| Current
Law |
Explanation of Provision |
Effective
Date |
|
Title I: Protection of Beneficiaries |
|
Subtitle A: Representative Payees |
| Section 101:
Authority to Reissue Benefits Misused by Organizational Representative
Payees |
| Sections 205, 807, and 1631
of the Social Security Act require the re-issuance of benefits misused
by an individual or organizational representative payee when the
Commissioner finds that the Social Security Administration (SSA)
negligently failed to investigate/monitor payee. |
Eliminates the requirement
that benefits be reissued only upon a finding of SSA negligence in the
case of misuse by an organizational payee or an individual payee
representing 15 or more beneficiaries. Thus, the Commissioner
would re-issue benefits under Title II, VIII and XVI whenever a
beneficiary’s funds are misused by an organizational payee or an
individual payee representing 15 or more beneficiaries.
Authorizes SSA to issue regulations defining misuse (i.e., “use and
benefit”). |
Applies to benefit misuse by
a representative payee as determined by the Commissioner on or after
January 1, 1995. |
| Section 102:
Oversight of Representative Payees |
| Sections 205, 807, and 1631
of the Social Security Act require representative payees to be bonded
or licensed. Payees are not required to submit proof of bonding
or licensing, and they are not subject to independent audits. In
addition, there is no provision requiring periodic onsite reviews of
organizational payees (other than the accountability monitoring done
for State institutions that serve as representative payees). |
Requires non-governmental
fee-for-service organizational representative payees to be both bonded
and licensed (provided that licensing is available in the State).
Requires such payees to submit annually proof of bonding and licensing,
as well as copies of any independent audits that were performed of the
payee in past year. The Commissioner would be required to conduct
periodic onsite reviews of certain representative payees: (1) a person
who serves as a representative payee to 15 or more beneficiaries, (2)
nongovernmental fee-for-service representative payees or, (3) any other
agency that serves as the representative payee to 50 or more
beneficiaries. In addition, the Commissioner would be required to
submit an annual report to the House Ways and Means and Senate Finance
Committees on the reviews conducted in the prior fiscal year.
|
The bonding, licensing, and
audit provisions are effective on the first day of the 13th
month following enactment of the legislation. The periodic onsite
review provision is effective upon enactment. |
| Section 103:
Disqualification From Service as Representative Payee Upon Conviction
of Offenses Resulting in Imprisonment For More Than One Year and Upon
Fugitive Felon Status |
| Sections 205, 807, and 1631
of the Social Security Act disqualify individuals from being
representative payees if they have been convicted of fraudulent conduct
involving Social Security programs. |
Expands the disqualification
of representative payees to include individuals who have been convicted
of an offense resulting in their imprisonment for more than one year,
unless the Commissioner determines that payee status would be
appropriate despite the conviction. Also expands the
disqualification to include fugitive felons. |
Effective on first day of the
13th month beginning after the date of enactment. |
| Section 104:
Fee Forfeiture In Case of Benefit Misuse by Representative Payees |
| Sections 205 and 1631 of the
Social Security Act authorize certain organizational representative
payees to collect a monthly fee for their services. The fee,
which is determined by a statutory formula, is deducted from the
beneficiary’s benefit payments. |
Requires representative
payees to forfeit the fee for those months during which the
representative payee misused funds, as determined by the Commissioner
or a court of jurisdiction. |
Applies to any month
involving benefit misuse by a representative payee as determined by the
Commissioner after December 31, 2002. |
| Section 105:
Liability of Representative Payees For Misused Benefits |
| No provision under current
law. |
Treats benefits that are
misused by a non-governmental representative payee as an overpayment to
the payee, and thus subjects them to current overpayment recovery
authorities. Any recovered benefits not reissued to the
beneficiary pursuant to section 101 of this legislation would be
reissued under this provision to the beneficiary or their alternate
representative payee, up to the total amount misused. |
Applies to benefit misuse by
a representative payee in any case determined by the Commissioner after
December 31, 2002. |
| Section 106:
Authority to Redirect Delivery of Benefit Payments When a
Representative Payee Fails to Provide Required Accounting |
| Sections 205, 807, and 1631
of the Social Security Act require representative payees to submit
accounting reports to the Commissioner regarding how a beneficiary’s
benefit payments were used. A report is required at least
annually, but can be requested by the Commissioner at any time if
misuse is suspected. |
Authorizes the Commissioner
to require a representative payee to receive benefit payments under
Title II, VIII and XVI in person at an SSA field office if the
representative payee fails to provide an annual accounting of benefits.
