legislative authorities to use these tools. By not collecting some 

delinquent penalties and not considering additional tools to do so, SSA 

may be undermining the deterrent value of penalties against potential 

fraud. GAO’s Framework for Managing Fraud Risks in Federal Programs 

indicates that a consistent response to fraud demonstrates that 

management takes this subject seriously, and that the likelihood that 

individuals who engage in fraud will be punished serves to deter others 

from engaging in fraudulent behavior.51

SSA collaborated with OIG to change its sanctions procedures in 2013 in 

an effort to more consistently impose sanctions across the agency. Prior 

to this change, officials told us, SSA field offices had broad discretion to 

impose sanctions. SSA officials told us that some offices were more 

aggressive in pursuing sanctions and that an offense that could result in 

sanctions in one office might not do so in another office. The new 

procedures direct that potential sanctions cases first be evaluated for 

prosecution or civil action by DOJ and then by OIG for the imposition of 

civil monetary penalties. Ultimately, SSA is responsible for determining 

whether to impose sanctions based on the circumstances of the case, 

such as whether evidence exists to show that the individual knowingly 

misled the agency. The relevant SSA field office is responsible for 

developing the documentation to support the sanction, which is then 

reviewed by a sanctions coordinator in the SSA regional office.

Despite changes in decision-making for sanction cases, unreliable data 

and shortcomings in how SSA tracks sanctions prevent the agency from 

reasonably ensuring that sanctions are imposed as appropriate, and 

ultimately prevent SSA from assessing whether its recent procedural 

changes had their desired effect.

 50See 31 U.S.C. § 3701(d).

51GAO, A Framework for Managing Fraud Risks in Federal Programs. GAO-15-593SP 

(Washington, D.C.: July 2015).

SSA Recently Changed Its 

Sanctions Procedures, but 

Weaknesses Persist
Page 27 GAO-16-331 Disability Insurance

• SSA cannot reasonably ensure sanctions are imposed as appropriate:

SSA officials told us that they could not provide us with reliable data 

on the disposition of sanction cases. SSA currently tracks the 

disposition of sanctions in a database, which includes whether 

sanctions were imposed and the sanction period (i.e., the period of 

time during which beneficiaries will not receive benefits). However, 

this database requires SSA staff receiving information on sanctions to 

manually enter information about the sanction into the database, 

which lacks data checks or related oversight and may lead to errors 

and omissions. For instance, officials in three regional offices with 

oversight responsibilities told us that decisions on sanctions cases are 

generally communicated between OIG and the relevant field office. If 

these officials are inadvertently not included on the communications, 

they cannot ensure that the sanctions database is properly updated. 

One regional official said this has resulted in instances in which SSA 

headquarters wanted to know why sanctions were not imposed in 

particular cases, but this official did not have the information to 

respond correctly. Furthermore, officials in two regions noted that 

SSA’s database does not generate alerts when field offices fail to take 

action on potential sanctions cases, thus making it incumbent on 

regional coordinators to manually track and follow up on the status of 

cases. One regional official noted that the lack of tracking resulted in 

several instances in which SSA was pursuing sanctions years after 

the alleged wrongdoing.

• SSA cannot evaluate procedural changes: Beyond the disposition of 

specific sanctions, officials told us that they also lacked reliable data 

on the number of sanctions imposed and whether this number has 

changed since the current procedures were instituted in 2013. This is 

likely a result of the limitations in how sanctions data are captured as 

described earlier. Moreover, SSA conducted an internal assessment 

to determine whether field offices followed correct procedures for 

implementing sanctions. Specifically, SSA selected a sample of cases 

that were originally referred to OIG, and were subsequently returned 

by OCIG to field offices. SSA determined that sanctions were not 

imposed in the majority of cases in which sanctions were likely 

warranted, often because field offices did not take action on cases in 

a timely manner. The study did not determine why the agency failed to 

act on these cases in a timely manner. SSA officials speculated that it 

may be due to the difficulty of imposing harsh punishment on 

beneficiaries and because sanctions are labor intensive for SSA staff.

Federal Internal Control Standards indicate that managers need to 

compare actual performance to planned or expected results and analyze 
Page 28 GAO-16-331 Disability Insurance

significant differences, and that operational data is needed to determine 

whether they are meeting their goals for accountability.52 Furthermore, as 

indicated in GAO’s Framework for Managing Fraud Risk in Federal 

Programs,53 a prompt and consistent response to fraud demonstrates that 

agency management takes reports seriously and serves to deter others 

from engaging in fraudulent behavior. As a result of SSA’s internal 

evaluation, the agency recognized the need to better track sanction 

cases, improve how it communicates decisions, and act on them in a 

timely manner. However, officials said the agency is in the early stages of 

determining how it will address these identified shortcomings, and 

ultimately ensure the deterrent value of sanctions.

