Pension fund pays millions to dead

By David Pace

Associated Press

WASHINGTON — Social Security paid $31 million through the end of last year to dead people who were listed as deceased in the agency’s own electronic files, auditors say.

One woman who died in November 1993 was still receiving benefit checks in May 2000, and auditors said more than $100,000 in benefits had been paid after her death. Authorities stopped the payments last November and now are trying to determine who cashed her checks.

The audit, completed earlier this summer by the Social Security Administration’s inspector general, has led to nearly 1,400 investigations resulting so far in the identification of $11.5 million in improper payments, officials said Friday. Of that amount, $6.1 million either has been recovered or is scheduled for recovery.

Eight people face criminal fraud charges, and more charges are expected. In most cases, they involve people who had joint bank accounts with the dead beneficiaries and converted the Social Security checks to their own use.

Some of the payments have been recovered without any charges being filed. In March, for example, investigators in Baltimore recovered $57,062 in uncashed Social Security checks from the son of a beneficiary who died in 1994.

Auditors developed the $31 million estimate by looking at a sample of 200 auxiliary beneficiaries — people eligible for Social Security benefits because of a deceased relative’s work record — who were receiving payments last December even though they themselves were listed as dead in the agency’s master file.

Auxiliary beneficiaries accounted for about a quarter of the 45.4 million Social Security beneficiaries last year, and received about 20 percent of the $418 billion in benefits. The audit did not examine benefits paid to retirees and disabled workers.

Auditors confirmed that 33 of the 200 auxiliary beneficiaries in the sample were dead and had been paid more than $1 million in benefits between the time of their deaths and last December.

In a statement Friday evening, the Social Security Administration said it processes more than 2 million death reports annually with an accuracy rate of 99.9 percent.

The auditors also found that 165 in the sample were alive, even though agency files listed them as dead.

One widow who has been receiving benefits since 1962 was listed as having died in 1997. When investigators contacted her, she told them it was the third time Social Security officials had asked about an erroneous record of her death.

Investigators found 64 other living beneficiaries who were listed as dead in the agency’s electronic files and who had previously been contacted by the agency to determine if they were alive and entitled to continue receiving Social Security checks.