A new audit released in June 2026 by the Social Security Administration’s (SSA’s) Office of the Inspector General (OIG) found that SSA employees and systems made errors in the vast majority of administrative sanction cases reviewed. The audit, Administrative Sanctions and Benefit Withholding (Report No. 042303), reviewed a stratified random sample of 225 individuals referred for potential sanction between June 1, 2017 and May 31, 2022, and found errors in 168 of those cases – 75 percent of the sample.
What Is an Administrative Sanction?
SSA may impose an administrative sanction (i.e. a suspension of current or future benefits) when an individual commits fraud, makes a false or misleading statement, or fails to report information material to determining eligibility, continuing eligibility, or benefit amount for Social Security Disability (SSD) or Supplemental Security Income (SSI). If the individual is not currently receiving benefits when a sanction is approved, SSA is required to defer the sanction and apply it whenever the individual later becomes entitled to benefits.
Separately, if the sanctionable conduct also created an overpayment, SSA is required to recover that overpayment. Critically, when fraud or “similar fault” contributed to the overpayment, SSA policy requires full withholding of the individual’s benefit to recover the debt. Partial withholding is not permitted in those cases.
What the Audit Found
Based on the sample results, OIG estimated that SSA made processing errors affecting 1,921 individuals, resulting in improper payments to an estimated 454 individuals totaling $49.6 million. OIG separately estimated that SSA made documentation errors affecting 3,532 individuals — meaning SSA could not adequately support how or why a sanction decision was made, which matters directly for any individual who later disputes SSA’s action.
Why This Matters for Advocates
Improper sanctions may still be affecting current clients. Because deferred sanctions have no time limit, a sanction approved years ago, even one improperly documented or based on incomplete process, can surface at any time once a client becomes newly entitled to benefits. Advocates whose clients have benefits suddenly suspended, or who receive notice of a sanction being imposed long after the underlying conduct, should request the complete sanction file, including the SSA-553 determination, any Regional Sanctions Coordinator (RSC) review, and the notices sent, and should scrutinize whether the sanction months, duration, and appeal-rights timeline were correctly calculated.
Given that SSA could not adequately document sanction determinations in 62 percent of sampled cases, advocates representing clients contesting a sanction should specifically request the underlying Form SSA-553 or Report of Contact documentation, the AS Tool case record, and copies of all notices sent. Where SSA cannot produce adequate documentation to support a sanction, that gap may be a basis for challenging the sanction itself.
Advocates should be alert to clients who received a benefit suspension notice containing appeal language after already receiving and not appealing an initial sanction notice. The audit confirms this is a known, widespread systems error, and clients should not be penalized or confused by conflicting notices.
Where SSA is pursuing full benefit withholding based on a fraud or similar-fault determination tied to a sanctionable event, or conversely where a client believes SSA should have pursued a smaller partial withholding, advocates should request documentation of how and when the similar-fault determination was made and whether it was properly linked to the sanction case file.
SSA’s Response
Notably, SSA agreed with all seven of OIG’s recommendations, which include reviewing and correcting the specific cases identified in the audit, updating sanctions policy to reflect a new version of its internal Administrative Sanctions Tool (released March 2025), building system alerts to prevent incorrect sanction months and missed deferred-sanction impositions, and revising procedures to ensure fraud and similar-fault determinations are properly linked to overpayment recovery actions. However, SSA has not yet updated many of its underlying POMS sections to reflect these planned changes as of the audit’s release.
