Social Security may have underpaid student beneficiaries by about $59.5 million, report finds

Personal Finance

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About 14,470 students may have been underpaid $59.5 million in Social Security benefits, according to estimates from the Social Security Office of the Inspector General in a recent audit.

The organization, which provides independent oversight of the Social Security Administration’s programs and operations, conducted an investigation to determine whether the government agency continued providing benefits to children who reach age 18 and still attend school.

In a sample of 100 students, 87 of them did not have their benefits continue as they should have once they turned 18, the investigation found. This resulted in $357,872 in underpayments.

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Based on those findings, the Social Security Office of the Inspector General estimates the agency underpaid 14,470 beneficiaries about $59.5 million.

In addition, it provided recommendations for how the SSA can better ensure those beneficiaries receive the money to which they are entitled. The SSA has agreed with the recommendations, according to the report.

Children who are younger than 18 and unmarried may qualify for Social Security benefits if their parents receive disability, retirement or survivor benefits under the program.

Once they reach age 18, they may still be eligible for benefits if they are students or have a disability. To qualify as students, they must attend an educational institution at least 20 hours per week to be considered full time. In addition, they must be age 19 and two months or younger.

The students were overlooked due to a lack of controls in the SSA’s systems that manage information on the beneficiaries, as well as a lack of alerts instructing Social Security employees that benefits were still due to the students, the report found.

The Social Security Office of the Inspector General has recommended the agency update those systems and create alerts.

It also recommends Social Security take corrective action for the 87 beneficiaries it identified in its investigation, as well as the remaining population of 16,632 beneficiaries who could be affected. In addition, it calls for training Social Security employees to input information correctly so eligible students continue to receive benefits after they reach age 18.

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