Social Security Administration is shortchanging survivors on benefits, report says

Widows and widowers who were shortchanged on Social Security benefits by an estimated $131.8 million won't get any of that money back, despite an Inspector General report calling for action.

Earlier this year, the administration's Office of the Inspector General issued an audit report that determined the Social Security Administration (SSA) underpaid 9,224 people over the age of 70. In addition, as more people in this group turn 70, the underpayment will amount to $9.8 million annually, auditors found.

The report said SSA officials agreed to "take action, as appropriate" for 41 beneficiaries it identified directly in the sample study and determine if it should review the records of more than 13,000 other beneficiaries. It also asked the administration to review its procedures and staff training for informing beneficiaries of their claiming options.

SSA has since provided "nationwide training" to field office workers about these survivor options and changed the language in application materials, said Darren Lutz, a Social Security spokesman.

It won't, however, change anyone's benefits retroactively based on the study.

"We reviewed the cases from the audit and determined they were adjudicated correctly, according to the law," he said in an e-mail. He declined to comment beyond the statement or make officials available to discuss the training.

Asked for comment, a spokesman for consumer advocate AARP referenced a letter the organization sent to the Office of Management and Budget in January urging more funding for the Social Security Administration, saying it cannot maintain customer service at current funding levels.

"People have been and continue to be misled on a routine basis by what field office staff tell them," he said.

Several websites offer free or paid calculators that help people determine their best option for claiming benefits. Kotlikoff has two: www.maximizemysocialsecurity.com and www.maxifiplanner.com. Another is www.socialsecuritysolutions.com.

The key error found in the study was the failure to make survivors aware they have the option to take their survivor benefit, but not the one based on their work record, and then switch to the other at a later date.

For example, a 60-year-old widow could claim her survivor benefit now, letting the benefit based on her work record continue to grow because it hasn't been claimed. At 70, she could then switch to her higher work-based benefit for the rest of her life.

In 2016, a separate Inspector General report estimated a group of about 25,000 survivors had been underpaid by $224 million due to errors in calculating their claims. When workers die before reaching age 62, their eventual survivor benefits are supposed to be calculated based on the year they would have reached that age, not the year of death, a difference that typically increases the survivor benefit.