New Evidence on DI Overpayments Following Return to Work and Implications for Initiatives to Reduce Them

DRC Brief Number: 2018-04
Publisher: Washington, DC: Mathematica Policy Research
Dec 31, 2018
Denise Hoffman and Christopher Jones

Key Findings:

  • Among those at risk of an overpayment between 2010 and 2012, 71 percent were overpaid.
  • The following beneficiary characteristics were significant predictors of overpayments: less than a high school education, SSDI benefit amount of less than $1,000, not receiving SSI, and first engaged in SGA during the analysis period.
  • Many of the overpaid beneficiaries who participated in qualitative interviews were surprised when they were overpaid because they thought they had followed the SSDI rules.
  • There is an association between overpayments and a decline in engagement in substantial gainful activity. However, these results do not account for other factors that could affect earnings.
Some Social Security Disability Insurance (DI) beneficiaries seek employment to improve their financial or general well-being. In the process, they may become ineli­gible for a benefit check because of work, which leaves them vulnerable to work-related overpayments. These overpayments occur when the Social Security Administration (SSA) issues a benefit check even though the beneficiary is ineligible due to work. This can occur because SSA was unaware of the beneficiary’s work or did not promptly process information on earnings. Regardless of the cause, beneficiaries are typically required to repay any overpayment to SSA. From 2010 to 2012, SSA overpaid 71 per­cent of working beneficiaries who could potentially have been overpaid. New research has shown that notices of such overpayments are accompanied by a decline in work activity and has sought to understand why. Collectively, the findings point to a growing need for SSA policies that will reduce overpayments. In this brief, we draw on infor­mation on the characteristics of overpaid beneficiaries and their reported experiences to suggest broad areas for improvement.