The Social Security Administration failed to notify 82 percent of current beneficiaries who are entitled to survivor benefits and their own retirement benefits that they would have received a higher monthly benefit amount if they delayed their retirement application until age 70.
That’s the finding of an audit by the program’s Office of Inspector General, according to a blog post by Mary Beth Franklin in Investment News.
The watchdog “focused on widows and widowers who are being underpaid,” Franklin wrote. “It identified 13,564 widows and widowers who are currently receiving survivor benefits and who were dually entitled to widow's or widower's benefits and retirement benefits before age 70.”
The office selected a random sample of those 50 beneficiaries and found that 41 of them were eligible for a higher monthly benefit amount had they delayed their retirement application until age 70.
Retirement benefits rise by 8 percent a year for every year they are delayed beyond full retirement age up to age 70. Survivor benefits do not.
“The audit report estimates that SSA underpaid about $131.8 million to 9,224 beneficiaries who were age 70 and older,” Franklin wrote. “In addition, the report estimates SSA will underpay an additional 1,899 beneficiaries who were under age 70 about $9.8 million annually beginning in the year they attain age 70.”
In one case, a widow was found to have been underpaid by $13,000 from August 2015 to September 2017. Had she delayed filing for a retirement benefit until age 70, should would have received $52,700 for the period instead of $39,700.
"SSA employees must explain the advantages and disadvantages of filing an application so claimants can make an informed filing decision," the audit report said. "SSA employees must discuss and document any unfavorable filing decisions, such as filing an application for retirement benefits when it would be advantageous to delay the application. If a claimant applies for benef its even though it is not in his/her best interest, SSA employees must document the facts and decision in its automated system."
The report concluded that the government-run program needs to improve how it informs widows and widower of their ability to delay their application for retirement benefits to get a more favorable payout.
“It recommended that the agency take appropriate action for the 41 beneficiaries who were identified in the audit and determine whether it should review the remaining population of more than 13,500 dually eligible survivors who may have been underpaid,” Franklin said. “SSA agreed with all of the report's findings.”
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