107-31
November 22, 2002

Senate Passes H.R. 4070, "Social Security Program Protection Act of 2002"

On November 18, 2002, the Senate passed (with amendments) the House-passed version of H.R. 4070, the "Social Security Program Protection Act of 2002." The bill was returned to the House, which took no further action. Below are descriptions of the bill's provisions.

Authority To Reissue Benefits Misused By Organizational Representative Payees

  • Would provide for the reissuance of title II, title VIII, and title XVI benefits in case of benefit misuse by an organizational payee or an individual payee who serves 15 or more beneficiaries. Under present law, benefits can be reissued only where there was negligent failure on SSA's part to investigate or monitor the performance of the payee. In all other cases, the individual loses his or her funds unless SSA can obtain restitution of the misused benefits from the payee, or unless the individual obtains restitution from the payee through other means, such as a civil lawsuit.
  • Would define "misuse of benefits" by a representative payee in titles II, VIII, and XVI. Present law provides that benefits paid to a representative payee on behalf of an individual are for the individual's "use or benefit", but does not contain a definition of misuse.
  • Would provide that reissued title II, VIII, and XVI benefits would be excluded from resources for purposes of determining SSI eligibility for 9 months after the month in which the reissued benefits are received.
  • Would be effective with respect to misuse determinations made on or after January 1, 1995.

Oversight Of Representative Payees

  • Would require that, in order to receive a fee for serving as a title II or title XVI representative payee, nongovernmental organizational representative payees certify annually that they are both bonded and licensed, provided that licensing is available in the State. Would be effective on the first day of the thirteenth month beginning after the date of enactment.
  • Would require periodic onsite review of title II, VIII, and XVI representative payees who are either individual payees serving 15 or more beneficiaries, nongovernmental fee-for-service payees, or any other organizational or governmental representative payee that serves 50 or more beneficiaries. Would be effective upon enactment.
  • Would require the Commissioner, within 120 days after the end of each fiscal year, to submit to the House Ways and Means Committee and the Senate Finance Committee a report on the results of the periodic reviews conducted during the subject fiscal year.

Disqualification From Service As Representative Payee Upon Conviction Of Offenses Resulting In Imprisonment For More Than 1 Year And Upon Fugitive Felon Status

  • Would provide that a person who has been convicted of an offense that resulted in imprisonment for more than 1 year could not be appointed as representative payee for title II, VIII, or XVI benefits, unless the Commissioner determines that such appointment would be appropriate, notwithstanding such conviction.Would provide that a person who is a fugitive felon or a parole violator could not be appointed as representative payee for title II, VIII, or XVI benefits.
  • Would require, within 270 days of enactment, the Commissioner in consultation with the Inspector General to submit a report to Congress evaluating whether existing reviews and procedures relating to the qualification/disqualification of representative payees provide sufficient safeguards.
  • Would be effective on the first day of the thirteenth month beginning after the date of enactment.

Fee Forfeiture In Case Of Benefit Misuse By Representative Payees

  • Would provide that an organization qualified to collect a fee for serving as a title II or title XVI representative payee could not collect a fee for any month that it is determined that the organization misused all or part of the individual's benefit.
  • Would be effective in any case with respect to which the Commissioner makes the determination of misuse after December 31, 2002.

Liability Of Representative Payees For Misused Benefits

  • Would provide that the amount of benefits misused by a nongovernmental representative payee would be treated as overpayments to the representative payee, subject to current overpayment recovery authorities. Any recovered amounts not reissued to the beneficiary pursuant to section 101 of the bill would be reissued to the beneficiary or his alternative representative payee, up to the total amount misused.
  • Would be effective in any case with respect to which the Commissioner makes the determination of misuse after December 31, 2002.

Authority To Redirect Delivery Of Benefit Payments When A Representative Payee Fails To Provide Required Accounting

  • Would provide SSA with the authority to redirect payment of title II, VIII, and XVI benefits to local Social Security field offices if a representative payee fails to provide an annual accounting of benefits report. SSA would be required to provide proper notice prior to redirecting benefits. Under present law, there is no authority to redirect benefit payments.
  • Would be effective 180 days after the date of enactment.

Issuance by Commissioner of Social Security of Receipts to Acknowledge Submission of Reports of Changes in Work or Earnings Status

  • Would require the Commissioner, as soon as possible but no later than 1 year after date of enactment, to issue a receipt to a disabled beneficiary each time he or she submits documentation or otherwise reports a change in earnings or work status and to continue to issue such receipts until a centralized computer file recording the date of the submission of such information is implemented.

Denial Of Title II Benefits To Fugitive Felons And Persons Fleeing Prosecution

  • Would deny title II benefits to fugitive felons and individuals who are fleeing to avoid prosecution, or custody or confinement after conviction, under the laws of the place from which the person flees, for a crime, or an attempt to commit a crime, which is a felony under the laws of the place from which a person flees, or in the case of New Jersey, is a high misdemeanor under the laws of such state, or is violating a condition of probation or parole imposed under Federal or State law.
  • Would require the Commissioner to furnish (unless it would violate other Federal or State law) law enforcement officers the current address, SSN and photograph (if applicable) of any beneficiary under this title upon written request of the officer. The written request must provide sufficient identifying information for the Commissioner to uniquely identify the beneficiary, and must establish that the beneficiary is a fugitive felon or probation or parole violator, has information needed by the officer to perform his/her official duties, and that locating/ apprehending the beneficiary is within the scope of the officer's official duties.
  • Would be effective 9 months after enactment.

