A-05-08-28106 - Alternate Format

MEMORANDUM

Date: September 30, 2008 Refer To:

To: The Commissioner

From: Inspector General

Subject: Quick Response Evaluation: Individuals Withdrawing Title II Benefit Applications
(A-05-08-28110)

The attached final quick response evaluation presents the results of our review. Our objective was to assess the process, and related volume of transactions, whereby Title II retired beneficiaries age 62 and over withdrew their Social Security Administration benefit applications and requested new benefits based on a later retirement date.

If you wish to discuss the final report, please call me or have your staff contact Steven L. Schaeffer, Assistant Inspector General for Audit, at (410) 965-9700.

Patrick P. O'Carroll, Jr.

QUICK RESPONSE
EVALUATION

Individuals Withdrawing
Title II Benefit Applications

A-05-08-28110

September 2008

Mission

By conducting independent and objective audits, evaluations and investigations, we inspire public confidence in the integrity and security of SSA’s programs and operations and protect them against fraud, waste and abuse. We provide timely, useful and reliable information and advice to Administration officials, Congress and the public.

Authority

The Inspector General Act created independent audit and investigative units, called the Office of Inspector General (OIG). The mission of the OIG, as spelled out in the Act, is to:

 Conduct and supervise independent and objective audits and investigations relating to agency programs and operations.
 Promote economy, effectiveness, and efficiency within the agency.
 Prevent and detect fraud, waste, and abuse in agency programs and operations.
 Review and make recommendations regarding existing and proposed legislation and regulations relating to agency programs and operations.
 Keep the agency head and the Congress fully and currently informed of problems in agency programs and operations.

To ensure objectivity, the IG Act empowers the IG with:

 Independence to determine what reviews to perform.
 Access to all information necessary for the reviews.
 Authority to publish findings and recommendations based on the reviews.

Vision

We strive for continual improvement in SSA’s programs, operations and management by proactively seeking new ways to prevent and deter fraud, waste and abuse. We commit to integrity and excellence by supporting an environment that provides a valuable public service while encouraging employee development and retention and fostering diversity and innovation.

Executive Summary
OBJECTIVE

Our objective was to assess the process, and related volume of transactions, whereby Title II retired beneficiaries age 62 and over withdrew their Social Security Administration (SSA) benefit applications and requested new benefits based on a later retirement date.

BACKGROUND

An SSA beneficiary’s monthly benefit amount can vary based on the age at which the beneficiary decides to start receiving benefits. If the beneficiary requests benefits before full retirement age (FRA), he or she will get a reduced monthly benefit. Also, if a beneficiary waits until age 70 to retire, the monthly benefit amount increases. SSA policy also allows beneficiaries to withdraw an application after it has been filed once beneficiaries consent in writing to the withdrawal and repay all the benefits received.

RESULTS OF REVIEW

Current SSA policy allows withdrawal of an application for any reason. The Agency did not maintain detailed management information related to the number of Title II retirement application withdrawals. We estimate that Title II retirement application withdrawals in Calendar Year 2007 ranged from about 12,000 applications (the number we were able to extract from SSA’s systems) to about 26,000 applications (the Agency’s reported number). Our review of withdrawal applications indicated the majority of beneficiaries withdrawing benefits are doing so prior to FRA as a result of work activity that has reduced or eliminated monthly benefit payments. We identified cases where it appeared beneficiaries were withdrawing benefits to obtain a higher monthly benefit, though the volume was small. Nonetheless, SSA’s open-ended policy on application withdrawals allows individuals to bypass the Agency’s retirement policies that encourage delayed retirement. Moreover, the policy allows the beneficiaries to deny the Trust Fund use of these monies prior to withdrawal without being required to pay interest or penalties for the use of these Federal funds. Finally, while the number of beneficiaries using this process may be small at this time, the workload could grow and SSA will need to decide if this is where it wants to invest its scarce resources.

