Hearing on the Use of Technology to Improve the Administration of SSI’s Financial Eligibility Requirements
Hearing on the Use of Technology to Improve the Administration of SSI’s Financial Eligibility Requirements
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
COMMITTEE ON WAYS AND MEANS
WALLY HERGER, California
|SANDER M. LEVIN, Michigan
CHARLES B. RANGEL, New York
FORTNEY PETE STARK, California
JIM MCDERMOTT, Washington
JOHN LEWIS, Georgia
RICHARD E. NEAL, Massachusetts
XAVIER BECERRA, California
LLOYD DOGGETT, Texas
MIKE THOMPSON, California
JOHN B. LARSON, Connecticut
EARL BLUMENAUER, Oregon
RON KIND, Wisconsin
BILL PASCRELL, JR., New Jersey
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
JENNIFER SAFAVIAN, Staff Director and General Counsel
SUBCOMMITTEE ON HUMAN RESOURCES
ERIK PAULSEN, Minnesota
|LLOYD DOGGETT, Texas
JIM MCDERMOTT, Washington
JOHN LEWIS, Georgia
JOSEPH CROWLEY, New York
C O N T E N T S
Deputy Commissioner, Social Security Administration
Patrick P. O’Carroll, Jr.
Inspector General, Social Security Administration
Director of Government Services, Accuity Solutions
Marty Ford, Director
Public Policy Office, The Arc of the United States
Professor, School of Public Policy, University of Maryland
of SSI’s Financial Eligibility Requirements
U.S. House of Representatives,
Committee on Ways and Means,
The subcommittee met, pursuant to call, at 3:03 p.m., in Room 1100, Longworth House Office Building, Hon. Geoff Davis [chairman of the subcommittee] presiding.
[The advisory of the hearing follows:]
Chairman Davis. Good afternoon. Thank you to our witnesses, staff members, and visitors for your patience. Unfortunately, we don’t control the whip’s schedule for votes. I appreciate your forbearance in the unanticipated delay.
In today’s hearing we are going to review how technology is being used to improve the administration of the Supplemental Security Income, or SSI, program. As the Nation’s largest Federal means‑tested cash assistance program, SSI is sometimes called “the other welfare.” Last month SSI provided checks to more than 8.1 million disabled and aging individuals. For example, that is almost twice as many people as collect welfare checks under the TANF program.
Unlike other Social Security programs which require prior work and payroll tax payments, SSI pays monthly checks to disabled and elderly individuals with limited income and assets regardless of whether they have worked in the past. Since SSI was created in 1972, it has had complex eligibility rules designed to ensure that recipients do not have significant income or assets on which they should depend before turning to SSI for support. How these financial eligibility requirements are working and how their administration can be improved are the subjects of today’s hearing.
It is worth noting that in contrast to other
means‑tested programs like food stamps, SSI has continued to enforce these financial eligibility standards in recent years, which has helped to keep SSI’s growth in check. The administration of SSI’s financial eligibility requirements can be difficult, prone to error, and extremely time‑consuming, draining administrative resources, especially if done manually and using recipient‑reported data.
In 2011, SSI had annual payments totaling almost $50 billion, not including the cost of Medicaid benefits typically provided to SSI recipients. It also had a 9.1 percent error rate, representing a staggering $4.6 billion in improper payments. As I have described in previous hearings, we can and should expect more from government. We should expect it to administer benefits using 21st century technology, not from the era before the personal computer existed.
We have made significant progress in the past year and a half enacting into law our data standards provision to jump‑start a process for defining these standards. And I am very grateful for the true bipartisanship in which members of the Republican and Democratic Caucus worked together to give the tools to repair these broken processes and bring some private‑sector business practices into government.
I believe that SSA can and should significantly contribute to this process. What is more, I believe SSA will also greatly benefit from this effort, and it will improve how they administer all their workloads, including SSI. This is all part of a larger goal of leveraging technology to prevent improper payments of all kinds.
Today we will hear about how SSA has expanded nationwide the Access to Financial Institutions Project, AFI, along with other efforts to better use technology. These efforts have shown that while difficult, income and asset tests can be administered in a timely and cost‑effective manner, improving program efficiency and reducing cost to taxpayers. That is an important lesson not just for SSI, but across all means‑tested Federal programs.
For example, other programs, like food stamps, have recently waived these same sorts of complex eligibility rules, especially asset tests, to speed eligibility determination and expand benefit payouts. As a result, today one in seven Americans is eligible for food stamps, at a cost of over $70 billion in 2011. That is triple the level of food stamp spending in 2002, when the asset test was consistently applied.
In a time of failed stimulus, out‑of‑control spending, and a struggling economy, we can’t continue on the current fiscal path. Efficient enforcement of programs ‑‑ or efficient enforcement of income and asset tests across means‑tested programs will make it possible for limited taxpayer resources to be targeted to those with the greatest financial need. In this, we hope the SSI program can actually show the way.
We look forward to all the testimony today and to working to improve how this program serves disabled and elderly individuals who depend on it, as well as ensuring all means‑tested programs efficiently and effectively use tax dollars.
Chairman Davis. With that, I would like to yield to my friend from Texas, the ranking member Mr. Doggett, to make an opening statement.