|
Effective 180 days after date
of enactment. |
|
Subtitle B: Enforcement |
| Section 111:
Civil Monetary Penalty Authority with Respect to Wrongful Conversions
by Representative Payees |
| Section 1129 of the Social
Security Act authorizes the Commissioner to provide civil monetary
penalties (of up to $5,000 for each violation, and an assessment of up
to twice the amount wrongly paid) for any person who knowingly uses
false information or knowingly omits information to obtain Title II,
VIII or XVI benefits. |
Expands civil monetary
penalties to include a representative payee’s misuse of Title II, VIII
or XVI benefits. A civil monetary penalty of up to $5,000 may be
imposed for each violation, along with an assessment of up to twice the
amount of misused benefits. |
Applies to violations
occurring after the date of enactment. |
|
Title II: Program Protections |
| Section 201:
Civil Monetary Penalty Authority with Respect to Knowing Withholding of
Material Facts |
| Section 1129 of the Social
Security Act authorizes the Commissioner to impose civil monetary
penalties and assessments on any person who -- in order to obtain Title
II, VIII, or XVI benefits -- knowingly gives false information, omits
material information, or makes a statement with disregard for the
truth. Section 1129A provides the administrative procedures for
imposing penalties in the case of Title II and XVI benefits. |
Clarifies that civil monetary
penalties and assessments can be imposed for failure to notify SSA of
changed circumstances that affect eligibility or benefit amount.
Extends the administrative procedures to Title VIII benefits.
Makes other clarifying and conforming changes. |
Applies to violations
occurring after the date of enactment. |
| Section 202:
Disqualification from Eligibility for Trial Work Period Upon Criminal,
Civil, or Administrative Funding of Fraudulent Concealment of Work
Activity |
| To encourage beneficiaries to
return to work, Section 222 of the Social Security Act provides that
disabled Title II beneficiaries may work for a nine-month “trial work
period” while continuing to be eligible for disability benefits. |
Individuals who fraudulently
conceal work activity, as determined by a Federal court or agency,
would no longer be eligible for a trial work period. |
Applies to work activity
performed after the date of enactment. |
| Section 203:
Denial of Title II Benefits to Fugitive Felons and Persons Fleeing
Prosecution |
| Section 1611(e) of the Social
Security Act authorizes the Commissioner to disqualify, for Title XVI
benefits, fugitive felons and persons fleeing prosecution.
However, Section 202(x) of the Social Security Act does not authorize
the Commissioner to disqualify such individuals from receiving Title II
benefits. |
Denies Title II benefits to
fugitive felons and persons fleeing prosecution. The Commissioner
may, for good cause, pay withheld benefits. Finally, the
Commissioner may assist law enforcement officials in apprehending
fugitives by providing them with the address, Social Security number,
and photograph of a fugitive. |
Upon enactment. |
| Section 204:
Requirements Relating to Offers to Provide for a Fee a Product or
Service Available Without Charge from the Social Security
Administration |
| Section 1140 of the Social
Security Act prohibits (subject to civil penalties) the use of Social
Security and Medicare symbols, emblems, and references that gives a
false impression of Federal endorsement. |
Requires persons or companies
to include in solicitations a statement saying that the services they
provide for a fee are available directly from SSA free of charge.
|
The Commissioner shall
promulgate the “notice” standards within 1 year after the date of
enactment. The amendments would apply to solicitations made after
the 6th month following the issuance of these standards. |
| Section 205:
Refusal to Recognize Certain Individuals as Claimant Representatives |
| Under Section 206 of the
Social Security Act, attorneys disbarred in one jurisdiction, but
licensed to practice in another, must be recognized as a claimant’s
representative. |
Authorizes the Commissioner
to refuse to recognize a representative (and disqualify a
representative already recognized) who was disbarred, suspended, or
disqualified from participating in or appearing before any Federal
program or agency, or before any court or bar. |
Upon enactment.
