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Social Security Office Vows To Repay Money 700,000 Were Shortchanged Over A Period Of 22 Years

The Social Security Administration pledged Friday to speed repayments to the remainder of 700,000 Americans who have been shortchanged $850 million due to a computer programming error.

“I have told my staff to ensure that every person due a back payment receives the money he or she is due as soon as possible,” Social Security Commissioner Shirley S. Chater said Friday. “It is imperative that we act as fast as humanly possible to repay them so that all our beneficiaries get all the Social Security benefits they have earned.”

The agency has already paid out more than $350 million to people identified in a 1994 review begun after The Associated Press reported that some 400,000 Social Security recipients were owed money.

At that time, officials estimated the losses to recipients at about $480 million. They said there were as many as 426,000 elderly people whose retirement checks were shorted by an average of $10 a month for a decade.

Anxious to find any additional problems, Social Security officials expanded their computer search to include 22 years worth of databases - and found nearly 300,000 recipients who were not credited with adjustments after their post-retirement income was counted. Officials said that brought the total underpayment to about $850 million.

Although the agency has already paid more than $350 million, it may be too late for some 57,500 who have died and missed out on the benefits. Of those, the agency is having difficulty locating survivors. Under federal law, retirees are not entitled to back interest on any benefits.

The agency still hopes to identify 295,000 still-unknown retirees owed benefits.

Social Security spokesman Phil Gambino said the agency hopes to make payments to the newly identified recipients by next year.

“What we’re talking about is a small subset of a small subset of recipients,” said Gambino. “This is well less than 1 percent of all our recipients, and we will notify them.”

Recipients were paid less than they were due because of a computer system used by the administration failed to property adjust benefits to reflect post-retirement income.

The error was coded into the system in 1972 and went undetected for 22 years. The agency’s inspector general and its Office of Integrity first discovered the error during a 1994 review.

Officials said they will send letters to those who are owed payments, detailing amounts. Individuals who were shortchanged will get checks covering back benefits, and their regular monthly benefits will increase as well.

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