Federal Workers Pocketed ‘Fraudulent’ Social Security Payments, GAO Finds

Posted on August 5, 2010

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Hundreds of federal employees may have improperly reaped millions in Social Security disability benefits, according to a government watchdog that caught workers at several major agencies pocketing fraudulent payments. 

The Government Accountability Office issued a report that showed at least 1,500 federal employees may have wrongly received benefits. The group’s investigation, which focused on two Social Security programs for people who have limited incomes due to disabilities, found several specific cases in which beneficiaries were earning well above the income cap while still receiving benefits. In one case, a Transportation Security Administration screener was overpaid $108,000, according to the report. 

“Our case studies … confirmed some examples in which individuals received SSA disability payments that they were not entitled to receive,” the GAO said in a letter to Sens. Tom Carper, D-Del.; John McCain, R-Ariz.; and Tom Coburn, R-Okla. Some of the payments were attributed to fraud, others to “administrative error,” according to the report. The GAO found that the Social Security Administration does not use its own automated system to flag workers who may be earning too much income to qualify for benefits. 

“SSA’s internal controls did not prevent improper and fraudulent payments,” the GAO said. 

The report also found thousands of commercial drivers and transportation business owners who may be skirting the law. It focused in part on federal employees, estimating that 1,500 workers were receiving about $1.7 million monthly. Of them, one-quarter were U.S. Postal Service employees and 16 percent were Defense Department civilians. 

The report came with a DVD that showed employees double dipping — by working and receiving benefits. The video showed overpayments to the TSA employee as well as Postal Service workers. 

According to the report, the TSA employee started receiving disability benefits in 1995 for “mood and anxiety disorders.” But she started full-time work in 2003 and earned as much as $50,000; the income cap after which disability payments are supposed to stop was $940 per month in 2008. 

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