Social Security whistleblower slams ‘messed up’ system, claims US seniors are being overpaid by $9B a year — and all Americans are paying the price

An issue that’s gotten worse

Attorney Avram Sacks, a former employee of the Social Security Administration (SSA), has firsthand experience with the agency’s tendency to issue overpayments. Often, it boils down to simple errors. However, in some cases, overpayments may be a result of fraud.

Sacks became vocal about the issue of overpayments when he realized that the process had gotten worse instead of better since his early days on the job in 1987.

“It was at that point that I realized the system for assessing overpayments was really messed up, and as a government attorney, I needed to make sure that what I was advocating in federal court was correct,” he told the U.S. Sun.

A 2024 report by the SSA’s Office of the Inspector General found that between 2015 and 2022, the agency made almost $72 billion in incorrect payments, the majority of which were overpayments. And while the agency has the right to claw back that money, getting it is easier said than done. As of the end of the 2023 fiscal year, the SSA still had more than $23 million in overpayments it had yet to recoup.

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Does Social Security need a watchdog?

The Social Security Trustees release an annual report about the program's finances. This year, they announced that the program's combined trust funds are projected to run out of money in 2035. If that happens, it could result in roughly a 25% reduction in benefits.

A cut of that size could be catastrophic for the millions of retirees who depend on those monthly benefits today. Among Social Security recipients aged 65 and older, 12% of men and 15% of women count on the program to provide 90% or more of their income. Within that same age group, 37% of men and 42% of women look to Social Security for at least 50% of their income.

As of 2022, the median retirement savings account balance among Americans aged 65 to 74 was just $200,000. Using the 4% rule, that amounts to about $8,000 of actual income.

To prevent the issue from getting worse, the SSA needs to take steps to address overpayments and prevent them from continuing. On the positive side, the Office of the Inspector General recently made recommendations to detect improper payments before they are released and correct existing improper payments. On the negative side, many of those recommendations have yet to be implemented.

However, some progress has been made. In October 2023, the SSA began a review of overpayment procedures. They are also developing a system to obtain earnings data from third-party payroll providers that could reduce the likelihood of overpayments for seniors who are working and receiving monthly benefits simultaneously.

The hope is that Social Security will stop spending more money on benefits than it needs to. While preventing overpayments won’t fully address the program’s solvency issues, it’s one step of many that could be crucial to avoiding or limiting benefit cuts.