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Thousands of Healthy Workers Still on Disability: GAO

A Government Accountability Office report to be released Wednesday will reveal that thousands of federal and private-sector employees nationwide may be committing fraud by collecting disability benefits from the federal government when they’re perfectly healthy and working full-time jobs.

Postal worker
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Postal worker

In the report, the GAO found that 1,500 people improperly collected disability payments even though they had federal government jobs.

In addition, 62,000 private-sector employees in 12 states were healthy enough to get licenses to drive trucks or buses, even as they were collecting disability payments.

All in all, in 2008, workers owed the government $10.7 billion for overpayments that were made by the Social Security Administration.

Both federal programs for disability—Disability Insurance and Supplemental Security Income—have enforcement procedures to check up on workers and make sure they don't have earnings that would disqualify them from disability.

However, the GAO found that the number of enforcement reviews is low, and that the Social Security Administration could be doing more data mining to find people in their disability system who are actually employed.

CNBC obtained exclusive hidden camera video that was recorded by government investigators of employees who showed up for work even though they were collecting disability.

One video shows a TSA employee on the job in California. The GAO says she committed fraud, raking in more than $100,000 in improper payments. In fact, investigators found that she’s far from impoverished; she lives in a house that’s on the market for $1.8 million.

In another video, a post office clerk in Pennsylvania can be seen at work too. The GAO says she committed fraud, and told investigators she knew she was supposed to tell the Social Security Administration that she had a job, but didn’t because she needed the money.

And a letter carrier in Michigan is seen making her rounds even after she received $45,000 in disability overpayments. She returned to work in 2004, and said her condition does not keep her from working.

Generally, people are expected to notify the government when they go back to work and begin earning more than the threshold amount of money.

Overall, the GAO said that the 1,500 federal employees collected a total of $1.7 million each month. And they found that one employee collecting improper payments worked at the Social Security Administrationitself.

Despite the hidden camera evidence of fraud, the Social Security Administration, which sent out the improper payments, is lashing back at the report.

"The GAO study is hopelessly flawed. It has no useful data, and has no actual recommendations for change," said Michael Astrue, Commissioner of Social Security in a statement to CNBC.

Astrue will testify before a Senate subcommittee to explain his take on the report Wednesday afternoon.

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