MATTERS FOR CONSIDERATION

SSA may want to modify the criteria for withdrawing Title II benefit applications and limit its use. For example, withdrawals could be limited to cases where (1) work activity has significantly reduced the amounts received by the beneficiary and (2) the beneficiary has yet to reach FRA. SSA may want to also ensure beneficiaries are aware of the implications of this withdrawal process, which may entail additional information on SSA’s website.

Table of Contents
Page

BACKGROUND 1

RESULTS OF REVIEW 4

WITHDRAWAL APPLICATION REQUIREMENTS 4

VOLUME OF WITHDRAWALS 5

REASON FOR WITHDRAWALS 7

POLICY INCENTIVES AND DISINCENTIVES 10

USE OF FEDERAL RESOURCES 11

MATTERS FOR CONSIDERATION 13

APPENDICES
APPENDIX A – Acronyms
APPENDIX B – Request for Withdrawal of Application
APPENDIX C – Flowchart of Title II Withdrawal Process
APPENDIX D – Selected Title II Retirement Policies
APPENDIX E – Scope and Methodology
APPENDIX F – Cases Related to Large Repayments of Title II Retirement Benefits
APPENDIX G – OIG Contacts and Staff Acknowledgments

Background
OBJECTIVE

BACKGROUND

SSA administers the Old-Age, Survivors and Disability Insurance program under Title II of the Social Security Act. Title II provides monthly benefits to qualified retired workers, survivors and disabled workers, as well as their eligible dependents. These benefits are based on the worker’s earnings, averaged over his or her working lifetime.

An individual’s monthly Title II retirement benefit amount can vary based on the age at which the beneficiary decides to start receiving benefits. If the beneficiary requests benefits before full retirement age (FRA), he or she will get a reduced monthly benefit. Also, if a retired wage earner waits until age 70 to receive benefits, the monthly benefit amount increases due to delayed retirement credits (DRC). See Appendix D for more information on these policies and Figure 1 for an example of how these policies impact monthly benefits.

SSA’s WITHDRAWAL POLICY

SSA policy allows beneficiaries to withdraw an application after it has been filed, provided beneficiaries consent in writing to the withdrawal and repay all the benefits received to date. When a beneficiary decides to withdraw his or her Title II application, the field office (FO) representative should explain to the beneficiary the advantages and disadvantages of withdrawing the application according to his or her situation. If the beneficiary still wants to withdraw the application, he or she completes a Request
for Withdrawal of Application (Form SSA-521) and remits all benefits already received. If SSA approves the withdrawal application, the application will be considered as if it was never filed.
RECENT MEDIA ARTICLES ON THE WITHDRAWAL PROCESS

Recent media articles have promoted the use of SSA’s application withdrawal process as a means for retired individuals to increase their benefits. One such article noted “Millions of retired Americans could substantially raise their living standards throughout retirement by sending checks for tens of thousands of dollars to the Social Security Administration.” The article also stated “Does this really pay off? Yes, if you compare the Social Security ploy with what you'd have to pay an insurance company for a similar annuity.”

Results of Review
Current SSA policy allows the withdrawal of an application for any reason. We found the Agency did not maintain detailed management information related to the number of Title II retirement application withdrawals. We estimated that Title II retirement application withdrawals in Calendar Year (CY) 2007 ranged from about 12,000 to about 26,000. Our review of withdrawal applications indicated the majority of beneficiaries withdrawing benefits are doing so prior to FRA as a result of work activity that has reduced or eliminated monthly benefit payments. We identified cases where it appeared beneficiaries were withdrawing benefits to obtain a higher benefit, though the volume was small. Nonetheless, SSA’s open-ended policy on application withdrawals allows individuals to bypass the Agency’s retirement policies that encourage delayed retirement. Moreover, the policy allows the beneficiaries to deny the Trust Fund use of these monies prior to withdrawal without being required to pay interest or penalties for the use of these Federal funds. Finally, while the number of beneficiaries using this process for their own gain may be small at this time, the workload could grow and SSA will need to decide if this is where it wants to invest its scarce resources.

