Statement of Tony Young, Director, Governmental Affairs, NISH,
Vienna, Virginia,
and Chairperson, Task Forces on Social Security and Work Incentives
Implementation,
Consortium for Citizens
with Disabilities
Testimony Before the Subcommittee on Human Resources
of the House Committee on Ways and Means
Hearing on Fraud and Abuse in the Supplemental Security Income Program
July 25, 2002
Chairman Herger, Mr. Cardin, and Members of the Subcommittee on Human Resources, I thank you for this opportunity to testify regarding the Supplemental Security Income program. I am Tony Young, Director of Governmental Affairs for NISH, one of two Central Nonprofit Agencies responsible for implementing the Javits-Wagner-O’Day Program. I am testifying today in my role as Chairperson of the Consortium for Citizens with Disabilities, specifically representing the CCD Task Forces on Social Security and Work Incentives Implementation. CCD is a coalition of 100 national organizations advocating on behalf of people with physical, mental, and sensory disabilities.
Fraud and Abuse in the SSI Program
Over the last several years, the CCD Social Security Task Force has supported numerous provisions to improve the prevention of fraud and abuse in the SSI program, as well as in the Title II disability programs. We have worked with this Subcommittee, the Subcommittee on Social Security and with the Social Security Administration to ensure that people with disabilities are treated fairly in the process of preventing fraud and abuse. We remain particularly concerned that people with mental or cognitive impairments who may not understand the implications of their actions be properly protected when questions of fraud or abuse arise. We will certainly continue to work with the Subcommittee on these issues.
There is one area, however, which we believe particularly needs to be considered from the perspective of people with disabilities. The chronic problem of overpayments to beneficiaries in both Title II and Title XVI is a major barrier to beneficiaries’ ability to take advantage of the work incentives programs, including the new incentives of the Ticket to Work and Work Incentives Improvement Act (TWWIIA). In and of themselves, overpayments are not a problem in the SSI program. Nor do overpayments indicate fraud or abuse of the program. In fact, the SSI program, through Section 1619 and other provisions, provides strong encouragement to beneficiaries to work if they are able. Work incentives coupled with the SSI retrospective monthly accounting system ensure that virtually everyone who attempts work will experience overpayments. In the normal course of business, the overpayments of one month are adjusted in the third month.
The problems arise when reported earnings are not properly recorded and monthly overpayments are not properly adjusted and grow into large debts. Notice of these large overpayments often comes “out of the blue” for the beneficiary in a letter from SSA requesting the beneficiary to pay back the funds. It is one of the more common and frustrating experiences of beneficiaries and the organizations representing them that beneficiaries who properly report earnings and changes in work status will be notified of large overpayments. This problem is not limited to the SSI program, but also occurs in the Title II disability programs.
It is a long-standing problem in SSA – acknowledged by SSA officials over the years – that earnings reports by beneficiaries are not properly recorded or acted upon by SSA staff. This is where the large overpayments come from. As a result, many people who might otherwise consider attempting to work are afraid to work because they do not want to owe SSA thousands of dollars in overpayments.
As the system now operates, chronic overpayments to beneficiaries result from significant delays in, and sometimes the complete failure of, SSA personnel recording earnings reports for working beneficiaries. We believe that part of the problem may be that SSA workers do not get any credit for this work in their work evaluations. In addition, there is not a well-defined process for beneficiaries to use in reporting earnings. Beneficiaries often tell us that they are very conscientious in reporting their earnings, but the overpayments still occur over significant periods of time. When that happens, beneficiaries are not well equipped to know whether the benefit amount they are receiving is correct or whether SSA has made an error or failed to record earnings. Over time, overpayments build and it is not unusual for beneficiaries to be told to pay back tens of thousands of dollars.
We believe that SSA must establish a reliable, efficient, beneficiary-friendly method of collecting and recording, in a timely manner, information regarding a worker’s earnings. In addition, SSA must adjust benefits in a timely manner. CCD has further recommended that Congress require SSA to forgive overpayments if the beneficiary is not notified within a reasonable period of time. We appreciate the inclusion in the Social Security Program Protection Act of 2002, H.R. 4070, of a requirement that SSA provide a receipt to the beneficiary whenever a change in earnings or work status is reported. This could go a long way in helping to resolve some of the problems with earnings reports.
Modernization of the SSI Program
The CCD Task Force believes it is time to make important improvements in the SSI program and we support passage of the SSI Modernization Act of 2001, H.R. 739.
The SSI Modernization Act of 2001 is an important and much needed step in increasing the ability of people with disabilities and the elderly to improve the quality of their lives. Many people with disabilities must rely on the Supplemental Security Income program for basic income support and the access it provides to critical medical services through Medicaid. Despite severe, lifelong disability requiring on-going support, many beneficiaries attempt to improve the quality of their lives through earnings. Others receive some income from their past employment efforts. Increasing the minimum value of the small amounts of earned and unearned income to be counted by SSI will assist beneficiaries in improving their overall situation and will also reduce the administrative burden of dealing with small adjustments in payments. In addition, removing barriers to education will provide beneficiaries opportunities for further growth and potential for future work.
The SSI Modernization Act addresses several important areas designed to encourage work, savings, and education. These include:
Each of these exclusions, limits, or disregards would be indexed for inflation so that the buying power of beneficiaries’ income is protected.