More recently, OCIG officials told us that they plan additional changes in 

how OCIG refers cases back to SSA for possible sanctions. According to 

SSA, OCIG will share additional information with SSA that may be helpful 

in SSA’s sanctions determinations. Notwithstanding this change, 

complete and accurate data will still be needed to effectively manage and 

evaluate SSA’s sanctions program.

While overpayments account for a relatively small portion of all DI benefit 

payments, it is incumbent on SSA to collect these debts as a good 

steward of public funds. Improvements in collecting overpayment debt, 

however small, could help strengthen the solvency of the DI trust fund. In 

short, the collection of overpayment debts warrants more attention than 

SSA has demonstrated to date. Absent clear policies and oversight 

procedures for establishing and reviewing withholding plans, which are 

heavily relied on by SSA to recover the bulk of overpayments, SSA 

cannot be sure that beneficiaries are repaying debts in appropriate 

amounts within appropriate time frames. Further, SSA could be collecting 

too little or too much money each month from beneficiaries by not 

leveraging available tools to verify beneficiaries’ ability to pay. By not 

implementing additional debt collection tools that would speed up lengthy 

withholding plans or ensure that the value of collections is not diminished 

by inflation, SSA is missing opportunities to restore debt to the DI trust 

fund. Increasing the minimum monthly withholding amount would promote 

more equity in how SSA deals with overpayments across its programs, 

 52GAO/AIMD-00-21.3.1.

53GAO-15-593SP.

Conclusions
Page 29 GAO-16-331 Disability Insurance

while improvements to procedures and tools for establishing repayment 

plans would better protect those beneficiaries who truly lack resources to 

pay.

As part of its efforts to ensure the integrity of the DI trust fund, penalties 

and sanctions are key tools that the agency needs to use effectively. By 

not using all available tools to collect penalties and by not consistently 

imposing and tracking sanctions, SSA weakens its stance that fraud is 

unacceptable, and its ability to deter other individuals from attempting to 

collect benefits for which they are ineligible.

To ensure effective and appropriate recovery of DI overpayments and 

administration of penalties and sanctions, we recommend the Acting 

Commissioner of the Social Security Administration take the following 8 

actions:

• Clarify its policy for assessing the reasonableness of expenses used

in determining beneficiaries’ repayment amounts to help ensure that

withholding plans are consistently established across the agency and

accurately reflect individuals’ ability to pay.

• Improve oversight of DI benefit withholding agreements to ensure that

they are completed appropriately. This could include requiring

supervisory review of repayment plans or sampling plans as part of a

quality control process, and requiring that supporting documentation

for all withholding plans be retained to enable the agency to perform

such oversight.

• Explore the feasibility of using additional methods to independently

verify financial information provided by beneficiaries to ensure that

complete and reliable information is used when determining

repayment amounts. These additional tools could include those

already being used by the agency for other purposes.

• Adjust the minimum withholding rate to 10 percent of monthly DI

benefits to allow quicker recovery of debt.

Consider adjusting monthly withholding amounts according to cost of

living adjustments or charging interest on debts being collected by

withholding benefits. Should SSA determine that it is necessary to do

so, it could pursue legislative authority to use recovery tools that it is

currently unable to use.

Recommendations for 

Executive Action

•
Page 30 GAO-16-331 Disability Insurance

• Pursue additional debt collection tools for collecting delinquent 

penalties. This includes taking steps to implement tools within its 

existing authority and exploring the use of those not within its 

authority, and seeking legislative authority if necessary.

• Take steps to collect complete, accurate, and timely data on, and 

thereby improve its ability to track both:

• civil monetary penalties and their disposition; and

• administrative sanctions and their disposition.

We provided a draft of this report to the Social Security Administration for 

comment. In its written comments, reproduced in appendix III, SSA 

agreed with 7 of our 8 recommendations and disagreed with 1. SSA also 

raised some broader concerns about the focus of our report. SSA stated 

that our report confuses two distinct issues: recovering overpayments and 

deterring fraud through civil monetary penalties and administrative 

sanctions. We agree that these issues are distinct; however, both are 

important parts of safeguarding the integrity of the DI program, and 

ensuring that payments are made in the right amounts to the right 

individuals. SSA stated that overpayments are not necessarily the result 

of fraud. We agree and note in our report that overpayments occur for a 

number of reasons, including fraud. SSA also stated it believed it was 

misleading to include deterring fraud in the title of our report, noting that 

penalties and sanctions are not themselves findings of fraud, and are 

based on, among other things, findings of false or misleading statements 

or knowing omissions by individuals. We acknowledge this distinction, 

and made revisions in the title and to the report in response to SSA’s 

comments. However, we continue to believe that the consistent use of 

these tools serves as a deterrent against those who would engage in 

fraud or abuse of the DI program. 