WITHDRAWAL APPLICATION REQUIREMENTS

Current SSA policy does not place any restrictions on the use of the withdrawal application regarding beneficiaries’ circumstances or reasons for the withdrawal. Moreover, SSA’s publications explaining retirement policies made no mention of the withdrawal process.

WITHDRAWAL POLICY

SSA policy states all written benefit application withdrawal requests are approved, unless:

• The person requesting the withdrawal is not the claimant or the proper applicant for the claimant;
• An otherwise proper withdrawal request is filed after the death of the claimant but the Treasury Department has already certified payment;
• Benefits are not repaid (or there is no way to offset the initial benefits that will be payable on a new claim or against current benefits due other beneficiaries); or
• Required consents are not obtained.

WITHDRAWAL FORM

The Form SSA-521 provides some basic information, including the lack of appeal rights, the need to repay benefits, and how the form should be used when the “decision to file has resulted, or will result, in a disadvantage to you.” The Form SSA-521 also provides two options for the beneficiary to select when requesting the withdrawal. The options include a check box indicating (1) the beneficiary intends to continue working and (2) other – the beneficiary writes in the reason(s) for the withdrawal. Hence, a beneficiary can provide a multitude of reasons for withdrawing an application, including a desire to receive a larger benefit.

PUBLICATIONS AND THE INTERNET

We reviewed SSA’s retirement publications and website and found very little mention of the application withdrawal process. As of mid-August 2008, we found 16 publications on SSA’s website regarding retirement benefits, but none of these publications mentioned the application withdrawal process. We also reviewed the “Frequently Asked Questions” section of the website, but did not find any information on the application withdrawal process. Only by searching on the term “withdrawal” could we find a link to SSA’s Handbook Section 1515, Right to Withdraw Application. However, this Handbook section provides only basic information and does not discuss other aspects of the withdrawal process, such as the need to return amounts for any Medicare premiums paid by the Agency or the potential tax implications when repaying previously taxed benefits to SSA. The lack of SSA information on the withdrawal process, in the light of increasing media interest, allows parties other than SSA to define this process for the public. In responding to this report, the Agency agreed to pursue enhanced education for the public and SSA employees on the subject of application withdrawals.

VOLUME OF WITHDRAWALS

SSA did not maintain detailed management information related to the number of Title II retirement application withdrawals. However, we estimated that Title II retiree application withdrawals in CY 2007 ranged from about 12,000 to 26,000. At the start of the review, we asked SSA for application withdrawal data covering the 5 most recent CYs. The Agency provided summary data for CYs 2006 and 2007, as well as the first 3 months of 2008 (see Table 1). SSA provided summary management information indicating a workload of approximately 26,400 applications in CY 2007. SSA did not provide break-outs by age or Title II program.

Table 1: Title II Application Withdrawal Activity Provided by SSA1
Program Service Center2 CY 2006 CY 2007 CY 20083
Birmingham 4,169 4,397 917
Chicago 3,787 3,945 858
Kansas City 4,674 4,660 1,044
New York 5,028 4,494 880
Philadelphia 3,365 3,390 779
San Francisco 4,133 3,778 891
Headquarters4 1,490 1,710 338
Totals 26,646 26,374 5,707
Note 1: SSA’s data includes application withdrawals related to Title II retirees, survivors, Medicare-only beneficiaries and disabled beneficiaries.
Note 2: These withdrawals were handled by SSA’s Program Service Centers (PSC).
Note 3: This period is from January 2008 through the middle of March 2008.
Note 4: Headquarters includes the Office of Disability Operations and the Division of International Operations.

