The Social Security Administration was created during the Great Depression under President Franklin Delano Roosevelt. Though intended for a noble purpose during a time of tragedy and uncertainty, Social Security has become a loan for the government, rendering the original purpose of the fund ineffective.
Now Social Security is in even more of a bind. As reported by Fox News, a recent discovery by the Social Security Administration’s inspector general found that $1 billion was paid to people without a Social Security number over the last decade. This means a vast majority of the incorrect payouts happened during the Obama administration.
When a person becomes unable to handle his or her own affairs, often a designated administrator or representative will be appointed to accept disability or retirement Social Security benefits on their behalf. But upon auditing these records, the agency’s inspector general reported there was a total of approximately $1 billion paid out to 22,426 under-documented representatives.
The inspector also found that there was no paper trail, such as applications or other supporting documentation, to show that the representatives were eligible or legally liable for the payees’ financial affairs. Specifically, the inspector general reported the finding that only about 6% of all such accounts were documented at all.
In addition, the inspector found that the Social Security Administration had payouts of over $850 million to representative payees that the agency had already terminated as designated representatives.
In this erroneous method of keeping applications and other proper documentation, many illegal immigrants have received benefits by “representing” legal benefit payees. While illegal immigrants are allowed to receive benefits for their minor children without a Social Security number, this lapse in proper record keeping has allowed for many errors, possibly resulting in improper distribution of government benefits.
The Social Security Administration attributes the error to the new electronic system that was activated in 2016, and believes it may have had a glitch that changed the status of many files. They did not, however, seem to believe that the system of granting representatives payouts for beneficiaries was a flawed system.
The administration defended their decision to instate some illegal immigrants as designated payees by referencing the section of the Social Security Act that allows them to represent benefit payees in certain situations.
“Specific to this audit, the Act permits us to appoint, in certain circumstances, an undocumented alien, or applicant who resides outside the United States without a Social Security number (SSN), to serve as payee,” the SSA stated in its defense. “Specifically, the Act states we should verify a person’s SSN (or employer identification number) in our investigation of the payee applicant. However, the Act does not state that the applicant must have an SSN to serve as a payee.” (via The Washington Free Beacon)
The problem is, as the inspector general stated, “unless it takes corrective action, we estimate SSA will pay about $182.5 million in benefits, annually, to representative payees who do not have an SSN or paper application supporting their selection.”
According to the official report, the administration has “taken steps to update [their] policy, improve [their] business processes, and make systems enhancements to ensure accurate payments to all beneficiaries and representative payees. [They] have transitioned from storing documentation in paper folders to uploading to a Certified Electronic Folder.” (via Social Security Administration)
This is just one of many scandals to come out of the Obama administration. Do you think there’s more fraud to be found in other departments? Let everyone know in the poll below!
The report further noted that none of the designated payees were found to be incapable of managing beneficiaries’ money, and are hoping to resolve the documentation issues immediately without cause for terminating rights.
The issue with allowing someone without a Social Security number to receive benefits on behalf of a recipient is that fraudulent use of the funds is much more likely, specifically for illegal immigrants. No glitch in a system or a policy should allow for $1 billion to be paid out to people who do not have a Social Security number.
That is a burden to the taxpayer and fraudulent in many respects.