SSA agreed with our recommendation to clarify its policies regarding the 

reasonableness of expenses when determining beneficiaries’ repayment 

amounts. SSA noted that it has already taken actions to clarify its policies 

regarding overpayments and waivers, and informed us in its comments 

that it delivered video training to its employees in 2015 on these topics. 

SSA added that it will continue to assess efforts and make other 

improvements to ensure consistent and accurate application of policy. To 

the extent that SSA’s efforts also address unclear written policies, such 

actions could help meet the intent of the recommendation.

Agency Comments 

and Our Evaluation
Page 31 GAO-16-331 Disability Insurance

SSA agreed with our recommendation to improve the oversight of benefit 

withholding plans and said it will explore options to do so. However, it 

disagreed with requiring supervisory review of repayment plans. We 

present supervisory review as just one option for improving oversight, and 

there may be other approaches SSA could explore for improving 

oversight in this area. Nevertheless, we continue to believe that this 

option—recommended in prior GAO work—can be an effective option for 

ensuring that staff create appropriate repayment plans.

SSA agreed with our recommendation to explore the feasibility of using 

additional methods to independently verify financial information provided 

by beneficiaries when determining repayment amounts. 

SSA agreed with our recommendation to adjust the minimum withholding 

rate to 10 percent of monthly DI benefits, and noted that the President’s 

fiscal year 2017 budget submission contains a legislative proposal to do 

so. We acknowledge that SSA recently included a paragraph in its budget 

submission discussing this proposal. SSA may need to work closely with 

Congress to ensure this change is realized.

SSA disagreed with our recommendation to consider adjusting monthly 

withholding amounts according to cost of living adjustments or charging 

interest on debts being collected through withholding benefits. For debt 

subject to benefit withholding, which is not considered delinquent debt, 

SSA asserted that these measures would not have a significant effect on 

the amount of debt recovered, especially compared to the option of 

making the minimum withholding rate 10 percent of monthly benefits. For 

delinquent debt, SSA asserted charging interest on debts would require 

substantial changes to multiple systems that affect its overpayment 

businesses processes, and would require extensive training to its 

employees. While SSA stated it has studied the potential changes 

needed to charge interest on debt, without further consideration of, for 

example, the costs and benefits of charging interest or adjusting 

withholding amounts according to cost of living adjustments, SSA cannot 

know the extent to which these options would improve debt recovery 

efforts or help protect the value of debts against the effects of inflation, 

which can be substantial given that withholding plans can take decades to 

complete. 

SSA agreed with our recommendation to pursue additional tools to collect 

delinquent penalties, and stated that it has begun drafting regulations to 

use existing external debt collection tools, as noted in our report. 

However we state in our report that SSA lacks timeframes for completing 
Page 32 GAO-16-331 Disability Insurance

this action. SSA reported that it is also developing a legislative proposal 

to allow it to use other tools it cannot currently utilize, such as reporting 

these debts to credit bureaus and withholding federal salary payments. 

Such actions, if implemented as intended, could help meet the intent of 

the recommendation.

SSA agreed with our recommendations to improve its ability to track 

penalties and sanctions, and noted that it is developing workload tracking 

tools for both, which it expects to implement in fiscal year 2016, and is in 

the planning stages of an overpayment redesign effort said that should 

result in more complete, accurate, and timely data for penalties. Such 

actions, if implemented as intended, could help meet the intent of the 

recommendations. 

SSA also provided technical comments on our draft that we incorporated 

as appropriate. In particular, SSA noted that our draft report contained 

sensitive information on its sanctions process, which we agreed to 

exclude.

We are sending copies of this report to the appropriate congressional 

committees, the Acting Commissioner of the Social Security 

Administration, and other interested parties. In addition, the report will be 

will be available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (202) 512-7215 or bertonid@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made key contributions to this 

report are listed in appendix IV.