|
| Section 206:
Penalty for Corrupt or Forcible Interference with Administration of
Social Security Act |
| No provision under current
law. |
Imposes a fine of not more
than $5,000, and imprisonment of not more than 3 years, or both, for
attempting to intimidate or impede – corruptly or by using force or
threats of force -- any SSA officer, employee or contractor (including
State employees of disability determination services or any individual
designated by the Commissioner) while acting in their official
capacities under the Social Security Act. |
Upon enactment. |
|
Title III: Attorney Fee Payment System
Improvements |
| Section 301:
Cap on Attorney Assessments |
| Section 206 of the Social
Security Act allows attorney fees for Title II claims to be paid
directly by SSA to the attorney out of past-due benefits. SSA
charges an assessment, at a rate not to exceed 6.3% of approved
attorney fees, for the costs of determining, processing, withholding
and distributing attorney fees for Title II claims. |
Imposes a cap of $100 on the
6.3% assessment on approved attorney fees for Title II claims.
|
Effective 180 days after date
of enactment. |
| Section 302:
Extension of Attorney Fee Payment System to Title XVI Claims |
| Section 206 of the Social
Security Act allows attorney fees for Title II claims to be paid
directly by SSA to the attorney out of past–due benefits (subject to an
assessment to cover SSA’s costs). However, attorney fees for
Title XVI claims are not paid directly by SSA out of past-due benefits,
but instead the attorney must collect the fee from the beneficiary.
|
Extends to Title XVI claims
the application of attorney-fee withholding from past-due benefits.
Authorizes SSA to charge a processing assessment of up to 6.3% of the
approved attorney fees, subject to a cap of $100. |
Effective 180 days after date
of enactment. |
|
Title IV: Miscellaneous and Technical Amendments |
|
Subtitle A: Amendments Relating to the Ticket to
Work and Work Incentives Improvement Act of 1999 |
| Section 401:
Application of Demonstration Authority Sunset Date to New Projects |
| Section 234 of the Social
Security Act provides the Commissioner with general authority to
conduct demonstration projects for the disability insurance program.
These projects can test (1) alternative methods of treating work
activity, (2) altering other limitations and conditions that apply
(such as lengthening the trial work period), and (3) implementing
sliding scale benefit offsets. To conduct the projects, the
Commissioner may waive compliance with the benefit requirements of
Title II and Section 1148, and the HHS Secretary may waive the benefit
requirements of Title XVIII. The Commissioner’s authority to
conduct demonstration projects terminates on December 17, 2004 – i.e.,
five years after enactment in the Ticket to Work and Work Incentives
Improvement Act of 1999. |
Clarifies that the
Commissioner is authorized to conduct demonstration projects that
extend beyond December 17, 2004, if the projects are initiated on or
before that date (i.e., initiated within the five-year window after
enactment of the Ticket to Work Act). |
Upon enactment. |
| Section 402:
Expansion of Waiver Authority Available in Connection with
Demonstration Projects Providing for Reductions in Disability Insurance
Benefits Based on Earnings |
| Section 302 of the Ticket to
Work and Work Incentives Improvement Act of 1999 directs the
Commissioner to conduct demonstration projects for the purpose of
evaluating a program for Title II disability beneficiaries under which
benefits are reduced by $1 for each $2 of the beneficiary’s earnings
above a level determined by the Commissioner. To permit a
thorough evaluation of alternative methods, Section 302 allows the
Commissioner to waive compliance with the benefit provisions of Title
II and allows the Secretary of Health and Human Services to waive
compliance with the benefit requirements of Title XVIII. |
Allows the Commissioner to
waive requirements in Section 1148 of the Social Security Act (which
governs the Ticket to Work and Self-Sufficiency Program), as they
relate to Title II, in order to test effectively the combination of
benefit offsets and return to work services. |
Upon enactment. |
| Section 403:
Funding of Demonstration Projects Provided for Reductions in Disability
Insurance Benefits Based on Earnings |
| Section 302 of the Ticket to
Work and Work Incentives Improvement Act of 1999 provides that the
benefits and administrative expenses of conducting the $1-for-$2
demonstration projects will be paid out of the OASDI and HI/SMI trust
funds, to the extent provided in advance in appropriations acts. |
Provides that administrative
expenses of the $1-for-$2 demonstration projects will be paid out of
otherwise available annually-appropriated funds, whereas the benefits
associated with the projects will be paid from the OASDI and HI/SMI
trust funds. |
Upon enactment. |
| Section 404:
Availability of Federal and State Work Incentive Services to Additional
Individuals |
| Sections 1149 and 1150 of the
Social Security Act provide that Benefit Planning, Assistance and
Outreach (BPAO) awardees and Protection and Advocacy (P&A) systems can
use funds from SSA to serve only those individuals who are eligible for
Title XVI benefits under either Section 1614(a)(2) or 1614(a)(3) of the
Act. |
Expands the availability of
BPAO services and P&A system services so that they can also be provided
to individuals who (1) are in Section 1619(b) status,
(2) receive only a State Supplementary payment, or (3) are in an
extended period of Medicare eligibility under Title XVIII after a
period of Title II disability has ended. |
Effective with respect to
payments provided after the date of enactment. |
| Section 405:
Technical Amendment Clarifying Treatment for Certain Purposes of
Individual Work Plans Under the Ticket to Work and Self-Sufficiency
Program |
| Section 51 of the Internal
Revenue Code provides employers a Work Opportunity Tax Credit for
hiring disabled individuals if they are referred to the employers by a
State vocational rehabilitation agency pursuant to an individualized
work plan approved under the Rehabilitation Act of 1973.