To confirm the Agency’s workload figures, we extracted cases from one segment of the Master Beneficiary Record (MBR) containing information indicating an application for withdrawal had been processed. For instance, our extract identified 602 beneficiaries age 62 and over who appeared to have some form of withdrawal activity related to Title II benefits in CY 2007. If we assume that our results for this segment are representative of the entire MBR, we estimate that approximately 12,000 beneficiaries age 62 and over initiated a benefit withdrawal in CY 2007.

When we spoke to SSA staff about the differences between our numbers and the Agency’s numbers, the staff noted that some of the withdrawals may have been recorded more than once since it often takes several contacts with a beneficiary to complete a withdrawal action. Staff also noted that some of the identifiers used to extract the information may not have existed for the earlier withdrawals due to changes in the system. In addition, our extract was specific to beneficiaries age 62 and over, whereas the Agency’s numbers were not age specific. Finally, our own experience with the extracted data indicated that some of the data fields in the MBR may be overwritten with time, so evidence of withdrawal activity may disappear over time.

REASON FOR WITHDRAWALS

We reviewed 50 Title II application withdrawal cases related to beneficiaries age 62 and over from one segment of the MBR to determine the reasons that beneficiaries withdraw their benefit applications. Our analysis of these cases, representing withdrawal activity between CYs 2000 and 2008, indicated that 41 beneficiaries, or 82 percent, were using this process because they continued to work and were often receiving no monthly payments and/or reduced monthly payments (see Figure 1). Specifically, we found:

• 41 beneficiaries withdrew as a result of continuing to work;
• 3 beneficiaries withdrew to acquire a higher monthly payment amount;
• 6 beneficiaries withdrew for other reasons.

Figure 1: Review of 50 Title II Application Withdrawal Cases
(CYs 2000 to 2008)

The 41 beneficiaries withdrawing due to work activity applied for benefits prior to their FRA, which led to their earnings being subject to earnings limits. Moreover, the 41 beneficiaries were receiving benefits for an average of less than 1 year before they decided to withdraw their application. While SSA would adjust the monthly benefits

payable to these beneficiaries when they reach FRA to account for those months where earnings exceeded the limits and they received a full or partial work reduction, the withdrawal process adjusts the monthly benefit amount earlier.

For example, in one case, the beneficiary applied for retirement benefits in October 2007, indicating that she would like to begin receiving SSA benefits beginning in January 2008. On January 20, 2008, she requested a withdrawal of the Title II application, indicating that she planned to continue working and would like to delay her retirement. She did not receive any SSA benefits during this period and SSA approved her withdrawal.

Of the three cases where the beneficiaries appeared to withdraw to obtain a higher benefit, only one had reapplied for retirement benefits at the time of our review. All three beneficiaries applied for benefits prior to FRA and none of the beneficiaries showed significant work activity in SSA’s records. The repaid amount on the one case was $13,866.

REPAYMENTS OVER $15,000

To determine whether SSA’s systems had evidence of large repayments of benefits by beneficiaries, we also reviewed those withdrawal cases between CYs 2000 and 2008 where a repayment of $15,000 or more was posted to the Agency’s Payment History Update System (PHUS). Of the cases we reviewed, we identified 39 withdrawal cases where beneficiaries repaid more than $15,000 to SSA. Our review indicated that 11 beneficiaries, or about 28 percent, withdrew their applications primarily to acquire higher monthly payment amounts (see Figure 2).

• 25 beneficiaries withdrew as a result of continuing to work;
• 11 beneficiaries withdrew to acquire a higher payment amount; and
• 3 beneficiaries withdrew due to other reasons.

Figure 2: Review of 39 Title II Application Withdrawal
Repayments Exceeding $15,000
(CYs 2004 to 2008)

For example, one 67 year-old beneficiary repaid $81,432 related to benefit payments from June 2003 to March 2008, and then reapplied for benefits. During this period, he did not have significant earnings. As a result of this repayment, his monthly benefit amount increased by approximately $453 per month. At the rate of $453 per month, it will take approximately 15 years for this beneficiary to recover the funds he repaid to SSA, at which time he will be about 82 years-old. See Appendix F for more information on the 11 cases where we believe the primary reason for the withdrawal was to increase the monthly benefit payments.