Sincerely yours,

Daniel Bertoni

Director, Education, Workforce and

Income Security
Appendix I: Objectives, Scope, and 

Methodology

Page 33 GAO-16-331 Disability Insurance

In conducting our review of how the Social Security Administration (SSA) 

recovers Disability Insurance (DI) overpayments and oversees civil 

monetary penalties and administrative sanctions, our objectives were to 

examine (1) how and to what extent SSA is recovering DI overpayments, 

and (2) SSA’s procedures for imposing penalties and sanctions, and how 

often they are used. We conducted this performance audit from 

November 2014 to April 2016, in accordance with generally accepted 

government auditing standards. These standards require that we plan 

and perform the audit to obtain sufficient, appropriate evidence to provide 

a reasonable basis for our findings and conclusions based on our audit 

objectives. We believe the evidence obtained provides a reasonable 

basis for our findings and conclusions based on our audit objectives.

To determine how SSA recovers DI overpayments, we reviewed relevant 

federal laws and regulations, and SSA policies and procedures. 

Regarding the extent to which SSA recovers overpayments, we obtained 

available data from SSA on the amounts of overpayments detected, 

waived or written-off, collected, and reestablished between fiscal years 

2006 through 2015, as well as data on the cumulative DI overpayment 

debt balance at the start and end of each fiscal year in that period. We 

also obtained corresponding data on the amount of DI overpayment debt 

recovered through internal and external debt collection tools.

To examine SSA efforts to improve its recovery of overpayments, we 

reviewed agency plans, and publicly available documents such as its 

annual performance plan, and past GAO and Office of Inspector General 

(OIG) reports. We also interviewed SSA headquarters and regional staff 

responsible for overseeing the collection of overpayments. To obtain 

additional insight on SSA’s recovery of DI overpayments, we interviewed 

officials from an organization representing SSA field office managers 

(National Council of Social Security Management Associations) and an 

organization representing advocates for individuals with disabilities 

(National Disability Rights Network).

To gain perspective on how SSA sets and documents overpayment 

repayments plans, we reviewed a non-representative sample of 16 

overpayments being repaid through benefit withholding established in 

fiscal year 2015. We selected a mixture of cases in terms of (1) whether 

the original overpayment amount was over or under $75,000, the 

threshold at which SSA policy requires the retention of documentation 

supporting income and expenses; and (2) whether more or less than 10 

percent of the beneficiaries’ monthly DI benefits were withheld to repay 

Appendix I: Objectives, Scope, and 

Methodology

Recovery of DI 

Overpayments
Appendix I: Objectives, Scope, and 

Methodology

Page 34 GAO-16-331 Disability Insurance

the overpayment. We then randomly selected cases for review from each 

of the 4 subsets of cases that result from applying our two criteria. In 

reviewing these cases, we sought to determine how SSA verified 

beneficiaries’ ability to repay overpayment and how it documented these 

decisions, including reviewing whether SSA retained supporting 

documentation in accordance with its policies. This sample is nonrepresentative and our results are not generalizable to all benefit 

withholding plans.

To examine the extent to which SSA is recovering DI overpayments and 

options for improving collections, we obtained data on DI overpayments 

as of September 30, 2015. The data we obtained came from SSA’s 

Master Beneficiary Record (MBR) and Recovery of Overpayments, 

Accounting and Reporting (ROAR) systems. We limited our data request 

and analysis to those overpayments publicly reported by SSA.

Using these data, we calculated the effect of potential enhancements in 

terms of how much more SSA would be scheduled to collect in fiscal 

years 2016 through 2020, and how much faster SSA would be scheduled 

to recover these overpayments in full. Our estimates are based on 

withholding amounts and overpayments as of the end of fiscal year 2015 

and the assumption that everyone will continue to pay based on the 

current schedule. This implies there will be, for example, no future 

changes in eligibility for benefits, no deaths among people having benefits 

withheld, and no changes in withholding amounts. We also did not 

attempt to estimate future overpayments. As such, actual total collections 

would differ from scheduled total collections. The enhancements we 

discuss below are based on information obtained from SSA or through 

examining past GAO work. We did not conduct an exhaustive review of 

options for improving debt recovery and there may be others that we did 

not consider.

In reporting scheduled repayments for all of our enhancement scenarios, 

we adjusted repayment amounts by four inflation rates: 0, 2.0, 2.7, and 

3.4 percent. This gives the reader a sense of the extent to which each of 

the policy options counteracts the effects of inflation, either by inflationadjusting repayments, or simply speeding up SSA’s recovery of 

overpayments, thereby reducing its exposure to inflation. For each month, 

we then computed the recipient’s remaining balance assuming that the 

recipient repaid either their normal monthly repayment amount or the 

remaining balance, whichever was less. We included the 0 percent 

inflation scenario because it isolates the effects of factors other than 

Analysis of Overpayments 

and Potential Recovery 

Options
Appendix I: Objectives, Scope, and 

Methodology

Page 35 GAO-16-331 Disability Insurance

inflation. Social Security estimated long-range inflation scenarios of 2.0, 

2.7, and 3.4 percent in its 2015 Trustee’s Report.

