Social Security Underpaying Widowed Spouses, Report Finds

A new audit from the Social Security Administration's (SSA) Office of the Inspector General (OIG) found 82 percent of widows and widowers entitled to spousal benefits are being underpaid, reports Financial Advisor . The agency failed to notify widowed spouses that they can claim survivor benefits while still delaying their own benefits until age 70. "Based on our random sample of 50 beneficiaries, we estimate 11,123 would have been eligible for a higher monthly benefit amount had they delayed their retirement application for their own benefits until age 70," OIG noted. "Of these, we estimate SSA underpaid about $131.8 million to 9,224 beneficiaries who are now age 70 and older." The audit determined although it is up to eligible claimants to ascertain whether they want to take benefits before age 70, "SSA needs to improve controls to ensure it informs widowed beneficiaries of their option to delay their application for retirement benefits." When they apply for those, it is automatically viewed by the SSA as an application for both benefits. In nearly all cases, agency employees did not inform claimants of their age-based options and the growing benefits available for each year the claimants waited to apply. "We did not find any evidence SSA had informed claimants of the option to delay their retirement application when they applied for benefits, as required," OIG said. "We also found that SSA did not have systems controls in place to alert its employees when they should inform widows of their option to delay their applications for retirement benefits."