US Reclaims An Absurd Amount Of Social Security Payments To Dead People
Doubts about Social Security have circulated for years, with claims running rampant about Social Security funding being in danger of running out to dead people receiving Social Security payments. As it turns out, at least one of those claims has turned out to be true and something is finally being done about it.
On January 15th, 2025, the U.S. Department of Treasury, the government department which oversees federal finances by collecting taxes, managing public debt, and enforcing tax and finance laws, issued a press release announcing that it had successfully prevented and recovered $31 million in Social Security payments to deceased individuals. The payments were identified as both fraudulent payments and improperly issued payments and were discovered as part of a 5-month pilot program between the Treasury Department and the Social Security Administration (SSA) working with what is known as Social Security's Full Death Master File.
There is no word yet on what, if any, repercussions there will be for those the money was recovered from, however penalties for Social Security fraud, which include failure to notify the SSA that a loved one has died in order to keep receiving their payments can result in penalties ranging from $500 to $10,000 and from 5 to 10 years of incarceration in a Federal prison.
What is the Full Death Master File and why should you care?
The U. S. Department of Treasury is pushing for full access to this file, which will help with ongoing efforts to continue to ensure that fraudulent payments and improperly issued payments are mitigated moving forward. There are mistakes that individuals can make that can cost them when it comes to social security benefits, but death is not exactly one of them. It is something that results in a final death benefit or, in some cases, an ongoing spousal benefit, but your regular monthly payments should otherwise stop upon your death. Failure on behalf of the SSA to stop those payments in a timely manner has the potential to result in both fraud and weakening public opinion of the SSA and the U.S. Department of Treasury.
The Full Death Master File, which is maintained by the SSA, is a compilation of more than 142 million records of individuals who have died dating back to 1899. This is the most complete and comprehensive record of its kind and was made available to the U.S. Department of Treasury as part of this pilot program as a result of the Consolidated Appropriations Act of 2021, This act granted access for a period of three years starting in December of 2023 and ending in December of 2026.
What can we expect moving forward?
The Treasury Department seems committed to its efforts in putting an end to improper and fraudulent payments, at least as far as deceased individuals are concerned. For a country with a national debt of more than $36 trillionand a massive amount of money going out each year in Social Security payments, recovering and saving every penny it can make a word of difference, not just in the country's financial stability in the public's confidence levels. With a majority of older Americans receiving social security benefits, the issue not only affects those currently receiving benefits but those currently working toward them.
"These results are just the tip of the iceberg," stated David Lebryk, who has served as the Chief Fiscal Assistant Secretary with the U.S. Department of Treasury since June of 2014, on the Treasury's website. Over the course of this temporary access, the government expects to continue to recover misappropriated funds totaling $215 million.
According to the Employment Benefit Research Institute (EBRI), 88% of Americans expect to receive Social Security benefits when they retire. With 91% of current retirees listing Social Security as a major source of income, the proper distribution of these benefits are not only crucial to Americans now but will continue to be so in the future.