For Americans worried that Social Security will run out of money to pay for their Social Security Disability and retirement benefits, the fact that the Social Security Administration has given $40.3 million to deceased beneficiaries may be disheartening.
Even though the SSA has been notified of the deaths of these beneficiaries and has them added to their Death Master File, a database of 87 million death records, money is still being distributed in error. The SSA has not yet released how they plan to combat such mistakes.
Those who do not report the death of a family member and continue to cash checks from the SSA may face fraud charges, like the California man who pled guilty to felony grand theft after cashing in over $300,000 in Social Security checks sent to his dead mother. She had been dead for 15 years, but he had buried her in the back yard and hid her death. Others cannot get Social Security to stop sending checks to their dead relatives, like one man who still receives checks for his mother even though he reported her death four years ago.
A 2008 audit found about one in every 200 deaths is incorrectly entered into the Death Master File, which may result in more incorrect payments. That's about 14,000 of the 2.8 million deaths reported to the SSA.
The problem is not only the deceased beneficiaries who receive checks every month. There are also the overpaid and improperly paid non-beneficiaries, totaling about $320 million.
If the SSA manages to fix the problems, they could save about $152 million. That would be a great relief to those depending on Social Security benefits for their income. In Pennsylvania, people needing assistance in securing Social Security benefits can benefit from contacting a qualified attorney.
Source: CNN Money, "Social Security pays millions to dead people," Blake Ellis, Sept. 7, 2011