The Social Security Administration mistakenly declares thousands of U.S. citizens dead every year.
By entering one number into the system incorrectly, a Social Security employee can bring your whole world crashing down, as the blog Priceonomics writes in a new post on the subject. People who have been mistakenly declared dead may be unable to apply for jobs, access bank accounts or credit cards, or rent or buy new homes. Their disability, Medicare or Medicaid benefits may cease. Their pension plan and insurance may be terminated. They may be left without access to housing and the medications they need. They basically can end up like Tom Hanks in “The Terminal,” wandering around in terrible liminal state of boredom and frustration, except without Catherine Zeta Jones for company. And they and their family members must jump through a series of bureaucratic hoops to prove that they are still alive.
This experience isn’t common, but it’s also not insignificant. An audit by the Office of the Inspector General of the Security Security Administration in 2011 showed 36,657 living people were incorrectly declared dead between May 2007 and April 2010. That's more than 12,000 people per year. Priceonomics mapped that data by state below:
Newer figures show that the problem is getting a little better. According to testimony that a Social Security Administration official gave before Congress in March, about 9,000 of the death reports they receive per year "are subsequently corrected."
As of press time, the Social Security Administration had not responded to an e-mail seeking comment.
Like those who are actually dead, those who are falsely declared dead can be subject to identity theft, creating another bureaucratic mess to untangle once their identity is restored. When someone is declared dead, their name, birth date, address and Social Security number are listed in the Social Security Administration’s “Death Master File,” a database of the personal information and Social Security numbers of more than 86 million Americans who have died since 1980. That information was made public in 1980 because of a Freedom of Information Act lawsuit.
The Social Security Administration provides a public version of the Death Master File to the Department of Commerce, which then sells the data to public and private entities, which often use the data to verify deaths and prevent fraud, according to the SSA. The administration also sends the information to nine federal agencies that pay benefits, including Medicare & Medicaid and the IRS.
But in the interim period between when your Social Security Number is listed in the file and your records are wiped out of existence, an identity thief can use that information to file fraudulent tax returns and collect government money -- for example, by claiming recently deceased children as dependents, according to a NPR report last year. In 2014, Congress limited access to the Death Master File in an attempt to crack down on the financial waste and identity theft that results.
Erroneous deaths and fraud are not necessarily the Social Security Administration's fault. Of the 2.8 million new death reports that the administration adds to its records each year, only about 0.35 percent are erroneous, according to Sean Brune, a senior adviser at the Social Security Administration. Medicare, Medicaid and the earned income tax credit account for a much larger share of improperly spent government money -- about two-thirds of all improper payments.
Others point out that the Social Security Administration was never designed to get into the death business -- it just gradually became the primary source of information for credit reporting agencies, banks, and other groups. The administration still claims that its only job is to make sure the list is accurate for its own purposes, not everyone else's.
Part of the problem is that reports of death arrive to the administration from thousands of sources of varying reliability across the country, including funeral homes, banks, family members and the Veterans Affairs office. For more unreliable sources, the administration tries to confirm that the beneficiary is dead before stopping government payments. "SSA does not receive death information for all individuals, thus SSA does not guarantee the [Death Master File's] completeness," the Inspector General of the Social Security Administration said in a Congressional hearing in March.
And there is a flip side to this debate. Some people argue that the reverse situation – people who actually die and are not declared dead by the Social Security Administration -- is a more serious issue. Social Security numbers that are not retired quickly become fodder for all kinds of fraud. An audit in March identified 6.5 million Social Security number-holders in the U.S. who are 112 years old or older. Obviously, very few of these people are still alive.
The audit concluded that thousands of these Social Security numbers could have been used to commit identity fraud. As of March, the agency had caught 67,000 Social Security numbers of both living and dead people that were used to report more than $3 billion in wages, tips and self-employment income between 2006 to 2011. But that's probably just a small proportion of the fraud.
There are some simple bureaucratic things that might be able to be done to help fix these problems. As of March, 37 states and the District of Columbia reported deaths to the administration electronically, which greatly increases the speed and accuracy of death reports. By implementing electronic reporting across the U.S., the states could almost totally eliminate the twin catastrophes of declaring the dead living and the living dead.