We computed total repayments in each scenario as the sum of monthly 

payments. We assumed that people make monthly payments until they 

have paid off their entire balance and then stop paying. If their balance 

was less than their usual monthly payment, we assumed they paid 

exactly the outstanding balance in their final month. We estimated 

scheduled repayments for the following scenarios:

1. Baseline collections (no change): We examined beneficiaries’

outstanding overpayment balances as of September 30, 2015, as well 

as their current monthly repayment rates. We used that information to 

estimate, at current withholding rates, when beneficiaries are 

scheduled to complete repaying their overpayment debts, age at 

scheduled repayment, as well as how much they are scheduled to 

repay over the next five fiscal years.

2. Setting the minimum withholding rate to 10 percent of monthly DI 

benefits: We computed the standing repayment amount as the greater 

of 10 percent of the recipient’s post-COLA benefits in each month or 

the recipient’s actual repayment amount in the ROAR system as of 

September 30, 2015.

3. Adjusting monthly withholding amounts by the cost of living 

adjustment (COLA): These scenarios increased the withholding 

amounts that SSA reported by 0, 2.0, 2.7, or 3.4 percent effective in 

January of each year. The 2.0, 2.7, and 3.4 percent estimated COLAs 

are based on SSA’s long-range inflation estimates in the 2015 Social 

Security Trustee’s report. This scenario adjusts both benefit and 

withholding amounts.

4. Charging interest: This scenario increases the remaining balance at

the beginning of year by 1 percent in the 0 percent COLA scenario, 

and an interest rate equal to the rate of inflation in the other scenarios. 

We chose the 1 percent interest rate in the no inflation scenario 
Appendix I: Objectives, Scope, and 

Methodology

Page 36 GAO-16-331 Disability Insurance

because it is the rate of interest the US government is allowed to 

charge in calendar year 2016 on delinquent debts.1

5. Combined scenarios: We report the results of a few policy options in 

combination. It is important to note that our combination of interest 

and COLA effectively undo the effects of inflation on both monthly 

repayment amounts and on total debt owed.

We assessed the reliability of the data we used by checking for extreme 

and implausible values and by comparing the totals in them to published 

sources and found them to be sufficiently reliable for our use.

In estimating scheduled repayments for the above scenarios, we made a 

number of decisions and assumptions about overpayments and 

withholdings in the custom file provided by SSA. The data provided by 

SSA listed all overpayments that SSA is either actively trying to collect or 

has conditionally written off, referred to Treasury, and will collect if the 

beneficiary becomes eligible for disability or retirement benefits. These

data lists both a claimant—the person whose disability creates eligibility 

for DI benefits—and a beneficiary—who may be the claimant, the 

claimant’s spouse, or a dependent of the claimant. SSA officials told us 

that the agency can seek repayment from the claimant, beneficiary, or 

anyone else receiving benefits on the claimant’s earnings record. We 

aggregated this overpayment level data to the beneficiary level, taking the 

maximum withholding amount per beneficiary if the beneficiary’s account 

showed more than one overpayment, and adding together withholding in 

rare instances when one person benefited from overpayments to multiple 

claimants.

If a beneficiary had withholding on any one of the overpayments on his or 

her record, we treated all overpayments on the account as subject to 

recovery through withholding. This methodology can misstate repayment 

times in situations where, for example, a beneficiary had overpayments 

both on their own disability claim and their parent’s disability claim, and 

both parties are involved in repaying the beneficiary’s overpayments.

 1 Federal agencies can generally charge a minimum rate of interest on outstanding debt 

equal to the average investment rate for Treasury tax and loan accounts for the 12-month 

period ending on September 30 of each year, rounded to the nearest whole percentage 

point. The Secretary of the Treasury is required to publish the rate before November 1 of 

that year. The rate is effective on the first day of the next calendar quarter. See 31 U.S.C. 

§ 3717(a)(1).
Appendix I: Objectives, Scope, and 

Methodology

Page 37 GAO-16-331 Disability Insurance

We identified and excluded from our analysis beneficiaries who appeared 

to be deceased by matching their Social Security Numbers (SSN) to the 

full SSA Death Master File. This may exclude some recoverable 

overpayments from our analysis because SSA officials told us that they 

could seek repayment from anyone receiving benefits on the claimant’s 

earnings record. While about 40 percent of the conditionally written off 

recipients matched to the full SSA Death Master File, only about 0.01 

percent of people in withholding status matched to the full SSA Death 

Master File.

