Computer glitch costs $850 million in benefits

The Social Security Administration pledged to speed repayments to the remainder of 700,000 Americans who have been shortchanged $860 million due to a computer programming error.

In 1994 the agency discovered that some 400,000 elderly people had retirement checks shorted by an average of $10 a month for over a decade. Subsequently they expanded their search to include 22 years worth of databases and found nearly 300,000 more recipients who were not credited with adjustments after their post retirement income was counted.

The task of returning the funds is complicated by the fact that some 57,500 people have died and missed out on their benefits. In addition, some 295,000 retirees are still to be identified.

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

The error was coded into the system in 1972 and went undetected for 22 years.


Article date circa 1995