Given the fact that we isolated only 11 cases in one segment of the MBR where it appears Title II retired beneficiaries were repaying more than $15,000 to obtain a higher monthly payment, it does not appear at this time that a significant number of beneficiaries are taking advantage of the withdrawal process for the sole purpose of obtaining a larger monthly payment.

POLICY INCENTIVES AND DISINCENTIVES

Beneficiaries who return their benefit payments could potentially bypass the intention of SSA’s retirement policies. While SSA’s retirement policies encourage later retirement, the application withdrawal policies allow individuals to benefit from these incentives regardless of their decision to retire early.

REDUCTION FACTOR

Benefits are reduced one-half of one percent for each month an individual receives a retirement benefit before he or she attains FRA. While SSA’s communications with the public clearly state that deciding when to retire is a “personal decision,” the Agency also notes that a decision to retire early will lead to a “permanently” reduced benefit amount:

You can get Social Security retirement benefits as early as age 62, but if you retire before your full retirement age, your benefits will be permanently reduced, based on your age. For example, if you retire at age 62, your benefit would be about 25 percent lower than what it would be if you waited until you reach full retirement age (emphasis in original).

This being said, the current application withdrawal policy allows these “permanently” reduced monthly payments to be repaid and a new monthly benefit established as if the person never elected to retire early. Given the cost of repaying years worth of past benefits, it is unlikely that the average retired individual is in a position to reverse this earlier decision.

DELAYED RETIREMENT CREDITS

The DRC takes effect if an SSA beneficiary delays receiving SSA’s retirement benefits beginning at FRA and until age 70. The DRC is a percentage added to the benefit due and varies depending on the individual’s date of birth. For example, the annual rate of increase in benefits is currently 8 percent for individuals born in 1943 or later (see Appendix D). Again, this increase is intended to benefit those individuals who decide to delay retirement and forgo payments from the Trust Fund. By allowing beneficiaries to repay benefits and then reapply at a later age, SSA is providing DRCs to beneficiaries who did not actually delay their retirement.

USE OF FEDERAL RESOURCES

SSA’s policy allowing beneficiaries to withdraw their applications and repay entitlement amounts received allows the beneficiaries the use of Federal funds at a zero percent interest rate. In addition, this policy denies the Old-Age and Survivors Insurance (OASI) Trust Funds the opportunity to earn interest on those same funds. Moreover, the processing of the withdrawal applications uses resources in SSA’s FOs and PSCs.

INTEREST EARNED BY BENEFICIARY

Our review of withdrawal repayments demonstrated that beneficiaries withdrawing from the Title II program were repaying the exact benefit amounts that they received from SSA without any additional interest. As a result, these beneficiaries had use of the Federal funds for months and even years interest-free. For example, the beneficiary discussed earlier in this report who repaid $81,432 in Title II benefits received from June 2003 to March 2008 had almost 5 years’ use of Federal funds without any assessment of interest or other penalties.

INTEREST EARNED BY THE TRUST FUND

Beneficiaries withdrawing Title II benefit applications are not required to reimburse the OASI Trust Fund for lost interest. OASI Trust Fund monies are invested in Federal securities which earn interest. Hence, SSA has lost use of these monies as well as the interest that would have been earned when funds are withdrawn from the OASI Trust Fund to pay benefits to beneficiaries who later return these funds. To expand on our earlier example, a beneficiary repaying $81,432 to SSA is returning only the principal funds to SSA. The beneficiary is not repaying the interest that those same funds would have earned had they remained in the OASI Trust Fund.

