Social Security Admin Fraudulently Awards Dead People Over $31 Million in a Few Months

It appears that Uncle Sam really likes giving taxpayer dollars to the dead. Years after a federal audit slammed the U.S. government for awarding $1.4 billion in COVID-19 assistance to dead people, the Treasury Department has recovered more than $31 million in scams and improper payments to decedents in just a few months. The disbursements were easily discovered during a five-month pilot program with the Social Security Administration’s (SSA) Full Death Master File. In 2023 Congress granted the Treasury Department temporary access to the special database as part of an effort to curb an epidemic of erroneous payments to people who had already died. The access, which expires in 2026, should be extended since it has proven to be instrumental in saving taxpayers large sums of money.

That is because the troubled SSA, long plagued by understaffing and funding problems, maintains the most complete federal database of individuals who are reported to have died. “The Full Death Master File contains more than 142 million records, with records going back to 1899,” the Treasury Department writes in the announcement disclosing the multi-million-dollar recovery. SSA has been doling out cash to the dead for quite a while. Over a decade ago, the SSA Inspector General found that about 630 people misused benefits intended for the deceased, cheating taxpayers out of more than $55 million. A few years ago a national newspaper reported that SSA has paid hundreds of millions of dollars to scammers that live off of dead peoples’ benefits. In just three states—Texas, Maryland, and Michigan—SSA disbursed over $40 million to 500 dead people, the article confirms.

The Treasury Department stepped in because SSA was not taking sufficient action to end the pervasive fraud. Americans may wonder why it took so long. Treasury’s Office of Payment Integrity provides federal agencies and state-administered programs that are funded by the federal government access to tools and services to prevent fraud, including confirming payment eligibility and verifying account status and ownership. In a brief time, the agency uncovered tens of millions of dollars in fraudulent payments. “These results are just the tip of the iceberg,” said Fiscal Assistant Secretary David Lebryk in the recently issued Treasury announcement. “Congress granting permanent access to the Full Death Master File will significantly reduce fraud, improve program integrity, and better safeguard taxpayer dollars.”

Highlights of the new pilot program include $215 million projected net benefit over the three years that the Treasury Department has access to the SSA Full Death Master File. The program also enhances detection capabilities that integrate death data with matches and improved timeliness. The Treasury Department also says the effort has already resulted in notable growth in new and/or expanded partnerships as well as increased usage of the Do Not Pay (DNP) working system it created with the Office of Management and Budget (OMB) for government agencies to use in preventing improper payments. Years ago, a federal audit found that the DNP working system offers either partial or no access to three of the six databases required by a 2012 law enacted to eliminate improper payments in government. Among the inaccessible databases is the SSA’s death records, according to the probe which was conducted by the investigative arm of Congress.

SSA is hardly alone when it comes to doling out money to fraudulent causes. Improper payments are a long-standing and significant governmentwide problem, a federal probe made public just days ago affirms. The audit reveals that since fiscal year 2003 executive branch agencies have reported an astounding $2.8 trillion in cumulative improper payments, including a whopping $161.5 billion for fiscal year 2024, which ended in September. The spending is so out of control that Congress passed a law (Payment Integrity Information Act) in 2019 requiring federal agencies to cut down on improper payments, which are identified in the legislation as those that should not have been made or were made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirement. This includes duplicate payments as well as any payment made to an ineligible recipient.

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