NAMI E-News June 25, 2002 Vol. 02-79
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SSI and SSDI Reforms Passed
House Passes Measure To Reform Social Security Representative Payee
Program, Changes Proposed for Beneficiary Earnings Reports
On June 25th, the U.S. House of Representatives approved legislation to create
new protections for SSI and SSDI beneficiaries who rely on Representative Payees
to receive and manage their disability benefits. The legislation (HR 4070) would
compensate SSI and SSDI beneficiaries in cases of theft committed by
Representative Payees by requiring the Social Security Administration (SSA) to
reissue misused benefits. This new protection is a vast improvement over
standards in current law that allow SSA to reissue benefits only in cases in
which a beneficiary can prove that the agency negligently failed to investigate
or monitor a Representative Payee (a difficult, if not impossible, case to
make).
Under current laws and policies governing the Supplemental Security Income (SSI)
and Social Security Disability Insurance (SSDI) programs, beneficiaries with
mental impairments (including severe and persistent mental illness) usually have
Representative Payees appointed to receive and handle their monthly benefit
checks. In some cases, family members serve as Representative Payees. However,
in many instances non-governmental organizations (i.e., public guardian offices,
community mental health centers, clubhouses, or even for-profit companies) serve
as Representative Payees. In recent years, several high profile cases of theft
and fraud committed by these non-governmental Representative Payee agencies has
spurred Congress to act. In particular, members of Congress were alarmed at the
unreasonably high standard required for SSI or SSDI beneficiary to actually
recover cash benefits stolen or misused by fraud – even after a Representative
Payee has been convicted by a court of law.
HR 4070 contains a number of reforms designed to protect SSI and SSDI
beneficiaries that are victims of theft of fraud. Most important are reforms
that would make it easier to recover cash benefits. The bill would also require
non-governmental organizations that serve as Representative Payees to be bonded
and licensed, provided such licensing is available in the state. HR 4070 would
prohibit convicted felons from serving Representative Payees and would hold any
Payee that misuses benefits liable for the misused funds (allowing SSA to
recover the misused benefits from the Payee). Under the bill, SSA would be
allowed to set civil penalties of up to $5,000 for each misuse by a
Representative Payee, plus twice the amount of misused benefits. Testimony
submitted to Congress on reform of the Representative Payee program can be
viewed at:
http://www.nami.org/update/t000504.html
Beneficiary Earnings Report Changes Proposed
HR 4070 contains a number of proposed “protections” designed to SSI and SSDI
beneficiaries from withholding information about earnings or change in
employment status. Specifically, the bill proposes new civil monetary penalties
against beneficiaries that knowingly withhold material facts related to a change
in employment status or earnings. A previous proposal recommended by SSA that
would have allowed the agency to disqualify a SSDI beneficiary from being able
to use Trial Work Period (TWP) months was removed after protests from NAMI and
other disability organizations.
The changes proposed in HR 4070 are related to longstanding concerns expressed
by officials at SSA about SSI and SSDI beneficiaries not reporting earnings that
would otherwise result in reduction or termination of cash benefits and health
coverage. However, in most cases SSI and SSDI beneficiaries that regularly file
earnings reports find that local SSA field fail to process their reports for
months, or even years. As a result, many beneficiaries are later assessed
overpayments years later – not as a result of fraud, but long delays in
processing of earnings reports filed in good faith. These overpayments can total
thousands of dollars and create a huge disincentive to beneficiaries making
attempts to work.
In 1999, Congress passed the Ticket To Work and Work Incentives Improvement Act
(P.L. 106-170), a law designed to address the overwhelming disincentives
associated with trying to transition from the SSI and SSDI programs to
employment. Unfortunately, the law did not reform the slow and burdensome
process that SSA uses to process earnings that are reported by beneficiaries.
More information on implementation of TWWIIA is available at:
http://www.nami.org/update/20020110.htm
HR 4070 contains a recommendation from SSA to impose new civil monetary
penalties on beneficiaries that knowingly withhold or omit material or
misleading facts related to work or earnings (or that cause misleading or
material facts related to work or earnings) from SSA. However, at the
recommendation of NAMI and a coalition of national disability organizations,
members of the House Ways & Means Committee (including Representative Clay Shaw
(R-FL)) added a requirement for SSA to begin issuing written receipts of
earnings reports provided by beneficiaries. At minimum, such written reports
would begin documenting the substantial delay between filing of earnings reports
and the processing of these reports for purposes of calculating benefits and
accrual of TWP months for SSDI and the 1619 program under SSI.
More importantly, the revised language in HR 4070 would delay the effective date
of SSA’s new authority to impose civil monetary penalties against SSI and SSDI
beneficiaries until SSA has such a system for issuing written receipts to
beneficiaries providing earnings reports up and running. In other words, SSA
would not be allowed to impose such penalties until the agency develops a system
that quickly, fairly and accurately allows SSI and SSDI beneficiaries to know
how their earnings impact their benefits and their use of work incentive
programs such as TWP, extended period of eligibility and 1619.
Finally, HR 4070 contains proposals recommended by SSA to a) deny SSDI benefits
to fugitive felons and individuals fleeing prosecution, and b) impose fines of
up to $5,000 on individuals who use force (or the threat of force) to “interfere
with the administration of the Social Security Act” (i.e., interfering with SSA
field office staff on the job). NAMI is currently working to ensure that this
latter proposal provides exceptions for instances in which alleged threats are
directly related to the symptoms of mental illness.
Next Steps
Currently, there is no Senate companion to HR 4070. To date, leaders of the
Senate Finance Committee have not made clear whether or not they intend to move
HR 4070 forward in 2002. Instead, Senate Finance Chairman Max Baucus (D-MT) is
contemplating legislation to streamline the very long and complicated disability
determination and adjudication process associated with new benefit applications.
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Thank you.