SSA WORKLOAD

As noted earlier, the number of application withdrawals is not significant at this time. Nonetheless, each withdrawal application can involve FO staff explaining the withdrawal process and whether it is appropriate for the individual, PSC staff recalculating repayment amounts, and FO staff processing new benefit applications. Moreover, increasing media attention regarding the withdrawal process may lead to greater workloads in the future. This comes at a time where SSA is faced with other workload challenges. As stated by SSA’s Commissioner in February 2008,

SSA is now at a critical juncture. Due to the aging of the baby boomers, SSA is facing an avalanche of retirement and disability claims at the same time that it must address large backlogs due to years of increasing workloads and limited resources. Over the last few years as SSA offices lost staff, waiting times increased, lines grew longer, and busy rates in our field offices deteriorated.

Matters for Consideration
While SSA policy allows retired beneficiaries to withdraw their Title II benefit application, this policy also allows certain SSA beneficiaries to bypass the intent of SSA’s retirement policies. SSA’s policy on application withdrawal does not place any restrictions on its use regarding beneficiaries’ circumstances or reasons for the withdrawal. The openness of these procedures allows a loophole for those SSA beneficiaries who would like to increase the amount of their reduced benefits. Moreover, it permits SSA beneficiaries use of Federal funds at a zero percent interest rate while denying the OASI Trust Fund the opportunity to earn interest on those same funds.

For these reasons, SSA may want to modify the criteria for withdrawing Title II benefit applications and limit its use. For example, withdrawals could be limited to cases where (1) work activity has significantly reduced the amounts received by the beneficiary and (2) the beneficiary has yet to reach FRA. SSA may want to also ensure beneficiaries are aware of the implications of this withdrawal process, which may entail placing additional information on SSA’s website.

Appendices

Appendix A
Acronyms

ARF Adjustment to the Reduction Factor
C.F.R. Code of Federal Regulations
CY Calendar Year
DRC Delayed Retirement Credit

FO Field Office
FRA Full Retirement Age
IRS Internal Revenue Service
MBR Master Beneficiary Record
MEF Master Earnings File
OASI Old-Age and Survivors Insurance
OCO Office of Central Operations
OIG Office of the Inspector General
PHUS Payment History Update System
POMS Program Operations Manual System
PSC Program Service Center
Pub. L. No. Public Law Number
SSA Social Security Administration
U.S.C. United States Code
Form
SSA-521 Request for Withdrawal of Application

Appendix B
Request for Withdrawal of Application

Appendix C
Flowchart of Title II Withdrawal Process

Appendix D
Selected Title II Retirement Policies

Individuals can start Social Security retirement benefits as early as age 62, but the benefit amount received will be less than the full retirement benefit amount. If the benefits are started early, they will be “permanently” reduced based on the number of months the individual received benefits before full retirement age. This is called the reduction factor. It may be to the individual’s advantage to delay filing an application for monthly benefits if the individual has not yet reached full retirement age (FRA) and the individual wishes to wait to receive an unreduced benefit at FRA. Social Security benefits are increased by a certain percentage (depending on date of birth) if the individual retires beyond full retirement age. This is called the Delayed Retirement Credit (DRC). See Figure D-1 regarding the retirement decision choices.

Figure D-1: Retirement Date Decision

Reduction Factor: The reduction factor occurs with early retirement (retirement before FRA). The reduction factors are the number of months before FRA that a beneficiary elects to receive retirement benefits. Benefits are reduced one-half of 1 percent for each month an individual receives a retirement benefit before he or she

attains FRA. For example, the following are the monthly benefit reductions for a beneficiary whose FRA is age 67:
 62 is about 30 percent;
 63 is about 25 percent;
 64 is about 20 percent;
 65 is about 13.3 percent; and
 66 is about 6.7 percent.

Excess Earnings: “Excess earnings” occur with early retirement (i.e., from age 62 through FRA). The “excess earnings” are the beneficiary’s earnings that exceed the annual exempt amount. The annual exempt amount varies from year to year according to increases in the nationwide earnings level.

