Federal Overpayments Hit $186 Billion in 2025
The federal government overpaid welfare and social services recipients by $186 billion in fiscal year 2025, a $24 billion increase from the previous year.
According to the Government Accountability Office (GAO), 15 federal agencies accounted for the improper payments across 64 programs, with about 82% tied to overpayments. These figures only reflect mistakes the government identified, not outright fraud such as the billions alleged in Minnesota.
The findings come as a fraud task force led by Vice President JD Vance pressures states, including New York, to crack down on fraud or risk losing federal funding.
Medicare accounted for the largest share at $57 billion. The program, second only to Social Security in size, has a budget of nearly $1.1 trillion. Medicaid errors totaled $37 billion, while $21 billion in Earned Income Tax Credit payments went to ineligible recipients. SNAP recipients received $10 billion more than they should have, and the pandemic-era Shuttered Venue Operators Grant Program also overpaid by $10 billion. The remaining 59 programs accounted for $51 billion.
GAO estimates the federal government has overpaid roughly $3 trillion since 2003, though the true figure could be far higher. The agency said pandemic-era expansions between 2020 and 2023 sharply increased the risk of fraud and improper payments.
The $186 billion total excludes some high-risk programs, including the Department of Health and Human Services’ Temporary Assistance for Needy Families (TANF), which spent about $16.5 billion in FY2025. GAO also noted that of 10 accountability recommendations submitted in March 2022, only one had been acted on as of April 2026.