We computed the time to repay under the status quo condition by dividing 

the sum of current balances for a beneficiary by the withholding amount, 

calculated as described above. In general, this yields repayment 

schedules that end—as expected—no later than December 2049 due to 

limitations of SSA’s data system. In a handful of cases—where we 

aggregate one beneficiary across multiple claimants—we get longer 

repayment times.

To identify individual beneficiaries, we used the beneficiary’s SSN when it 

was available. When the beneficiary’s SSN was not available, we 

developed a replacement unique identifier, first under the assumption that 

there was only one person with a given name and date of birth, for each 

claimant SSN; and if the name was missing, then the assumption that 

each combination of a claimant SSN and the beneficiary identification 

code variable identifies a unique person. The beneficiary identification 

code indicates whether the beneficiary is, for example, the claimant’s first 

child, second child, or spouse. This methodology may slightly overstate 

the total number of beneficiaries in the data, since it will miss cases 

where the same person is the beneficiary of two different claimants.

In order to count the number of recipients in withholding, voluntary 

repayment, conditionally written off, and neither paying nor in written off 

status, we developed categorization rules to resolve ambiguities arising 

from the small percentage of beneficiaries who had debts in more than 

one status. Specifically, we considered people to be in withholding status 

if any of their overpayments indicated that they were in “current pay”

status and had a withholding amount. We considered people to be 

making voluntary remittances if they had no withholding on any 

overpayment and had a monthly voluntary remittance amount listed on at 

least one account. We considered beneficiaries to be conditionally written 

off if all of their overpayments were flagged as conditionally written off. 

We categorized the remaining beneficiaries as active, but not currently 

repaying. Throughout this analysis, we use the monthly benefit amount—
Appendix I: Objectives, Scope, and 

Methodology

Page 38 GAO-16-331 Disability Insurance

i.e., the benefits due before a variety of adjustments—to characterize 

benefit levels.

We adjusted future payments in the three scenarios with positive inflation 

by dividing all of the receipts in a given calendar year by (1+r)(t-2015) where 

r is the inflation rate of .020, .027, or .034 and t is the year. This assumes 

that all of the year’s inflation takes place on January 1, and will tend to 

overstate inflation early in the year. This stylized assumption means that 

our COLA plus interest scenario can precisely undo the effects of inflation 

when, in fact, appropriately set annual COLA and interest charges would 

typically overcorrect for inflation during some months and under-correct 

for it during others.

To determine how SSA imposes penalties and sanctions, we reviewed 

applicable federal laws, regulations, and guidance. We also reviewed 

SSA plans for improving its administration of penalties and sanctions, 

internal studies of its use of sanctions, as well as past OIG reviews of 

penalties and sanctions. We interviewed officials in SSA headquarters 

who oversee their use, OIG (which investigates potential fraud), and 

OIG’s Office of Counsel to the Inspector General (OCIG) which has 

responsibility for imposing penalties and considering whether sanctions 

may be warranted. We requested available data from SSA on its use and 

the disposition of penalties and sanctions. However, after discussions 

with SSA officials regarding the agency’s procedures for collecting and 

tracking penalties and sanctions, we determined that these data were not 

sufficiently reliable for our use and did not include them in our report.

To gain further insight on how sanctions are tracked and imposed, we 

interviewed regional sanctions coordinators—individuals responsible for 

reviewing sanctions determinations—in three of SSA’s regions: Atlanta, 

Chicago, and San Francisco. We chose these regions based on variation 

in terms of sanctions workload and error rates according to past SSA 

internal evaluations. The views of these officials are not generalizable 

across all of SSA. We also spoke to officials in SSA’s New York regional 

office, which developed a database for tracking the disposition of 

sanctions.

Civil Monetary Penalties 

and Administrative 

Sanctions
Appendix II: Additional Information on DI 

Overpayments

Page 39 GAO-16-331 Disability Insurance

This appendix provides more information about individuals repaying DI 

overpayments by having a portion of their monthly benefits withheld—

notably, the relationship between their monthly benefit payments and the 

amount of benefits withheld. All data presented is for outstanding 

overpayment balances as of September 30, 2015. Throughout this report, 

the benefit levels we report are SSA’s “monthly benefit amount,” which is 

the amount due to beneficiaries before withholding or other adjustments.