Requirements Relating To Offers To Provide For A Fee A Product Or Service Available Without Charge From The Social Security Administration.

  • Would amend section 1140 of the Social Security Act by adding a mandatory requirement that persons or companies include in their solicitations a statement that services that they provide for a fee are available directly from SSA free of charge. The statement would be required to comply with standards promulgated by the Commissioner of Social Security with respect to their content, placement, visibility, and legibility.
  • Would be effective 180 days after the date of enactment.

Refusal To Recognize Certain Individuals As Claimant Representatives

  • Would authorize the Commissioner, after due notice and opportunity for hearing, to refuse to recognize a representative and disqualify a representative already recognized, who has been disbarred, suspended, or disqualified from participating in or appearing before any Federal program or agency from which he or she was previously admitted to practice in any jurisdiction.
  • Would be effective upon enactment.

Penalty For Corrupt Or Forcible Interference With Administration Of The Social Security Act

  • Would require a fine of not more than $5000, imprisonment of not more than 3 years, or both, for anyone who corruptly or by force, impedes or attempts to impede or obstruct the administration of the Social Security Act. If the offense is committed only by threats of force, the penalty would be a fine of not more than $3000, imprisonment for not more than 1 year, or both.
  • Would be effective upon enactment.

Use Of Symbols, Emblems, Or Names In Reference To Social Security Or Medicare

  • Would update section 1140 of the Social Security Act to include the Health Care Financing Administration's (HCFA) new name - Center for Medicare and Medicaid Services (CMS) in the names prohibited from use in specified circumstances. It would also add Death Benefits Update, Federal Benefits Information, Funeral Expenses, and Final Supplemental Plan to the terms that are prohibited from use because they may give a false impression that an item is approved or endorsed by SSA, CMS, or HHS.
  • Would be effective 180 days after the date of enactment.

Disqualification From Payment During Trial Work Period Upon Conviction Of Fraudulent Concealment Of Work Activity.

  • Would provide that an individual who is convicted of fraudulently concealing work activity during the trial work period (TWP) would not be entitled to receive a disability benefit for TWP months that occur prior to the conviction but within the same period of disability. If payment has already been made, he or she is liable for repayment plus restitution, fines, penalties, and assessments.
  • In order to be considered to be fraudulently concealing work activity under this provision, the individual must have: (1) provided false information to SSA about his or her earnings during that period; (2) worked under another identity, including under the Social Security number of another person or a false Social Security number; or (3) taken other actions to conceal work activity with the intent to fraudulently receive benefits that he or she was not entitled to.
  • Would be effective with respect to work activity performed after enactment.

Cap On Attorney Assessments

  • Would cap the amount of the attorney fee assessment at the lower of 6.3% percent of the attorney fee certified or paid from the claimant's past-due benefits, or $75. The $75 cap would be adjusted based on the annual cost-of-living adjustments rounded down to the next lower $10, but in no case to an amount less than $75.
  • Would apply with respect to attorney fees which are first required to be certified or paid in or after the month beginning 180 days after enactment.

Application Of Demonstration Authority Sunset Date To New Projects

  • Would extend the general title II disability program demonstration project waiver authority to include projects initiated before the expiration of the 5-year period (ending December 17, 2004).
  • Would be effective upon enactment.

Expansion Of Waiver Authority Available In Connection With Demonstration Projects Providing For Reductions In Disability Insurance Benefits Based On Earnings

  • Would authorize the Commissioner to waive requirements of section 1148 of the Social Security Act, which pertains to the Ticket to Work and Self-Sufficiency program and the provision of rehabilitation and return-to-work services.
  • Would be effective upon enactment.

Funding Of Demonstration Projects Providing For Reductions In Disability Insurance Benefits Based On Earnings

  • Would change financial authorization language in the Ticket to Work and Self-Sufficiency Act to specify that benefits associated with the $1-for-$2 demonstration will be paid directly from the OASI, DI, HI, and SMI trust funds.
  • Would be effective upon enactment.

Availability Of Federal And State Work Incentive Services To Additional Individuals

  • Would allow Benefit Planning, Assistance and Outreach (BPAO) services and Protection and Advocacy (P&A) System services to be provided to those beneficiaries in section 1619(b) status, those beneficiaries receiving only a State Supplement payment, and those beneficiaries in an extended period of Medicare eligibility under title XVIII after a period of disability under title II has ended, and would allow P&A System services to include those needed to maintain employment (in addition to those needed to secure or regain it).
  • Would be effective with respect to: (1) grants, cooperative agreements or contracts entered into on or after the date of enactment; and, (2) payments provided after the date of enactment.
  • Technical Amendment Clarifying Treatment For Certain Purposes Of Individual Work Plans Under The Ticket To Work And Self-Sufficiency Program
  • Would treat an individual receiving vocational rehabilitation pursuant to an individual work plan established under the Ticket to Work program the same as an individual with an individualized work plan under a State plan for vocational rehabilitation services approved under the Rehabilitation Act of 1973, thereby making employers who hire such individuals eligible for the worker opportunity tax credit.
  • Would be effective as if enacted in section 505 of P.L 106-170 (i.e., applies to individuals who began work for the employer after June 30, 1999).