Adjustment of the Reduction Factor (ARF): The ARF occurs at FRA. The ARF determines the monthly amount payable to the beneficiary for the month in which the beneficiary reaches FRA and later months. It is made for (1) a full or partial work deduction or (2) any month the beneficiary was entitled to retirement benefits and also entitled to disability benefits.

DRC: The DRC occurs in the month of FRA and later. The DRC takes effect if an SSA retired wage earner delays receiving SSA’s retirement benefits beginning at FRA and until age 70. The beneficiary’s year of birth and the number of months retirement was delayed determine how much the benefit will increase (see Table D-1).

Table D-1: Delayed Retirement Credits by Year of Birth

Year of Birth Annual Rate of Increase in Benefit Payments
1917-1924 3.0%
1925-1926 3.5%
1927-1928 4.0%
1929-1930 4.5%
1931-1932 5.0%
1933-1934 5.5%
1935-1936 6.0%
1937-1938 6.5%
1939-1940 7.0%
1941-1942 7.5%
1943 or later 8.0%

Appendix E
Scope and Methodology

To accomplish our objectives, we:

• Reviewed applicable laws, regulations and Social Security Administration (SSA) policies and procedures, including sections of SSA’s Online Handbook and Program Operations Manual System.

• Reviewed prior Office of the Inspector General and Government Accountability Office reports.

• Requested 5 years of withdrawal application data from SSA.

• Reviewed an extract from one segment of the Master Beneficiary Record (MBR) to identify benefit application withdrawals since Calendar Year (CY) 2000 related to Title II beneficiaries age 62 and over. After analyzing this data, we also contacted system specialists in the Office of Central Operations, Region V and the Great Lakes Program Service Center to verify our numbers and potential discrepancies. Using this data, we:
 Reviewed a sample of 50 withdrawal applications from CYs 2000 to 2008 to determine the reason for the withdrawal.
 Obtained remittance data from CYs 2004 to 2008 for withdrawal applications from CYs 2000 to 2008, identified remittances greater than $15,000, and determined the reason for the withdrawal.

• Interviewed representatives from SSA’s Headquarters, Region V and Great Lakes Program Service Center components to learn more about the Title II withdrawal application process.

Due to time constraints, we did not review the internal controls related to SSA’s management and oversight of the withdrawal application process. Moreover, as stated in our report findings, we did not find SSA’s withdrawal application summary data to be reliable, though we attempted to recreate these numbers to provide a range of withdrawal activities for this report. The entity reviewed was field offices and program service centers under the Deputy Commissioner for Operations. We performed our review in Chicago, Illinois, between March and August 2008 in accordance with the Quality Standards for Inspections issued by the President’s Council on Integrity and Efficiency.

Appendix F
Cases Related to Large Repayments of Title II Retirement Benefits
To determine whether the Social Security Administration’s (SSA) systems had evidence of large repayments of benefits by Title II retired beneficiaries age 62 and over, we reviewed those withdrawal cases between Calendar Years (CY) 2000 and 2008 where a repayment of $15,000 or more was posted to the Agency’s Payment History Update System between CYs 2004 to 2008. Of the cases we reviewed, we identified 39 withdrawal cases where beneficiaries repaid more than $15,000 to SSA. Our review indicated 11 cases, or about 28 percent of the beneficiaries, withdrew their applications primarily to acquire higher monthly payment amounts (see Table F-1).
Table F-1: Title II Retired Beneficiaries Age 62 and Over Repaying
More than $15,000 to Obtain an Increased Benefit