Figures 7 and 8 below break down this population with benefit withholding 

into 10 equal groups (deciles) according to the amount of their monthly 

benefits. Figure 7 shows, for each decile, the median percentage of 

benefits being withheld. Figure 8 shows the median dollars withheld for 

each decile. When we compared individuals with lower monthly benefit 

amounts to those receiving larger benefits amounts, we found that those 

with the smallest benefits had a higher percentage of their benefits 

withheld to repay overpayments. The figures also show that the majority 

of individuals with a larger monthly benefit amount have less than 10 

percent of their DI benefits withheld. Figure 8 shows that the difference 

between withholding 10 percent of the median DI benefit and actual 

median withholding is more than $86 per month in the top decile, which 

consists of more than 31,000 beneficiaries.

Figure 7: Comparison of Median Withholding Amounts and Withholding Amounts as a Percentage of Monthly Benefits (for 

Each Beneficiary Monthly Benefits Decile)

Appendix II: Additional Information on DI 

Overpayments
Appendix II: Additional Information on DI 

Overpayments

Page 40 GAO-16-331 Disability Insurance

Figure 8: Comparison of Median Withholding Amounts and Median Monthly Benefits (for Each Beneficiary Monthly Benefits 

Decile)

Tables 2 to 5 below provide additional information on the relationship 

between withholding and benefit amounts. For each table, we report not 

only the median (the 50th percentile) of the distribution, which offers a 

sense of the “typical” outcome, but also:

• the average

• the 25th and 75th percentiles which give a sense of the experience of 

beneficiaries somewhat below and above the median, respectively;

• the 5th and 95th percentiles to offer a sense of the experiences of 

people experiencing fairly extreme outcomes;

• the number of beneficiaries from which we computed each number; 

and

• the standard deviation.

The withholding and repayment time averages are often significantly 

above the median because these distributions are not symmetric; rather 

people with the largest withholding levels are much further above the 
Appendix II: Additional Information on DI 

Overpayments

Page 41 GAO-16-331 Disability Insurance

median than the people with the smallest withholding levels are below the 

median. For example, table 3 reports that the 95th percentile withholding 

level for all beneficiaries ($517) is $460 higher than the median of $57, 

while the 5th percentile ($10) is $47 below the median. This asymmetric 

distribution of withholding levels at higher amounts produces an average 

of $133, which is more than twice the median and more than the 75th 

percentile of the withholding distribution ($101).

Table 2: Distribution of Monthly Benefit Amounts before Withholding for Individuals Repaying Overpayments through Benefit 

Withholding

Benefit category

Everyone 

having 

benefits 

withheld

1st Quartile:

Monthly 

benefit 

amount less 

than $706

2nd Quartile: Monthly 

benefit amount from $706 

but less than $942

3rd Quartile: Monthly 

benefit amount from $942 

but less than $1,243

4th Quartile:

Monthly benefits 

amount $1,243 

and above

Median (50th 

percentile) $942 $384 $833 $1,070 $1,530

Average $974 $377 $831 $1,077 $1,609

5th percentile $148 $38 $725 $954 $1,264

25th percentile $706 $186 $776 $1,003 $1,362

75th percentile $1,242 $575 $887 $1,148 $1,789

95th percentile $1,865 $684 $931 $1,222 $2,194

Standard Deviation $485 $214 $65 $85 $306

Number of 

beneficiaries 311,386 77,852 77,899 77,810 77,825

Source: GAO analysis of SSA data. | GAO-16-331
Appendix II: Additional Information on DI 

Overpayments

Page 42 GAO-16-331 Disability Insurance

Table 3: Distribution of Dollars Withheld per Month for Individuals Repaying Overpayments through Benefit Withholding

Benefit category

Everyone 

having 

benefits 

withheld

1st Quartile:

Monthly 

benefit 

amount less 

than $706

2nd Quartile: Monthly 

benefit amount from $706 

but less than $942

3rd Quartile: Monthly

benefit amount from $942 

but less than $1,243

4th Quartile:

Monthly benefits 

amount $1,243 

and above

Median (50th 

percentile) $57 $43 $50 $70 $100 

Average $133 $83 $107 $137 $207 

5th percentile $10 $10 $10 $10 $20 

25th percentile $30 $20 $25 $40 $50 

75th percentile $101 $76 $100 $101 $200 

95th percentile $517 $352 $722 $717 $1,263

Standard Deviation $246 $119 $180 $229 $367

Number of 

beneficiaries 311,386 77,852 77,899 77,810 77,825

Source: GAO analysis of SSA data. | GAO-16-331
Appendix II: Additional Information on DI 

