Social Security Needs to Prepare for Aging Americans

US News

Social Security is written about almost exclusively in terms of its financial health. Last week, for example, the trustees for Social Security reported that without legislative changes, the program's financial reserves would be exhausted by 2033, and it would thereafter be able to pay only about 75 percent of its legally required benefits. That was the same doomsday year as the trustee's 2012 report, and it was widely interpreted as a sign that the program was in no worse shape than last year. The message: Move on to another news story.

[Read: Social Security Deficit Outlook Remains Unchanged.]

Underneath the headlines, however, the Social Security Administration is struggling to properly meet its obligations to 57 million beneficiaries - 40 million retired workers and dependents of retired workers, 6 million survivors of deceased workers and 11 million disabled workers and dependents of disabled workers. The agency has absorbed stiff budget cuts in recent years and has tried to use technology to replace services formerly done by employees. But the program's own inspector general and a number of outside oversight reports have cited a lack in progress.

The U.S. Government Accounting Office recently assessed how the SSA, which currently has no permanent director, is doing in its efforts to manage its Representative Payee Program. While more than 85 percent of Social Security beneficiaries receive payments directly, about 1 in 7 - or nearly 8.5 million people - are assigned a payee representative to help with their payments, which totaled $72 billion in 2012.

Beneficiaries with payee representatives are mainly children and older people with serious physical and mental disabilities - our society's most vulnerable populations. Yet because of staffing cuts and a lack of strategic planning, the GAO found the agency is not able to provide the people to properly oversee the program and does not have a long-term plan to deal with the enormous increase in representative payees that will occur with the rapid growth in the number of older Americans.

"The Social Security Administration struggles to effectively administer its Representative Payee Program," the GAO report said. "For example, due to increasing workloads and staff attrition, SSA field office managers in some offices said they sometimes have to perform payee program duties that lower level staff typically handle. SSA has also experienced an increasing number of beneficiaries who may not have a suitable payee available."

Payee representatives most often are family members, but the number of beneficiaries without suitable family members - primarily due to a lack of relatives or relatives not willing to help - is increasing. In an effort to recruit people to fill this role, the report noted, the agency hosted a webinar but was unable to attract a single new representative.

[Read: Why Social Security Needs Separate Treatment.]

"SSA also faces challenges ensuring that payees who are selected are suitable for the task," the GAO said. For example, it began a pilot program to identify representative applicants with a criminal record that would bar them from participating. However, the test was based on self-reported information. "SSA also faces challenges monitoring payees' use of beneficiaries' SSA funds," it added.

In both situations, the GAO apparently did not investigate the extent of beneficiary abuses or whether they had worsened because of staffing cutbacks. The SSA says it will use database and software tools to improve performance in both areas. However, the GAO found that the agency regularly talks about instituting better oversight procedures but has no mechanism in place to actually tell if such procedures are effective.

"SSA's piloting of a new payee screening and selection process is an effort to better protect the program from fraud, waste and abuse," the report said. "Nonetheless, SSA does not plan to assess whether the pilot actually reduces the incidence of benefit misuse in the long run."

And it's in the long run that the Payee Representative Program will be tested. "The proportion of elderly individuals is projected to grow to nearly 20 percent of the total population over the next two decades," the GAO said. "It is estimated that not only could the number of SSA beneficiaries grow by as much as 55 percent, but that the number of aged beneficiaries could increase from over 38 million in 2012 to over 72 million in 2035."

[See: 12 Ways to Increase Your Social Security Payments.]

People with Alzheimer's, for example, require payee representatives, and the report noted that "by 2025, the number of people aged 65 years and older with Alzheimer's could increase by as much as 30 percent - from the 5.2 million persons affected in 2012 to 6.7 million."

The GAO said it recommended three primary changes to the agency and that it had agreed to make all of them: evaluate more effective ways to screen criminal records of people applying to be payee representatives, estimate long-term program needs and develop a long-term strategy for dealing with these needs.

"While there are no simple fixes to help SSA manage its growing program workloads," the GAO said, "SSA has demonstrated that it cannot effectively administer the program within its current resources and structure."



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