Treasury Department recoups $31 million in improper government payments to dead people

The Treasury Department announced this week that it had recouped more than $31 million in fraud and improper payments to dead people during just five short months of having access to the Social Security Administration’s (SSA) federal death database. 

The Treasury Department issues billions of payments every year, including benefit payments, federally funded state-administered payments and other miscellaneous payments. Sending those funds and others by accident to people who are dead has been a long-standing problem within the federal government, according to fiscal watchdog group OpenTheBooks

In 2020, the Government Accountability Office estimated that during the first round of COVID-19 stimulus checks, $1.4 billion was sent to dead people. Across all three rounds of stimulus checks during the pandemic, nearly $3.6 billion went to dead people, according to OpenTheBooks.

The SSA is the only government agency with a database that records the deaths of U.S. citizens. In 2023, as part of an omnibus appropriations bill, Congress granted access for the Treasury Department, on a temporary basis, to have access to the database to help prevent improper payments to dead people. The temporary basis is set to expire in 2026.

‘While this should have been a no-brainer for a long time, it’s promising to see some taxpayer funds being recouped with basic communication among executive agencies,’ said John Hart, executive director of OpenTheBooks. ‘Too often the left hand just doesn’t know what the right hand is doing, and it’s resulted in trillions of dollars in improper payments.’

Hart blamed the nearly $4 billion in COVID-19 stimulus payments sent to dead people on the Internal Revenue Service’s failure to check the SSA’s death database. 

He also pointed out how, in addition to improper payments through the stimulus check program, the Small Business Administration also sent more than $3 billion more to dead people in the form of forgivable loans ‘to entities on the Treasury Department’s ‘Do Not Pay’ list.’

‘Today’s news is a step in the right direction, but there are miles to go before we break even,’ Hart said.

After news of the recovered payments was announced, Fiscal Assistant Secretary David Lebryk noted that the results were ‘just the tip of the iceberg.’

‘Congress granting permanent access to the Full Death Master File will significantly reduce fraud, improve program integrity, and better safeguard taxpayer dollars,’ he said.