Case Date of Full Retirement Age
Date of Application
Date of Withdrawal Time Between Application and Withdrawal
Amount to be Repaid Date Reapplied for Benefits1
1 05/2006 08/2002 04/2008 5 years, 7 months $95,449.00 N/A
2 12/2006 02/2003 03/2008 5 years, 1 month $81,432.70 03/2008
3 02/2007 04/2003 08/2007 4 years, 4 months $63,274.40 03/2007
4 09/2008 11/2004 03/2008 3 years, 3 months $49,727.40 N/A
5 03/2007 06/2004 08/2007 3 years, 2 months $45,848.50 08/2007
6 03/2003 03/2000 04/2008 8 years, 1 month $33,693.20 03/2008
7 07/2005 07/2005 09/2007 2 years, 2 months $29,524.00 06/2008
8 08/2005 01/2006 06/2007 1 year, 5 months $26,854.00 09/2007
9 09/2010 10/2006 11/2007 1 year, 1 month $19,719.00 N/A
10 06/2007 07/2003 10/2006 3 years, 3 months $18,437.50 04/2007
11 02/2006 09/2002 08/2005 2 years, 10 months $16,604.20 N/A
Note 1: Cases with “N/A” had not yet reapplied for benefits at the time of our review.

Appendix G
OIG Contacts and Staff Acknowledgments
OIG Contacts

Walter Bayer, Director, Chicago Audit Division (312) 353-0331

Annette Dunn, Audit Manager, Chicago Office (312) 886-4160

Acknowledgments

In addition to those named above:

Elizabeth Juarez, Auditor-in-Charge

Nichole Purnell, Program Analyst

Linda Smid, Auditor

Wai Ho Yung, Auditor

For additional copies of this report, please visit our web site at www.socialsecurity.gov/oig or contact the Office of the Inspector General’s Public Affairs Staff Assistant at (410) 965-4518. Refer to Common Identification Number
A-05-08-28110.

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Overview of the Office of the Inspector General
The Office of the Inspector General (OIG) is comprised of an Office of Audit (OA), Office of Investigations (OI), Office of the Counsel to the Inspector General (OCIG), Office of External Relations (OER), and Office of Technology and Resource Management (OTRM). To ensure compliance with policies and procedures, internal controls, and professional standards, the OIG also has a comprehensive Professional Responsibility and Quality Assurance program.
Office of Audit
OA conducts financial and performance audits of the Social Security Administration’s (SSA) programs and operations and makes recommendations to ensure program objectives are achieved effectively and efficiently. Financial audits assess whether SSA’s financial statements fairly present SSA’s financial position, results of operations, and cash flow. Performance audits review the economy, efficiency, and effectiveness of SSA’s programs and operations. OA also conducts short-term management reviews and program evaluations on issues of concern to SSA, Congress, and the general public.
Office of Investigations
OI conducts investigations related to fraud, waste, abuse, and mismanagement in SSA programs and operations. This includes wrongdoing by applicants, beneficiaries, contractors, third parties, or SSA employees performing their official duties. This office serves as liaison to the Department of Justice on all matters relating to the investigation of SSA programs and personnel. OI also conducts joint investigations with other Federal, State, and local law enforcement agencies.
Office of the Counsel to the Inspector General
OCIG provides independent legal advice and counsel to the IG on various matters, including statutes, regulations, legislation, and policy directives. OCIG also advises the IG on investigative procedures and techniques, as well as on legal implications and conclusions to be drawn from audit and investigative material. Also, OCIG administers the Civil Monetary Penalty program.
Office of External Relations
OER manages OIG’s external and public affairs programs, and serves as the principal advisor on news releases and in providing information to the various news reporting services. OER develops OIG’s media and public information policies, directs OIG’s external and public affairs programs, and serves as the primary contact for those seeking information about OIG. OER prepares OIG publications, speeches, and presentations to internal and external organizations, and responds to Congressional correspondence.
Office of Technology and Resource Management
OTRM supports OIG by providing information management and systems security. OTRM also coordinates OIG’s budget, procurement, telecommunications, facilities, and human resources. In addition, OTRM is the focal point for OIG’s strategic planning function, and the development and monitoring of performance measures. In addition, OTRM receives and assigns for action allegations of criminal and administrative violations of Social Security laws, identifies fugitives receiving benefit payments from SSA, and provides technological assistance to investigations.