According to a report from the Social Security Administration’s Inspector General, an estimated 11,123 widows and widowers were eligible for higher benefits had they delayed claims until age 70. The misinformed filings resulted in about $131.8 million in underpayments to beneficiaries age 70 and older, and another $9.8 million in annual payments for those under age 70.
The report also found that SSA did not have controls in place to alert employees as to when delaying benefits was in applicants’ best interest.
The findings in the report were based on a sample of 50 beneficiaries, 82% (41 individuals) of whom were eligible for a higher monthly benefit had they delayed claiming the retirement portion of their benefits until after age 70. For the seven beneficiaries under age 70 that inadvisably claimed early in the SSA’s sample, the loss in benefits will be substantial. Upon reaching age 70, the average loss in benefits will be $5,185 annually.
The decision when to file for benefits belongs solely to claimants, the report notes. But SSA policy requires employees to electronically document when unfavorable filing decisions are made.
The IG recommends that the agency “take action” regarding the 41 beneficiaries in the sample that received lower benefits due to inaction from agency employees, though it did not say whether that action would include repaying benefits that were lost. The office also recommends reviewing the remaining 13,514 beneficiaries that are potentially impacted from early filings, and exploring new controls to assure beneficiaries are informed of the option to delay retirement portions of benefits.
Read the full article here.