Overpayments Over Time: A Longitudinal Analysis of Work-Related Overpayments to Social Security Disability Insurance Beneficiaries

Overpayments Over Time: A Longitudinal Analysis of Work-Related Overpayments to Social Security Disability Insurance Beneficiaries

DRC Working Paper
Published: Oct 30, 2020
Publisher: Washington, DC: Mathematica
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Associated Project

Disability Research Consortium

Time frame: 2012-2019

Prepared for:

Social Security Administration

Authors

John T. Jones

Alex Bryce

Key Findings
  • There are large fluctuations in the prevalence of work-related overpayments.
  • The overpayment prevalence rate is positively correlated with the employment-to-population ratio and negatively correlated with the unemployment rate.

This study, covering the period from January 2008 to December 2016, is the first to provide longitudinal statistics on the monthly prevalence of work-related overpayments to Social Security Disability Insurance (DI) beneficiaries. Overpayments occur when the Social Security Administration (SSA) issues a benefit to a beneficiary who is not entitled to it because he or she engaged in substantial gainful activity (SGA). Program rules dictate that SSA should withhold benefits when a beneficiary engages in SGA, which is generally defined as monthly earnings of at least $1,260 per month in 2020 following application of any SSA work incentives. But this does not always happen, because beneficiaries might not report their earnings to SSA in a timely manner and because SSA might be delayed in processing the earnings information when it is available. Although overpayments create financial problems for SSA and beneficiaries alike, relatively little is known about the beneficiary-level prevalence of overpayments. Our findings offer clues to strategies that SSA and policymakers might consider to reduce the rate of work-related overpayments.

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