Disability Payments: The Latest Example of Government Waste?

Around 1,500 federal employees may have improperly received Social Security benefits, according to a new report from a government watchdog obtained by ABC News.

The Social Security Administration is supposed to provide for those who cannot provide for themselves. It is supposed to deliver benefits to people with disabilities who are unable to work. However, at the request of Senators Tom Carper, D-Delaware, John McCain, R-Arizona, and Tom Coburn, R-Oklahoma, the Government Accountability Office (GAO) investigated to see if the SSA was doing its job effectively. In its latest report, the GAO highlights 20 cases in which federal workers either fraudulently claimed and received disability payments or notified the Administration they were back to work but continued to receive benefits.

One beneficiary was a Transportation Security Administration screener who worked in California. In 1995, she was approved for disability payments for mood and anxiety disorders. Fast-forward eight years to when she began full-time employment as a screener, but failed to report the disqualifying change in employment status to Social Security. According to the report, SSA requested a Work Activity Report in 2005 and got no response, but continued to make payments. She continued receiving payments to the tune of $108,000 over 19 years and currently lives in a house that is listed for sale at about $1.8 million.

The GAO provides undercover footage with its report that highlights workers who fraudulently claimed disability benefits. All of them failed to notify the SSA they had returned to work, a requirement if they receive Disability Insurance.

In one such case, a postal worker who receives $23,000 in disability benefits for mood disorders is shown carrying her heavy mail bag and unloading it onto a table. This particular worker was awarded Disability Insurance beginning in 2006 for a brain tumor. Although she returned to work in 2007, she did not report her change in employment status to SSA. When the agency investigated and discovered the beneficiary had in fact been dishonest about her working status, she was informed she would be required to pay back $19,000 in benefits. She agreed to pay $100 a month. She admitted she will probably be dead before she pays back all she owes.

Social Security: Report Cites 1,500 False Claims by Government Workers

Another case involves a letter carrier who received $45,000 in disability funds before she was caught for not contacting the agency as required. She can be seen in the GAO's undercover footage delivering mail to houses on foot with no obvious immediate problem.

In all, the 1,500 federal employees cited in the report received approximately $1.7 million a month in payments -- 1,097 of them from the Disability Insurance program, 306 from the Supplemental Security Income program, and the remaining 87 from a combination of the two.

In 2008, the Disability Insurance program paid out around $104 billion in financial benefits to some 9 million beneficiaries, with the Supplemental Security Income program giving $38 billion to about 7.5 million recipients.

In response to the GAO report, the Social Security Administration's Michael Astrue told the watchdog that the agency is "concerned that your overall message is misleading and in some cases factually incorrect."

Astrue said the title of the GAO report – "Cases of Federal Employees and Transportation Drivers & Owners Who Fraudulently and/or Improperly Received SSA Disability Payments" – may be "an overstatement and raise unwarranted concerns that there is widespread fraud in this area."

Astrue said that "curbing improper payments" was the first objective in the agency's 2008-2013 Strategic Plan Goal to "preserve the public's trust in our programs."

Jonathan Karl contributed to this report.