Separately, under the Ticket to Work and Self-Sufficiency Program
(established in Section 1148 of the Social Security Act), a disabled
individual can receive vocational rehabilitation services by being
hired through an employment-network referral. However, this
Ticket to Work employment does not qualify for the Work Opportunity Tax
Credit. |
Provides that employers who
hire disabled workers through a referral by employment networks under
the Ticket to Work program also qualify for the Work Opportunity Tax
Credit. Specifically, the individual work plan under Section 1148
would qualify, under Section 51(d) of the Internal Revenue Code, as an
approved work plan under the Rehabilitation Act of 1973.
|
Effective as if included in
Section 505 of Ticket to Work and Work Incentives Improvement Act of
1999. |
|
Subtitle B: Miscellaneous Amendments |
| Section 411:
Elimination of Transcript Requirement in Remand Cases Fully Favorable
to the Claimant |
| Section 205 of the Social
Security Act requires SSA to file with the District Court a hearing
transcript regarding any SSA hearing that follows a court remand of an
SSA decision. |
Clarifies that SSA is not
required to file a transcript with the court when SSA on remand issues
a decision fully favorable to the claimant. |
Upon enactment. |
| Section 412:
Nonpayment of Benefits Upon Removal from the United States
|
| Section 202 of the Social
Security Act does not authorize SSA to suspend benefits of recipients
who are removed from the U.S. for smuggling aliens.
|
Requires SSA to suspend
benefits of recipients removed for smuggling aliens. |
Applies to individuals for
whom the Commissioner receives a removal notice from the Attorney
General after the date of enactment. |
| Section 413:
Reinstatement of Certain Reporting Requirements |
| The Federal Reports
Elimination and Sunset Act of 1995 “sunsetted” most annual or periodic
reports from agencies to Congress that were listed in a 1993 House
inventory of congressional reports. |
Re-enacts certain reports
detailing the financial solvency of Social Security, including the
annual reports of the Board of Trustees on the OASDI, HI, and SMI trust
funds, and continuing disability reviews, and disability determinations
so that early corrective action may be taken if needed. |
Upon enactment. |
| Section 414:
Use of Symbols, Emblems, or Names in Reference to Social Security or
Medicare |
| Section 1140 of the Social
Security Act prohibits (subject to civil penalties) the use of Social
Security and Medicare symbols, emblems, and references that gives a
false impression of Federal endorsement. |
Adds to this prohibition
several other references to Social Security and Medicare. |
Amendments shall apply to
items sent after the sixth month ending after the Commissioner
promulgates final regulations prescribing the standards applicable to
the explicit statements that must be provided in connection with such
items. The Commissioner shall promulgate final regulations within
one year after the date of enactment. |
| Section 415:
Clarification of Definitions Regarding Certain Survivor Benefits |
| Under the definitions of
“widow” and “widower” in Section 216 of the Social Security Act, a
widow or widower must have been married to the deceased spouse for nine
months in order to be eligible for survivor benefits. |
Creates an exception to the
nine-month requirement for cases where the Commissioner finds that the
claimant and the deceased spouse would have been married for longer
than nine months but for the fact that the deceased spouse was legally
prohibited from divorcing a prior spouse who was in a mental
institution. |
Effective for benefit
applications submitted after the date of enactment. |
| Section 416:
Optional Methods for Computing Net Earnings from Self-Employment
|
| Section 211 of the Social
Security Act provides an optional method of computing self-employment
income. Different criteria apply for farmers and non-farmers.