The bill would also ensure that children who are still in school, including those receiving special education services, would be allowed to finish their education prior to their assessment as adults for the SSI program.
Finally, the bill would exclude the entire amount of educational grants from income and, for nine months, from resources.
We believe that theses modest, but important, improvements to the SSI program will assist beneficiaries while encouraging work, savings, and educational efforts. We believe that these improvements could also help people better meet their ongoing obligations, providing vital resources to fall back on for housing repairs and the like. We urge the Subcommittee to support these improvements.
There is another issue also needing attention regarding retention of Medicaid when SSI benefits are lost upon entitlement to early retirement benefits. The Social Security Act requires SSI recipients to apply for any and all other benefits to which they may be entitled. Included in this group are a small number of recipients who are not eligible for Social Security Disability Insurance benefits because they were not currently insured at the onset of their disability but who are fully insured for retirement benefits, either on their own account or on the account of a spouse or ex-spouse. These SSI beneficiaries are required to apply for retirement benefits at age 62. Some of them have earnings records that result in a high enough monthly retirement benefit that renders them financially ineligible for SSI. The loss of eligibility for SSI for these recipients also results in a loss of eligibility for Medicaid except in the few states which provide coverage for the aged and disabled with an income up to 100% of the federal poverty level. Because the beneficiaries are under 65 years of age, they are not entitled to Medicare benefits and often do not have the financial ability to pay for private health insurance. This result is particularly devastating to these former SSI recipients who are still disabled and are experiencing further deterioration in their health as a result of their increasing age.
The Act allows widows and widowers who lose SSI benefits upon entitlement to early retirement benefits to retain Medicaid coverage. 42 U.S.C. § 1383c(d). This protection should be extended to all SSI recipients who lose Medicaid upon entitlement to early retirement benefits. The number of individuals who would benefit from this extension is relatively small but the protection it would provide them is enormous. We urge the Subcommittee close this gap through which they fall.
SSA workloads are projected to begin increasing rapidly within the next decade as the baby boom generation begins to reach its peak disability years just prior to reaching early retirement age beginning in 2008. In addition, the SSA workforce is also aging and will begin to lose significant numbers of staff, including senior and leadership staff. About 3,000 employees are expected to retire per year from 2007 through 2009. SSA is also taking on new or more complex responsibilities such as providing increased rehabilitation and employment services for people with disabilities, completing and maintaining an appropriate schedule of continuing disability reviews and other eligibility reviews, and new approaches to prevent fraud and abuse.
In FY 1985, SSA’s staffing levels were 80,844 FTEs and 83,406 workyears. The President’s budget requests for FY 2003 include 63,464 FTEs and 64,730 workyears, for a reduction of 17,380 FTEs and 18,676 workyears over the last 18 years.
The CCD Social Security Task Force has voiced concern for some time over the continued long-term downsizing of the SSA workforce. We believe that failure to conduct appropriate and timely CDRs and other eligibility reviews could lead to decreased trust in the integrity of the Social Security and SSI programs. In addition, the new efforts to assist people with disabilities to go to work, through the Ticket to Work and Work Incentives Improvement Act of 1999, require new and expanded approaches for SSA interaction with beneficiaries. Adequate staffing levels are critical for these and other efforts to be successful, especially given the coming disability and retirement years of baby boomers.
For these reasons, we strongly support removing the Social Security Administration’s Limitation on Administrative Expenses (LAE) budget authority from any domestic discretionary spending category. Even if the LAE were removed from the domestic discretionary caps, SSA’s LAE would still be subject to the annual appropriations process and Congressional oversight. Currently, SSA’s administrative expenses total less than 2% of benefit payments paid annually. Congress would still maintain its role in ensuring continued administrative efficiency.
Most importantly, removal of the LAE from the domestic discretionary spending caps would remove it from competition with other programs for limited funds. It would allow for growth that is necessary to meet the needs of the coming baby-boomer retirement years (including the retirement of SSA and state DDS personnel); continue the efforts to improve the processing time for initial applications and appeals; continue the efforts to ensure integrity in the program through CDRs and other redeterminations; and allow for replacement of staff in a timely manner to allow for adequate training and mentoring.
Annually, the Appropriations Committees need to have the ability to approve adequate funds for the administration of the Social Security programs without weakening other human services programs. Without removal of LAE from the discretionary caps, any increases in SSA staffing and DDS funding will require offsets by reductions in other health, education, and human needs programs. It is critical that Congress allow SSA to make necessary investments in building the staffing infrastructure necessary to meet the needs of the population, as well as new statutory responsibilities such as the Ticket to Work and Work Incentives Improvement Act.
Again, thank you for this opportunity to testify on these important issues. The CCD Social Security Task Force looks forward to working with the Subcommittee on these important issues for people with disabilities in the Supplemental Security Income program.
American Congress of Community Supports and Employment Services
American Council of the Blind
American Network of Community Options and Resources
American Association of Mental Retardation
Brain Injury Association of America
International Association of Psychosocial Rehabilitation Services
National Association of Developmental Disabilities Councils
National Industries for the Blind
National Organization of Social Security Claimants' Representatives
NISH -- creating employment opportunities for people with severe disabilities
Paralyzed Veterans of America
The ARC of the United States
Title II Community AIDS National Network (TIICANN)
United Cerebral Palsy Associations, Inc.