By LOUISE RADNOFSKY
The Social Security Administration sent about 89,000 stimulus payments
of $250 each to dead and incarcerated people—but almost half of them
were returned, a new inspector-general's report found.
The agency was charged with distributing the one-time payments, worth
about $13 billion in total, as part of the economic-stimulus package
passed in February 2009. Most of the payments were made in May 2009.
The inspector general found that about 72,000 payments were sent by
electronic-transfer and as checks to people who would have qualified to
receive them—had they still been alive.
The report Thursday said that of these payments, about 55,000 were sent
because the recipients had died recently, and the Social Security
Administration had not been informed of their deaths by states,
families or funeral homes at the time the payments were sent.
The remaining 17,000 of the mistaken payments were attributed to the
SSA failing to properly process death records that it did have.
Another 17,000 payments went to recipients who were in prison at the
time the payment was made in May 2009. However, not all of those
payments were necessarily against the letter of the law. While
lawmakers intended to prevent payments to people in prison, the law
included only a provision prohibiting payments to people incarcerated
in the three months before the plan was passed—from November 2008
through January 2009.
There is a bright spot in the report: The inspector general estimates
that about 41,000 of the payments were returned. It is illegal to spend
social-security money issued to somebody else, but such actions are
rarely prosecuted for small amounts. At least one person has been
prosecuted for cashing a stimulus check not issued to them, in one of
the few accusations of stimulus fraud to date.
The downside: The SSA says that the stimulus package didn't include a
provision allowing it to try to retrieve funds that were mistakenly
sent out, so it can't try to retrieve the rest of the money. Money
transferred electronically may be sitting untouched in bank accounts of
The combined total of the mistaken payments is $22.3 million. About $12 million hasn't been returned.
The SSA said in response to the report that it was pleased with the
overall finding that the "vast majority" of payments were properly
issued. "In the short timeframe imposed… we issued economic—recovery
payments accurately to more than 99.8 percent of approximately 52
million eligible Social Security and Supplemental Security Income
beneficiaries," it said.
The report drew criticism from Republican Sen. Tom Coburn of Oklahoma,
a longtime campaigner against waste, who opposed the economic-stimulus
"This report highlights the broader problems with the Recovery Act itself," said Mr. Coburn, in a statement.