When Section 211 was originally enacted, individuals using the optional
method could receive credit for four quarters of coverage in a year.
However, at the present, individuals using the optional method can
receive credit for only one quarter of coverage. That is because
the dollar amount that represents a quarter of Social Security coverage
has increased over the years under a statutory formula; in 2002, it had
risen to $870. By contrast, the optional method is tied to a
specific dollar amount ($1,600) that is set forth in Section 211.
This amount now provides only one quarter of coverage. |
Restores the original intent
of the optional method of computing self-employment income, so that
self-employed persons can receive credit for up to four quarters of
coverage in a year, instead of only one. Also, revises other
criteria for claiming the optional method, including making the
treatment of farmers and non-farmers uniform. |
Applies to taxable years
after the date of enactment. |
| Section 417:
Clarification Respecting the FICA and SECA Tax Exemptions for an
Individual Whose Earnings are Subject to the Laws of a Totalization
Agreement Partner |
| Under Sections 1401, 3101,
and 3111 of the Internal Revenue Code, in cases where there is
“totalization agreement” between the U.S. and a foreign country, a
worker’s earnings are exempt from the U.S. Social Security tax when
those earnings are subject to the foreign country’s retirement system. |
Clarifies legal authority to
exempt a worker’s earnings from U.S. Social Security tax in cases where
their earnings are subject to a foreign country’s retirement system in
accordance with a totalization agreement, but the foreign country’s law
does not require compulsory contributions on those earnings. |
Upon enactment. |
|
Subtitle C: Technical Amendments |
| Section 431:
Technical Correction Relating to Responsible Agency Head |
| Section 1143 of the Social
Security Act directs “the Secretary of Health and Human Services” to
send periodic Social Security Statements to individuals. |
Makes a technical correction,
to reflect SSA’s independence from HHS, by inserting reference to the
SSA Commissioner in place of the HHS Secretary. |
Upon enactment. |
| Section 432:
Technical Correction Relating to Retirement Benefits of Ministers |
| Under the Internal Revenue
Code, certain retirement benefits received by clergy are not subject to
payroll taxes. However, under Section 211 of the Social Security
Act, these benefits are treated as net earnings for acquiring Social
Security insured status and calculating benefits. |
Makes a conforming change to
exclude certain benefits received by retired clergy from Social
Security-covered earnings for benefit purposes (as well as for payroll
tax purposes). |
Applies to years beginning
before, on, or after December 31, 1994. |
| Section 433:
Technical Correction Relating to Domestic Employment |
| Section 3121 of the Internal
Revenue Code and Section 209 of the Social Security Act create an
ambiguity concerning tax treatment of domestic service performed on a
farm. Domestic employment on a farm appears to be subject to two
separate coverage thresholds, one for agricultural labor and another
for domestic employees. |
Clarifies that domestic
service on a farm is treated as domestic employment, rather than
agricultural labor, for tax purposes. |
Upon enactment. |
| Section 434:
Technical Corrections of Outdated References |
| The Social Security Act and
the Internal Revenue Code include three outdated references that relate
to the Social Security program. |
Corrects outdated references
in the Social Security Act and the Internal Revenue Code by (1)
inserting “removal” in place of “deportation”; (2) correcting a
citation to a provision on self-employed health cost tax deductions;
and (3) eliminating a reference to an obsolete 20-day agricultural work
test. |
Upon enactment. |
| Section 435:
Technical Correction Respecting Self-Employment Income in Community
Property States |
| Section 211 of the Social
Security Act and Section 1402 of the Internal Revenue Codeprovide that,
in the absence of a partnership, all self-employment income from a
trade or business operated by a married person in a community property
State is deemed to be the husband’s unless the wife exercises
substantially all the management and control of the trade or business. |
Conforms the Social Security
Act and the Internal Revenue Code to current practice in both community
property and non-community property States. Income from a trade
of business that is not a partnership will be taxed and credited to the
spouse who is carrying on the trade or business. |
Upon enactment. |