WRAL Investigates

NC Treasurer's Office estimates $24M in benefit overpayments

Posted March 1, 2011 6:00 p.m. EST
Updated March 1, 2011 6:55 p.m. EST

— The state Treasurer’s Office estimates it has overpaid about $24 million in benefits over the past five years, and the biggest chunk is in one category.

When the state and federal governments both pay toward an individual's disability benefits, the total must still not exceed 65 percent of what the individual made before they became disabled. If the total outlay is greater, the individual ends up owing the difference.

In most cases, it is the state left chasing the IOU because state money is available quicker.

Tim Sturges was collecting disability benefits from the state before his military benefits kicked in. When they did, he had to pay back $12,600 to the state – $336 is taken out of his retirement check every month to pay the debt.

Attorney Michael Bertics represents people on disability and said part of the state’s problem is communication.

“State disability tends to turn on a lot earlier than Social Security,” he said. “I have one client who has been trying to tell them what the overpayment is for two years.”

State Treasurer Janet Cowell said she has been trying to strike a balance between a state law that helps people immediately and losing precious cash.

“The negative part is, it’s a system of trust, and when that person gets that Social Security payment, they are informed and some of that money is due back to the state as an offset,” she said.

Elected in 2008, Cowell says she inherited a system that started looking for overpayment problems just a few years earlier.

“We’re detecting more of these, which in the past would’ve gone undetected,” she said.

The Treasurer's Office has $18 million outstanding total, across all years and all programs. The office has been collecting, though, and estimates it has received $28.4 million since 2005. Some of that is from money owed or mistakes made more than five years ago, according to the Treasurer’s Office.