How Much Social Security Fraud Consists of Payments to Dead People?

If you are interested in living well past the age of 100, there seems to be one sure-fire way to improve your chances: get a U.S. Social Security number. Although there are only about 40 people in the entire world known to have reached the age of 112, the Social Security Administration reports 6.5 million Americans alive and well and at least 112 years old.

The U.S. Social Security system is designed to provide supplemental income to senior citizens. A 2015 report from its inspector general concluded that the Social Security Administration (SSA) is lacking some basic controls to prevent fraud. One glaring problem, according to the report, is that the SSA does “not have controls in place to  annotate death information on the Numerical Identification System (Numident) records  of number holders who exceeded maximum reasonable life expectancies and were likely deceased.”

One significant problem is in the reporting of deaths. The Social Security records include the Death Master File (DFM), used as a reference source for many public and private institutions. The information for this list comes from funeral homes, state agencies, surviving families, and federal agencies. According to the report, although the SSA received information about the deaths of nearly 1.4 million people, it failed to transfer that information to the DFM. Consequently, not only is there the potential of many Social Security payments to dead people, but the Social Security numbers of these people remain active and could be used for fraudulent purposes. The report warned that this could result in fraudulent reporting of wages, illegal bank accounts, bogus credit card accounts, and the claiming of fraudulent tax refunds.

Saying there is a potential for fraud is an understatement. Globally, there are approximately 40 people now living who have been documented as having achieved the age of 112. Despite that, the Social Security records show 6.5 million people in its system who have attained that age and still alive and kicking.

These very-elderly people apparently are not just sitting around and drinking prune juice. They are quite active. Between the years of 2006 and 2011, nearly 67,000 Social Security numbers of these super-senior citizens were used to report more than $3bn in wages, tips and self-employment income. One Social Security number was used 613 times. An additional 194 numbers were used at least 50 times each.

The report also disclosed bank accounts that were opened using active Social Security numbers belonging to individuals born in 1886 and 1893. In 2008 an employer reported wages for an individual who actually died in 1962. Overall, the analysis found more than 66,000 people were still reporting wages and approximately 4,000 e-verify checks were run on Social Security numbers that belonged to people born before June 16, 1901. Some of these people of very advanced years even registered to vote.

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