Social Security Protection Act, P.L. 108-203
On March 2, 2004, President Bush signed into law the Social Security Protection Act, P.L. 108-203. This bipartisan law (formerly H.R. 743) will make a number of important improvements for people with disabilities in the Supplemental Security Income (SSI) program and the Title II (Old Age, Survivors, and Disability Insurance) disability programs. There are provisions to: improve protection of beneficiaries who need representative payees; create additional means for the Social Security Administration (SSA) to address beneficiary fraud; make improvements to the attorneys fees payment system; and make technical and other necessary improvements to the Ticket to Work program to ensure that the work incentives enacted in 1999 operate as intended.
The Social Security Protection Act was developed and passed in a bipartisan manner and took three Congresses to come to fruition. Lead sponsors in the House were Representatives E. Clay Shaw (R-FL) and Robert Matsui (D-CA). Key leadership in the Senate were Senators Charles Grassley (R-IA) and Max Baucus (D-MT). Following is a list of the main provisions that will affect people with disabilities who receive SSI or Title II disability benefits.
Representative Payee Provisions
Approximately eight million Title II and SSI beneficiaries have representative payees, often family members or friends, who receive and manage cash benefits on behalf of beneficiaries. The new law will:
Allow SSA to re-issue benefits to beneficiaries whose funds had been misused by organizational representative payees or an individual serving 15 or more beneficiaries. These re-issued benefits will be excluded from resource calculations;
Require non-governmental organizational representative payees to be bonded and licensed under state law;
Require monitoring of representative payees, including periodic on-site monitoring of individuals serving more than 15 beneficiaries; certified community-based non-profit social service agencies; or any agency serving over 50 beneficiaries;
Disqualify as representative payees people convicted of offenses resulting in imprisonment for more than a year, and people fleeing prosecution, custody, or confinement for a felony;
Require the Commissioner to evaluate and report to Congressional Committees on whether the existing procedures and reviews for qualification of representative payees are sufficient to guard against misuse;
Provide that when an organization has been found to misuse an individual’s benefits, the organization would not qualify for its fee;
Require that a payee that is not a governmental agency will be held liable for misuse of funds and that recovered amounts shall be refunded to the beneficiary;
Allow SSA to treat misused benefits as “overpayments” to the representative payee, thereby triggering SSA’s authority to recover the money through tax refund offsets, referral to collection agencies, notifying credit bureaus, and offset of any future federal benefits/payments;
Require representative payees who are delinquent in filing annual accounting reports to receive the individual’s benefits in person at a local Social Security office;
Authorize the Commissioner to conduct a survey to determine how payments made to payees are managed and used on behalf of beneficiaries; and
Create new civil monetary penalties for representative payees who misuse beneficiaries’ funds.
Program Protections
Several provisions were included in the Social Security Protection Act to help prevent against fraud in the Social Security programs. They include additional criminal and civil penalties for fraudulent acts by people receiving benefits. These new provisions:
Amend civil monetary penalty authority so that sanctions may be imposed against people who withhold material facts in order to obtain or increase benefits;
· Require the Commissioner, until a centralized computer system is in place, to issue a written receipt whenever a beneficiary or payee reports earnings or a change in work status;
· Amend Title II (OASDI) to deny benefits to any person who is fleeing prosecution or confinement after conviction of a felony (or a crime punishable by imprisonment for over a year) or who is violating probation or parole under federal or state law (this provision already exists in Title XVI for the SSI program);
· Allow the Commissioner to pay withheld Title II or SSI benefits for good cause if the offense or probation/parole violation was nonviolent and not drug-related and require the Commissioner to pay benefits in the event of an acquittal, dismissal of charges, vacating of arrest warrant, or erroneous implication in the offense because of identity fraud;
· Require the Commissioner to assist law enforcement, upon request, with information about beneficiaries who are fleeing prosecution or confinement or in violation of probation or parole;
Require individuals who provide Social Security-related services for a fee to explain in their solicitations that the SSA provides the services free of charge (except in the case of claimant representatives, such as attorneys, and assistance in preparing individual plans for achieving self-support);
· Authorize the Commissioner to refuse to recognize certain disqualified attorneys and to require full restitution from a disqualified representative before considering whether to allow the representative to serve again;
Establish criminal penalties for forcibly impeding any SSA employee while acting in their official capacity;
Expand current law prohibiting the use of Social Security or Medicare symbols, emblems, or references;
Prohibit individuals who are convicted in federal court of fraudulently concealing work activity from being eligible for a trial work period;
Allow Federal courts to order a person who breaks the law relating to Social Security or to the SSI program to make restitution to the harmed individual or to the trust funds or general funds, as appropriate;
· Allow SSA to collect overpayments paid under either SSI or Title II to be recovered from benefits paid under either program (also applies to Title VIII addressing a small group of World War II veterans); and
· Prohibit payment of Title II benefits based on earnings of a non-citizen who was not authorized to work in the United States.
