Major Causes of Improper Payments

The table below indicates the major causes of improper payments (overpayments and underpayments) in FY 2012 for the RSDI program using OMB’s three categories of error:



Major Causes of RSDI Improper Payments in FY 2012
  % of Improper Payments Major Types of Errors
Verification and Local Administration Errors 67% Non-verification of earnings, income, or work status (e.g., in relation to Substantial Gainful Activity (SGA) and Government Pension Offset); inputting, classifying, or processing applications or payments incorrectly
Administrative and Documentation Errors 28% Incorrect computations, onset dates, and earnings history
Authentication and Medical Necessity Errors 5% Relationship/dependency errors and failure to report cessation of full-time attendance for students

The following tables indicate the major causes of RSDI overpayments and underpayments,
for FYs 2008 - 2012, as determined from our payment accuracy reviews:

Major Causes of RSDI Overpayments FY 2008 – FY 2012
SGA When a disability beneficiary works, a number of factors determine if the individual can continue to receive monthly benefits. After completing a nine-month trial work period, we do not pay a beneficiary for months when earnings exceed SGA thresholds. Overpayments occur when beneficiaries fail to timely report earnings, or when we do not timely withhold monthly benefit payments from those engaging in SGA.
Computations We determine an individual's benefit amount based on a number of factors, including age, earnings history, and the type of benefit awarded. Inaccurate information or administrative errors can result in incorrectly calculated benefits. In terms of overpayments, computation errors involving the Windfall Elimination Provisions are the leading cause of deficiencies.
Major Cause of RSDI Underpayments FY 2008 – FY 2012
Computations We determine an individual's benefit by using several factors such as age, earnings history, and the type of benefit awarded. Inaccurate information or administrative mistakes can cause errors in benefits.