US & Canada

US stimulus cheques 'sent to dead people'

US bank notes (file image)
Image caption The report has angered critics of US government spending policies

About 89,000 cheques sent out as part of massive US economic recovery package were sent to people who were dead or in prison, a watchdog has revealed.

The stimulus payments of $250 (£157) each were intended to increase consumer spending and boost the US economy.

But about $18m went to nearly 72,000 people who were dead, according to a report by the inspector general of the Social Security Administration (SSA).

Another $4.3m went to more than 17,000 prison inmates, the report said.

The report estimates that of the payments made to people who were dead, a little more than half were returned.

It added that most of the prison inmates were eligible because they had only recently been jailed and had previously been receiving social security.

In total, about 52 million people received stimulus payments at a cost of about $13bn.

The SSA report said about 55,000 cheques went to dead people because officials had not been informed of their deaths, and another 17,000 because death records had not been properly processed.

'Lack of accountability'

The report brought an angry reaction from some US politicians, especially those critical of government spending.

"Based on the failure of the SSA to properly check its records, and Congress's failure to fully think through the provisions needed to govern these payments, SSA lost $22.3m in American tax dollars," said Republican Senator Tom Coburn.

"These findings are yet another example of Congressional stupidity and a lack of accountability."

Most of the payments were made in May 2009.

The SSA report - dated 24 September but only just released - said that although many of the cheques sent to the deceased were returned, there was no legal method to recover payments sent in error.

It recommended that in any future scheme, prison inmates should be ineligible and the government should be able to recover payments made to dead people.

Correspondents say that although it is illegal to spend social security funds intended for someone else, US authorities rarely prosecute for small amounts.

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