Employees of the Social Security Administration have been asleep at the wheel when advising widows and widowers of the enhanced benefits that come with delaying claims to full retirement age, according to a report from the agency’s Inspector General.
According to the report, an estimated 11,123 beneficiaries were eligible for higher benefits had they delayed claims until age 70.
The misinformed filings resulted in about $131.8 million in underpayments to beneficiaries age 70 and older, and another $9.8 million in annual payments for those under age 70.
“SSA policy states its employees must explain the advantages and disadvantages of filing an application and the filing considerations so the claimant can make an informed filing decision,” the IG’s report says.
But the agency’s employees did not meet those obligations. “We did not find any evidence in the agency’s automated system to support the claimant’s decision to elect to file for retirement benefits, as required,” the report added.
The report also found that SSA did not have controls in place to alert employees as to when delaying benefits was in applicants’ best interest.
The findings in the report were based on a sample of 50 beneficiaries, 82% (41 individuals) of whom were eligible for a higher monthly benefit had they delayed claiming the retirement portion of their benefits until after age 70.
For the seven beneficiaries under age 70 that inadvisably claimed early in the SSA’s sample, the loss in benefits will be substantial. Upon reaching age 70, the average loss in benefits will be $5,185 annually.