Social Security Glitch That Took Decades to Discover

The Social Security Administration is in the process of rectifying a mistake that over nearly a quarter of a century cost up to 700,000 retirees more than $850 million in benefits. The losses were sustained by retirees who continued to work after they began collecting monthly benefits. Because of a computer coding error made in 1972, some weren’t credited with post-retirement income when their benefits were calculated. As The Times reported last week, more than 400,000 retirees have so far received corrective payments totaling nearly $400 million. An additional 295,000 are entitled to the payments, on average about $1,500. At this point the Social Security Administration isn’t sure how many of them are alive, nor is it having an easy time finding survivors.

The computer glitch is thought to be the most costly single mistake ever in the system, but it would go too far to take it as typifying how Social Security works. Operation of the system is governed by 47 volumes of regulations and laws, and benefit formulas for individuals are sometimes based on numerous major and minor distinctions. Last year 43 million Americans received Social Security benefits under the old age, survivors and disability insurance programs, among them 26 million retirees. The computer software mistake, made in 1972, should have been caught much earlier than it was, in 1994. But the wonder is that, given the system’s size and the complexity of the rules, the Social Security Administration on the whole does manage to get most things right most of the time. It’s by no means flawless, but it can justifiably claim a high level of accuracy and efficiency.

To be sure, it hasn’t been getting a lot of help lately from Congress. Over the last five years, money sought for computer modernization has been cut below requested levels. Congress has similarly stinted on the Internal Revenue Service as the IRS has sought to increase its ability to respond to a growing workload.

Shortchanging the modernization needs of agencies like the Social Security Administration and the IRS is false economizing, and just plain dumb. The immediate results may look ephemerally good on the budget’s bottom line, but in the end the practical consequences are costly.