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Analysis: Feds fail to catch 117,000 collecting both disability, unemployment

Friday - 8/31/2012, 11:45am  ET

The government is letting people double dip into jobless and disability benefits, costing taxpayers $850 million

Phillip Swarts, WashingtonGuardian.com

As many as 117,000 Americans simultaneously collect unemployment benefits and federal disability each year, a form of double-dipping that investigators say costs taxpayers $850 million annually and should be ended.

The reason for the double-spending, investigators at the Government Accountability Office reported this week, is good old-fashioned lack of communication.

Put simply, the Labor Department that funds unemployment benefits and the Social Security Administration that funds disability payments don't compare notes, leavings tens of thousands of Americans each month to collect two checks from a stretched-thin government treasury.

"The government is replacing a portion of their lost earnings not once, but twice. Reducing or eliminating this overlap and potential improper payments could offer substantial savings," GAO warned.

Those who take advantage can make out quite well. One double-dipper identified by the GAO, for instance, wracked up a handsome $62,000 in 2010 by tapping both programs simultaneously, even though it appears the person also held a job, investigators found. Another received $107,000 in overlapping payments between 2008 and 2011, despite working for construction companies, auditors found.

For their lack of oversight, coordination and communication, the Social Security Administration and Labor Department earn this week's Golden Hammer, a distinction awarded each week by the Washington Guardian to an egregious example of waste, fraud or abuse that hurts taxpayers.

The two agencies told the GAO they agree with the findings and are already talking to each other about how to tighten up their financial ships.

While some instances of double-dipping are allowed by current law, GAO recommends all forms of it should be ended to save money for a government chronically adding $1 trillion or more a year to its national debt. And the urgency for change is growing since both programs are running out of money.

"Both trust funds face serious fiscal sustainability challenges, prompting the need to examine opportunities for potential cost savings," the GAO said.

The report comes as federal benefit programs are looking for ways to cut their payments to avoid depleting their funds, especially as the spending cuts from last year's debt deal take increasing effect.

Disability Insurance in particular is expected to be exhausted by 2016, the report said. And funds for Unemployment Insurance "were at historically weak levels," the GAO said.

The overlap in the two programs accounts for less than one percent of the more than $270 billion given out in benefits. Overall, $281 million in double payments was handed out from disability insurance, while $575 million was from the unemployment insurance.

You can read the GAO's report here.

Original story here.

(Copyright 2012 by The Washington Guardian. All Rights Reserved.)