$120 Million Per Year Paid To Dead Federal Retirees

It’s a small part of the Federal Budget, but this is likely to be an example of government waste that’s remembered for a long time:

The federal government pays out millions of dollars to dead people each year — including deceased retired federal workers, according to a new report.

In the past five years, the Office of Personnel Management has made more than $601 million in benefits payments to deceased federal annuitants, according to the agency’s inspector general. Total annual payouts range between $100 million and $150 million.

Inspector General Patrick E. McFarland, who previously reported on the improper payments in 2005 and 2008, urged OPM to more closely track such mistakes.

“It is time to stop, once and for all, this waste of taxpayer money,” he wrote in the report.

Improper payments to dead retirees increased 70 percent in the past five years, far higher than the 19 percent climb in overall annuity payments, the report said.

The payments are on the rise because OPM is doing a poor job of tracking potential cheats, McFarland said. In one case, a deceased annuitant’s son continued receiving federal benefits until 2008 — 37 years after his father’s death. OPM learned about the improper payments — which exceeded $515,000 — only after the son died. The agency never recovered the money.

An OPM spokesman said Thursday that the agency is reviewing the report and had no immediate comment.

The report said OPM is attempting to stop and recoup payments in several ways, by conducting weekly and annual matches of its data against the Social Security Administration’s death records and occasionally checking records for annuitants 90 years and older to determine whether they are still alive.

It’s actually quite inexplicable considering that one branch of the Federal Government actually does a fairly decent job of cutting off benefits after death. The Social Security Administration is well-known for sending notices to banks immediately upon learning of a recipients death — something that happens very quickly nowadays since deceased person’s Social Security Numbers are immediately reported as such by the relevant authority in the jurisdiction where they live — and also recouping payments after death on a pro rata basis. Why the OPM is unable to do this?

The other issue, of course, is that there’s some actual fraud going on here. Family members who continue to collect benefits after a retiree dies are defrauding the Federal Government. Since the odds of recovering anything from people like this years after the fact are minimal at best, it strikes me that the best deterrent would be to start prosecuting these people and send the message that defrauding Uncle Sam comes with consequences.

Again, it’s a small amount of money relatively speaking, but that doesn’t mean something shouldn’t be done about it.

FILED UNDER: Bureaucracy, Crime, Deficit and Debt, Quick Takes, US Politics
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. Sam says:

    Didn’t The One give VP Joe foot in mouth Biden the task to root out all waste in government?

    Hows that going Joe?

  2. john personna says:

    I’d guess, at $150M, we are doing better at this than other countries.

    And at least no one is keeping bodies around, Japanese style.

  3. The Florida Masochist says:

    My mother-in-law died Oct. 4th of last year. Her SS benefits were terminated immediately. This type of government efficiency is good but startling.

  4. Steve Verdon says:

    In one case, a deceased annuitant’s son continued receiving federal benefits until 2008 — 37 years after his father’s death. OPM learned about the improper payments — which exceeded $515,000 — only after the son died. The agency never recovered the money.

    Who cares, just consider it stimulus money.

  5. DMan says:

    this is likely to be an example of government waste that’s remembered for a long time

    If it’s an example of government waste, isn’t it an example that more and better government regulation is needed to prevent such waste?

  6. It’s actually quite inexplicable considering that one branch of the Federal Government actually does a fairly decent job of cutting off benefits after death.

    Unless you’re one of the 14,000 people that social security wrongly declares dead each year:

    http://money.cnn.com/2011/08/17/pf/social_security_deaths_mistakes/index.htm

    Of the approximately 2.8 million death reports the Social Security Administration receives per year, about 14,000 — or one in every 200 deaths — are incorrectly entered into its Death Master File, which contains the Social Security numbers, names, birth dates, death dates, zip codes and last-known residences of more than 87 million deceased Americans. That averages out to 38 life-altering mistakes a day.

  7. James Joyner says:

    When I got out of the Army back in 1992, they continued paying me for three months. Even though the Army spent weeks “out processing” me. This was pretty typical in those days (not sure whether it still is) so I didn’t bother to report it, knowing they’d figure it out soon enough. When they did, they sent me a letter with all manner of options for paying back on installment and so forth; I just sent them a check.

  8. Peterh says:

    When I got out of the Navy in `74, the only mistake made was them not asking me to turn in my divers watch……I got a letter a year or so later asking for it…..I ignored it…..the watch gave out not long after….no follow up by the Navy….so in essence, no real money mistakes….dang…..

  9. mike says:

    @James Joyner: Not too bad – an interest free loan for a few months. Nowadays, your final appointment is with finance and they do a final accounting of what they owe you based on days of leave left etc… and you know when your last paycheck is coming and how much – or how much you owe (for instance if you got a signing bonus and have not fulfilled the terms of your obligation or something).
    I think for a lot of folks the government will have a lot of difficulty ever seeing the money again.