How much has improper payments or identity fraud cost the Social Security system recently?
Executive summary
Recent reporting and SSA/OIG documents show Social Security made nearly $72 billion in improper payments (mostly overpayments) across fiscal years 2015–2022 and that improper payments have been a recurring, long‑running problem as SSA paid roughly $1.5–$1.6 trillion in benefits in recent years (FY2024 and 2025 figures cited by SSA/OIG and outlets) [1] [2] [3]. Available sources also flag identity‑fraud and synthetic‑identity risks—estimates vary from hundreds of millions tied to specific synthetic‑ID incidents to more than $100 million a year SSA says it loses to direct‑deposit fraud [4] [5] [6].
1. Improper payments: headline totals and time frame
The Social Security Office of Inspector General (OIG) has said the agency issued nearly $72 billion in improper payments — largely overpayments — during fiscal years 2015 through 2022, a figure repeatedly cited in national coverage [1] [7]. The OIG frames improper payments as a persistent, systemic management challenge that spans automated processes and beneficiary self‑reporting failures [1].
2. Scale relative to total benefits paid
Those improper payments, while large in dollar terms, amount to under 1% of total benefits paid in the cited period: reporters note improper payments were less than 1% of roughly $8.6 trillion paid in benefits during FY2015–2022, and SSA paid over $1.5 trillion in benefits in FY2024 and about $1.6 trillion in 2025 totals cited by outlets [7] [1] [2] [3]. The OIG emphasizes prevention is preferable to recovery because recovery itself consumes agency resources [2].
3. What’s unpaid: the recovery gap
Of the nearly $72 billion identified as improper from 2015–2022, SSA had collected much but still reported multibillion‑dollar shortfalls: news outlets and OIG materials cite about $23 billion in uncollected overpayments as of September 2023 [7] [8]. The persistence of uncollected debt has driven SSA policy shifts to tighten recovery and withholding [7] [3].
4. Policy shifts and public impact
SSA changed automatic recovery rules multiple times in 2025: it briefly moved to reinstate 100% withholding for new overpayments (effective for payments after March 27, 2025), then reduced the default for many Title II cases to 50% for new notices issued on/after April 25, 2025, while keeping SSI withholdings at 10%—coverage by SSA and reporters documents these shifts and accompanying agency explanations about stewardship of trust funds [9] [10] [11] [7]. Advocates and news outlets warn large withholdings can devastate vulnerable beneficiaries, while SSA leaders argue stronger recovery protects taxpayer funds [10] [12].
5. Identity fraud and synthetic identities: separate but related costs
Identity‑based fraud and synthetic‑identity schemes are treated as a related but distinct threat. GAO and reporting note SSA developed an electronic verification service (eCBSV) to help banks fight synthetic identity fraud; the agency spent about $62 million building it but still faces roughly $37 million in unrecovered costs due to low participation [5]. The Financial Crimes Enforcement Network reported 3,000 suspicious synthetic‑identity reports in 2021 amounting to roughly $182 million in possible fraud—an illustrative, sectoral estimate, not an SSA loss total [4].
6. Direct‑deposit and operational fraud estimates
SSA officials told reporters the agency loses “more than $100 million a year” to direct‑deposit fraud, a line that appears in Federal News Network coverage and is attributed to acting leadership statements [6]. This figure points to targeted operational fraud (account takeover, diversion) rather than programmatic improper payments driven by misreporting or calculation errors [6] [13].
7. Where reporting agrees and where it diverges
Sources consistently identify: (a) nearly $72 billion in improper payments across 2015–2022 [1]; (b) significant uncollected overpayments—about $23 billion as of 9/2023 [7]; and (c) fraud and synthetic‑ID mitigation efforts that have costs and mixed results [5] [4]. Reports diverge on framing: SSA press pieces emphasize prevention, customer protections and policy reversals to avoid undue harm [12] [14]; watchdogs and media stress long‑standing unimplemented recommendations and continuing vulnerabilities [1] [5].
8. Limitations in available reporting and unanswered questions
Available sources do not provide a single, consolidated recent dollar total that separates improper payments caused by administrative error, beneficiary misreporting, identity theft, or outright fraud for FY2023–FY2025; they instead give multi‑year aggregates, recovery balances, and estimates for particular fraud types [1] [7] [5]. Precise current annual loss figures attributable specifically to identity theft across SSA programs are not reported in the supplied documents; available sources do report specific items like the $100M+ direct‑deposit fraud comment and synthetic‑ID incident estimates [6] [4].
9. What to watch next
Track OIG and GAO follow‑ups, SSA’s payroll‑data exchange rulemaking intended to reduce wage‑related improper payments, and implementation metrics for eCBSV or other verification tools; these initiatives are the agency’s primary levers to shrink improper payments and identity‑related losses [14] [5]. Also watch whether Congress or plaintiffs press changes if recovery policies produce major hardship, since media and advocacy groups are already highlighting that risk [10] [12].
Sources cited: OIG and SSA reports and press pieces, national coverage and GAO analysis as noted above [1] [7] [2] [3] [9] [11] [10] [8] [14] [4] [5] [6].