WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), a member of the Senate Finance Committee, introduced bipartisan legislation with Senate and House colleagues today to help save millions of federal dollars by curbing erroneous federal payments to deceased individuals.  

Government Accountability Office watchdogs estimate federal agencies disbursed nearly $125 billion in improper payments to ineligible recipients last year. A recent investigation by CBS News’ 60 Minutes reported that more than $1 billion in farm subsidies and disaster aid was paid to 170,000 dead people over a six-year period. And the Office of Personnel Management Inspector General found just four years ago that $601 million in improper payments were made to federal retirees found to have died over the previous five years. 

“A simple thing like doing a better job keeping track of who’s dead and who’s alive can save taxpayers hundreds of millions, if not billions, of dollars by stopping fraudulent payments to the deceased,” said Sen. Warner. “This bill is just common sense. If we’re going to get serious about improving our nation’s fiscal health, we have to cut down on waste, fraud and abuse due to these kinds of avoidable errors.”

The Stopping Improper Payments to Deceased People Act was introduced today by Sen. Warner, Senate Homeland Security and Governmental Affairs Chairman Sen. Ron Johnson (R-WI), Ranking Member Sen. Tom Carper (D-DE), Sen. Dan Coats (R-IN), and Sen. Cory Booker (D-NJ). Companion legislation was also introduced in the House of Representatives by Reps. Cheri Bustos (D-IL) and Reid Ribble (R-WI), along with 22 additional co-sponsors.

The Social Security Administration (SSA) maintains the most complete federal database of individuals who are reported to have died. However, only a small number of federal agencies have access to this official list, and most federal agencies rely on a slimmed down, incomplete and less timely version of the death information. In addition, most Inspectors General lack access to the complete death information database. As a result, many federal agencies make erroneous payments to people who are actually deceased.

The legislation builds upon recently enacted improper payment laws by allowing and requiring federal agencies to use more accurate and complete lists of deceased individuals to confirm payment eligibility.

Key provisions include:

Allowing Federal Agencies Access to the Complete Death Database. Under current law, only agencies that directly handle beneficiary payments may have access to the complete death data. The Act allows all appropriate federal agencies to have access to the complete death data for program integrity purposes, as well as other needs such as public safety and health.

Requiring Use of Death Data to Curb Improper Payments. The Act would require that federal agencies make appropriate use of the death data in order to curb improper payments.

Improving the Death Data. The legislation establishes procedures to ensure more accurate death data.  For example, in response to a recent Inspector General report, the Act requires the SSA to screen for individuals currently listed as being older than 112 years of age, and make corrections. The Act will also mandate much improved procedures for fixing errors by living beneficiaries who are mistakenly listed as dead.

The SSA Office of the Inspector General reported last month that, according to the agency’s own records, there are 6.5 million people who have active Social Security numbers who are 112 years of age or older. In reality, there are only a few dozen people known to be that old in the entire world.

People often use fake or stolen Social Security numbers to get jobs and report wages, and thieves can use stolen Social Security numbers to claim fraudulent tax refunds. The Internal Revenue Service (IRS) estimated it paid out $5.8 billion in fraudulent tax refunds in 2013 because of identity theft. Sen. Warner has repeatedly pressed the IRS on its efforts to address and prevent instances of this fraud due to identity theft. Last week, Sen. Warner wrote to IRS Commissioner John Koskinen to find out more about procedures in place to help taxpayers who have been victims of identity theft, and what might be done going forward to proactively alert taxpayers identified as possible victims of identity theft.