If I Were A Beneficiary, I'd Be Setting Aside Some Money Right Now' Former SSA Commissioner Warns That Payments Could Be Disrupted Soon

Martin O'Malley, the former commissioner of the Social Security Administration, warns that Social Security payments could be at risk of disruption for the first time in the program's history. In an interview with Yahoo Finance, O'Malley advised current beneficiaries to consider setting aside some extra money in case payments are delayed.

"If I were a beneficiary, I'd be setting aside some money right now," O'Malley said. His warning comes as the SSA faces significant staffing cuts and operational challenges under changes introduced by the Trump administration.

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Staffing Cuts and Leadership Changes at SSA

The SSA recently announced plans to reduce its workforce to about 50,000 employees — down from about 57,000 today and 66,000 10 years ago — through cash buyouts and early retirement offers. The agency said these cuts would target "non-mission critical" positions, but O'Malley and other experts have raised concerns about how the reduction will affect the agency's ability to manage benefits and respond to system failures.

The Department of Government Efficiency, led by Elon Musk under the Trump administration, has been focused on cutting costs at federal agencies. According to CNBC, the resulting staffing reductions have already caused disruptions, with two major IT outages affecting Social Security operations last year.

The SSA's computer systems, which run on COBOL, a decades-old programming language, require experienced staff to maintain them. Many of the agency's tech employees are approaching retirement age, raising fears that a loss of experienced personnel could increase the risk of system failures and payment delays.

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Could Social Security Miss Payments?

Social Security has never missed a payment since the program began issuing monthly benefits over 80 years ago. However, O'Malley has said the current staffing cuts and IT challenges could lead to missed or delayed payments within the next 30 to 90 days.

"Ultimately, you're going to see the system collapse and an interruption of benefits," O'Malley told CNBC. He pointed out that SSA's outdated IT infrastructure requires regular updates to adjust for cost-of-living increases and other program changes — a process that depends heavily on experienced staff.

Marcela Escobar-Alava, the SSA's former chief information officer who resigned in January, echoed O'Malley's concerns. She said that even minor adjustments to benefit calculations require extensive testing to avoid system-wide failures. "Stuff will fail," she told Yahoo Finance. "And it's going to take time to recover. And, in some cases, if you don't have the talent, it may take days if not weeks."

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What Beneficiaries Should Know

If payment interruptions do occur, the impact could be significant. Social Security is a critical source of income for many Americans — about 21% of elderly recipients rely on the program for 90% or more of their household income, according to the U.S. Census Bureau.

Experts advise beneficiaries to prepare for potential delays by setting aside extra funds if possible. While Social Security payments are automated, changes to program rules or adjustments for cost-of-living increases require staff intervention. If staffing shortages delay these updates, it could disrupt payments.

Additionally, the SSA's ability to process new claims or respond to customer service inquiries may be affected. Processing times for disability applications, which currently average over six months, according to the Urban Institute, could grow even longer under the staffing cuts.

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Potential Long-Term Impacts

Nancy Altman, president of Social Security Works, a group that advocates for protecting Social Security, told Yahoo Finance that the planned staff reductions would "cripple" the agency's ability to function. She also expressed doubt that technological solutions like artificial intelligence could adequately replace human staff for tasks such as claim processing and customer service.

"The American public needs to understand that one of their major social safety nets is in dire jeopardy," Jill Hornick, an official at the American Federation of Government Employees union, told CNBC.

Despite these warnings, the SSA has not publicly addressed the risk of missed payments. However, O'Malley remains convinced that beneficiaries should prepare for potential delays. "I believe you will see that within the next 30 to 90 days," he said.

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