Attorneys Fees Provisions
Prior to the Social Security Protection Act, the Social Security Administration would pay, out of the back benefit award to a successful claimant, a limited, agreed-upon amount directly to the attorney who successfully represented the individual. Many advocates believe that this attorneys fees payment system is critical in ensuring that many claimants have the representation they need in a complex and difficult process. The attorneys fees payment system has not been available to claimants for SSI benefits. Several provisions are included in the new law to address the attorneys fees payments system including expanding it to the SSI program and creating a nation-wide demonstration allowing certified non-attorneys to also participate. The provisions will:
Make improvements to the attorneys fee payment system to help individuals with disabilities gain access to representation by imposing a $75 cap (indexed for inflation) on the current 6.3 percent assessment on approved attorney fees for Social Security and SSI claimants;
Temporarily extend the attorneys fee payment system to claimants in the SSI program (the extension is tied to the 5-year nation-wide demonstration for non-attorney representatives – see below);
Require the Commissioner to develop and implement a nationwide demonstration project and report to Congress regarding non-attorneys representing claimants before the Social Security Administration; and
Require the General Accounting Office to evaluate and report to Congress on appointment and payment of claimant representatives under the SSI and Title II programs.
Work Incentives Provisions
The Social Security Protection Act will also improve work incentives for individuals with disabilities, allowing them to attempt, or return to, work by:
Extending, expanding, and making technical corrections regarding SSA’s authority to conduct demonstration projects;
Expanding the classes of individuals who may be served by the Benefits, Planning, Assistance, and Outreach program and the Protection and Advocacy (P&A) to Beneficiaries program of the Ticket to Work and Work Incentives Improvement Act to cover people receiving SSI, people receiving only a state supplementation, or people in an extended period of Medicare eligibility after disability has ended. It also modifies the P&A services to which beneficiaries have access to include assistance in maintaining a job;
Clarifying the Work Opportunity Tax Credit so that it is also available to employers who hire a beneficiary with disabilities who is referred from any employment network under the Ticket program, not just the state rehabilitation agency;
Requiring the General Accounting Office to conduct an interim assessment of the Ticket to Work program and report to Congress with recommendations; and
Reauthorizing and extending through Fiscal Year 2009 the work incentives outreach program and the program of state grants for work incentives assistance to beneficiaries with disabilities.
Amendments to Supplemental Security Income Program
The new law includes several improvements to the SSI program for people with disabilities. These provisions will:
Change the calculation of infrequent and irregular income from a monthly to a quarterly basis to allow individuals to exclude $60 per quarter of unearned income and $30 per quarter of earned income that is received irregularly and infrequently;
Exclude from an individual’s countable income all interest and dividend income earned on countable resources;
Increase from six to nine months, and make uniform, the time period for excluding from resources amounts received as past-due Social Security and SSI benefits, earned income tax credit payments, and child tax credit payments;
Permit the student earned income exclusion to apply to any individual under age 22 who is a student, regardless of whether the students are married or heads of households;
Improve the treatment of one-time, non-recurring income for new SSI beneficiaries;
Extend the current eligibility for children (who are blind or disabled) of military personnel overseas to children (who are blind or disabled) of military personnel who were born overseas, became disabled while overseas, or first applied for SSI overseas;
Exclude from income gifts for paying tuition or other education-related fees and exclude from resources for nine months any grant, scholarship, fellowship, or gift for the cost of tuition or fees; and
Provide for the treatment of military pay as received in the month in which it was earned.
Other Miscellaneous and Technical Amendments
The law includes numerous miscellaneous and technical changes to the Title II and SSI programs. The ones most relevant to people with disabilities will:
· Allow re-entitlement to childhood disability benefits (or “disabled adult child” benefits) after the current seven-year period of re-entitlement if the beneficiary’s previous entitlement was terminated due to work at the substantial gainful activity (SGA) level (see below); and
· Reinstate requirements for annual reports relating to continuing disability reviews (CDRs) and disability determinations, among others.
Disabled Adult Child Benefits
Although included in the “Miscellaneous Amendments” section of the new law, the change to eligibility criteria for disabled adult child (DAC) benefits is a critical step to remove some work disincentives that remained even after the passage of the Ticket to Work and Work Incentives Improvement Act. This section will become effective for benefits paid in the seventh month following the enactment of the legislation.
An individual who is eligible for DAC benefits under Title II has a severe disability with onset prior to age 22 and the DAC benefits are based on the work history of the parent(s). His/her DAC eligibility will not begin until a parent who is a covered worker becomes disabled, retires, or dies. Once the parent has become disabled, retired, or died, the adult son or daughter receives DAC benefits as a dependant of the parent. The DAC benefit is based on the parent’s benefit amount (up to 50 percent of the parent’s benefit while the parent is living and up to 75 percent of the parent’s benefit when the parent dies).
Under prior law, once an individual receiving DAC benefits completes his/her Title II trial work period and extended period of eligibility (EPE), work at the SGA level (currently $810 per month for people with disabilities/$1,350 per month for people who are blind) would terminate DAC status. There is a 7-year grace period during which an individual whose DAC status was terminated may re-enter the Title II program and receive DAC benefits again. If that 7-year period expired without reinstatement, then DAC status was permanently terminated. The individual could receive Title II benefits again, but only based on his/her own work record, not the parent’s work record. For many individuals, this would be a permanent and substantial reduction in Title II cash benefits. For this reason, people receiving DAC benefits have had a disincentive to use the work incentives in Title II to attempt work.
The new provision will allow individuals who lose DAC status because of work at the SGA level to return to Title II DAC benefits even beyond the 7-year grace period.
Effective Dates
The Social Security Administration will establish policies and publish regulations for the provisions of the Social Security Protection Act. Effective dates for the numerous provisions vary.