Elimination Of Transcript Requirement In Remand Cases Fully Favorable To The Claimant

  • Would provide that SSA would not have to prepare and file a transcript with the district court after a court-ordered remand for further administrative proceedings results in a fully?favorable award of benefits.
  • Would be effective with respect to final determinations issued upon remand made on or after the date of enactment.

Nonpayment Of Benefits Upon Removal From The United States

  • Would end the exemption from nonpayment of benefits for aliens removed from the United States for smuggling other aliens into the United States.
  • Would be effective for aliens for whom the Commissioner receives a removal notice from the Attorney General after the date of enactment.

Reinstatement Of Certain Reporting Requirements

Would reinstate the following report requirements, which were eliminated as a result of provisions in P.L. 104-66, the "Federal Reports Elimination and Sunset Act of 1995."
  • Trustees reports on OASDI, HI, and SMI trust funds;
  • Continuing disability reviews report; and
  • Disability preefectuation review report.

Clarification Of Definitions Regarding Certain Survivor Benefits

  • Would provide a limited exception to the 9-month duration-of-marriage requirement for widow(er)'s benefits. This exception would apply in cases in which the marriage was postponed by legal impediments to the marriage caused by State restrictions on divorce from a prior spouse institutionalized due to mental incompetence or similar incapacity.
  • Would be effective based on applications for benefits filed after the date of enactment.

Clarification Respecting The FICA And SECA Tax Exemptions For An Individual Whose Earnings Are Subject To The Laws Of A Totalization Agreement Partner

  • Would provide clear legal authority to exempt a worker's earnings from U.S. Social Security tax in cases where their earnings were subject to a foreign country's laws in accordance with a U.S. totalization agreement, but the foreign country's law does not require compulsory contributions with respect to those earnings.
  • Would be effective upon enactment.

Coverage Under Divided Retirement System For Public Employees Of Kentucky

  • Would add 'Kentucky' to the list of 21 States in the Social Security Act permitted to use the divided retirement system procedures. Under these procedures, the State has the option of extending Social Security and Medicare coverage (or Medicare coverage only) to only those current employees who wish to be covered, with all future employees being covered under Social Security automatically.
  • Would be effective January 1, 2003.

60-Month Period of Employment Requirement For Application Of Government Pension Offset Exemption.

  • Would replace the present-law "last-day of covered employment" exemption to the government pension offset (GPO) with a more stringent requirement. The provision would require that Federal, State and local government workers be covered by Social Security throughout their last 60 months of employment with the governmental entity in order to be exempt from the government pension offset.
  • Would be effective for applications filed after the month of enactment. However, the provision would not apply to individuals whose last day of State or local government employment was covered by Social Security and occurs on or before June 30, 2003, provided that such period of covered employment began on or before December 31, 2002. (For those individuals who meet these requirements, the present-law "last day" test exemption would apply.)

Technical Correction Relating To Responsible Agency Head

  • Would delete all references to the "Secretary of Health and Human Services" in section 1143 of the Social Security Act (with regard to issuance of Social Security statements) and replace them with the "Commissioner of Social Security."
  • Would be effective upon enactment.

Technical Correction Relating To Retirement Benefits Of Ministers

  • Would conform the Social Security Act to the change made to the tax provisions in the Internal Revenue Code in 1996 by excluding from coverage for Social Security benefit purposes certain benefits (including a parsonage allowance) received by a retired minister or member of a religious order.
  • Would be effective for years beginning before, on or after December 31, 1994.

Technical Correction Relating To Domestic Employment

  • Would remove the references to domestic employment that appear in the provisions in the law that define agricultural employment. Further, the provisions that define domestic employment would specify that domestic employment includes domestic service performed on a farm.
  • Would be effective upon enactment.

Technical Corrections Of Outdated References

  • Would change the Act to correct terminology and citations respecting removal from the United States.
  • Would change the Act to correct the citation with respect to the tax deduction relating to health insurance costs of self-employed individuals.
  • Would change the Code to eliminate the reference to the obsolete 20-day agricultural work test.
  • Would be effective upon enactment.

Technical Correction Respecting Self-Employment Income In Community Property States

  • Would conform identical provisions in the Social Security Act and the Internal Revenue Code to current practice in both community property and non-community property States (i.e., to provide that income from a trade or business that is not a partnership will be taxed and credited to the spouse who earned the income in carrying on the trade or business or to each spouse based on their distributive share of the gross earnings, if jointly operated).
  • Would be effective upon enactment.