Overpayments

Page 43 GAO-16-331 Disability Insurance

Table 4: Distribution of the Percent of Monthly Benefits Amount Withheld to Recover Overpayments

Benefit category

Everyone 

having 

benefits 

withheld

1st Quartile:

Monthly 

benefit amount 

less than $706

2nd Quartile: Monthly 

benefit amount from $706 

but less than $942

3rd Quartile: Monthly 

benefit amount from $942 

but less than $1,243

4th Quartile:

Monthly benefits 

amount $1,243 

and above

Median (50th 

percentile) 8% 10% 6% 6% 6%

Average 18% 32% 13% 13% 13%

5th percentile 1% 3% 1% 1% 1%

25th percentile 4% 7% 3% 4% 3%

75th percentile 13% 42% 11% 10% 11%

95th percentile 100% 100% 100% 67% 100%

Standard Deviation 28% 38% 22% 21% 22%

Number of 

beneficiaries 311,370 77,844 77,896 77,808 77,822

Source: GAO analysis of SSA data. | GAO-16-331

Note: The total number of observations in this table is lower than in the other appendix tables 

because we exclude 16 beneficiaries for whom SSA reported a monthly withholding amount greater 

than their monthly benefit amount.
Appendix II: Additional Information on DI 

Overpayments

Page 44 GAO-16-331 Disability Insurance

Table 5: Distribution of Time Needed to Complete Repayment through Scheduled Benefit Withholding (in Years)

Benefit category

Everyone 

having 

benefits 

withheld

1st Quartile:

Monthly 

benefit 

amount less 

than $706

2nd Quartile: Monthly 

benefit amount from $706 

but less than $942

3rd Quartile: Monthly 

benefit amount from 

$942 but less than 

$1,243

4th Quartile:

Monthly benefits 

amount $1,243 

and above

Median 3.4 2.3 3.4 4.8 4.7

Average 9.0 6.4 8.9 10.5 10.3

5th percentile 0.2 0.1 0.2 0.3 0.2

25th percentile 1.3 0.8 1.4 1.6 1.6

75th percentile 13.3 7.7 13.0 16.9 16.3

95th percentile 34.3 30.1 34.3 34.3 34.3

Standard Deviation 11.3 9.7 10.9 12.0 12.0

Number of beneficiaries 311,386 77,852 77,899 77,810 77,825

Source: GAO analysis of SSA data.| GAO-16-331

Note: Figures in this table may be understated because SSA’s data system can only capture the

portion of repayment plans that occur before 2049.
Appendix III: Comments from the Social 

Security Administration

Page 45 GAO-16-331 Disability Insurance

Appendix III: Comments from the Social 

Security Administration
Appendix III: Comments from the Social 

Security Administration

Page 46 GAO-16-331 Disability Insurance
Appendix III: Comments from the Social 

Security Administration

Page 47 GAO-16-331 Disability Insurance
Appendix III: Comments from the Social 

Security Administration

Page 48 GAO-16-331 Disability Insurance
Appendix III: Comments from the Social 

Security Administration

Page 49 GAO-16-331 Disability Insurance
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 50 GAO-16-331 Disability Insurance

Daniel Bertoni, (202) 512-7215 or bertonid@gao.gov

In addition to the contact named above, Michele Grgich (Assistant 

Director), Daniel R. Concepcion (Analyst-in-Charge), Martin Scire, and 

Robert Letzler made key contributions to this report. Additional 

contributors include: Susan Aschoff, James Bennett, Kathleen Donovan, 

Alex Galuten, Arthur Merriam, Monica Savoy, and Almeta Spencer.

Appendix IV: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments
Related GAO Products

Page 51 GAO-16-331 Disability Insurance

Disability Insurance: SSA Could Do More to Prevent Overpayments or 

Incorrect Waivers to Beneficiaries. GAO-16-34. Washington, D.C.: 

October 29, 2015.

Disability Insurance: Preliminary Observations on Overpayments and 

Beneficiary Work Reporting. GAO-15-673T. Washington, D.C.: June 16, 

2015.

Supplemental Security Income: SSA Has Taken Steps to Prevent and 

Detect Overpayments, but Additional Actions Could be Taken to Improve 

Oversight. GAO-13-109. Washington, D.C.: December 14, 2012.

Disability Insurance: SSA Can Improve Efforts to Detect, Prevent, and 

Recover Overpayments. GAO-11-724. Washington, D.C.: July 27, 2011.

Related GAO Products

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