Mr. Doggett. Thank you very much, Mr. Chairman.
We have worked together on this subcommittee to ensure safety-net programs effectively collect and use the information to determine eligibility. Because Supplemental Security Income provides modest benefits to aid individuals with disabilities, seniors, disabled children, our most vulnerable neighbors, it is critical that the Social Security Administration uses the most up‑to‑date technology to fully administer the benefits in the most efficient manner and ensure that only those individuals entitled to this important benefit receive it.
But our goal of improving the integrity of SSI as well as other programs is severely threatened by the Republican Appropriations Committee, which would cut about a billion dollars from the Social Security Administration. This comes after cuts in each of the last 2 years for Social Security, and this includes moneys that are essential for combating waste, fraud, and abuse. I believe that this cut means that there will be fewer SSI redeterminations, and there will be less available for other program integrity measures.
Every dollar that is invested in SSI eligibility and disability reviews has produced between $6 and $9 in program savings. Cutting funding threatens the integrity of these programs.
Ensuring an effective SSI program is important to over 8 million senior and disabled Americans who receive important assistance from the program. These benefits are not overly generous, with the maximum SSI payment providing less than $700 a month for an individual, which reaches less than 75 percent of the poverty level. But even at these low levels, this assistance is a vital lifeline for those who have little other source of income.
In my home State of Texas, over 600,000 of our neighbors are helped by SSI, including about 55,000 in Bexar County and 17,000 in Travis County. One of these people is a 37‑year‑old woman who has Angelman syndrome, which includes cerebral palsy, seizures, and profound cognitive impairments. She lives in a group home with other adult women and comes home to stay with her mother 3 days a week. Her mother says, in these words: “Without the option of community living, she would be at home. I would be unable to care for her and would be unable to work. We would be destitute. Her only other option would be a State institution, which is unthinkable.”
As we review current efforts to verify SSI eligibility, we should also consider steps to help SSI recipients comply with program requirements, especially when they attempt to go to work. We could take a major step in that direction by increasing the value of work for SSI recipients. The amount of wages that an SSI recipient can earn before losing some of their benefits has not been increased since this program was first started in 1974, at a time when gas was 50 cents a gallon and the median household income was about $11,000 a year. There is a real need to make a change there. If this earnings exclusion had kept pace with inflation over the last four decades, it would be well over $300 a month now instead of a mere $65 a month. Raising the current threshold would not only promote and reward work, but it would also reduce SSI overpayments to individuals earning very small amounts from employment.
Another step that we should take is to continue an expiring program that helps SSI beneficiaries navigate program rules when they attempt to go to work. Since 2000, the Work Incentives Planning and Assistance program has served nearly half a million SSI and SSDI recipients who are working or attempting to work, but the program is now expiring, and Congress, as with so many other areas, has failed to act.
I recently joined Congressman Becerra in introducing legislation to extend this program and a related one so that we help SSI recipients understand and comply when they move into work. This extension would be funded by the Social Security Administration’s basic administration allocation, so taxpayers won’t be out another dime to do it. We really need for the House to act on it.
I look forward to hearing our witnesses’ views on these and other issues and continuing to work with you, Mr. Chairman. Thank you.
Chairman Davis. Thank you, Mr. Doggett.
Chairman Davis. I would like to remind our witnesses to limit your oral testimony to 5 minutes; however, without objection, all the written testimony will be included as part of the permanent record.
On our panel this afternoon, we will be hearing from Ms. Carolyn Colvin, Deputy Commissioner of the Social Security Administration; the Honorable Patrick P. O’Carroll, Jr., inspector general of the Social Security Administration; Mr. Paul Soczynski, director of government services, Accuity Solutions; Ms. Marty Ford, director of public policy, The Arc of the United States; and Mr. Douglas Besharov, professor, School of Public Policy, the University of Maryland.
Ms. Colvin, please proceed with your testimony.
STATEMENT OF CAROLYN W. COLVIN, DEPUTY COMMISSIONER, SOCIAL SECURITY ADMINISTRATION
Ms. Colvin. Chairman Davis, Ranking Member Doggett, and members of the subcommittee, thank you for inviting me here to discuss how we use technology to improve the administration of the Supplemental Security Income program, or SSI. I am Social Security’s Deputy Commissioner and the Administration’s accountable official for improper payments.
SSI is the safety net in the Social Security Act that guarantees a minimum income to individuals of limited means who are aged, blind, or disabled. In addition to a monthly benefit, SSI eligibility provides recipients in many States with access to Medicaid. We have administered SSI since the early 1970s, when Congress created the program to replace a patchwork of State‑run income‑maintenance programs.
SSI turns 40 this year, and while we now use sophisticated technology to help us administer the program, the design of the program itself has remained largely unchanged. I would like to share with you today some of our best practices and the lessons we have learned over the last four decades.
While SSI has never been simple, over the years Congress and the courts have added many new rules which in turn have made SSI harder to manage. Nearly every change in an SSI beneficiary’s life, from moving to a new apartment to a spouse picking up an extra shift at work, can affect the benefit. Due to the structure of the program, some improper payments are inevitable; however, we continuously look for ways to improve.
Our primary key to success is to regularly review our beneficiaries’ records. These reviews, which we call redeterminations, help to detect changes and to ensure that our information is current. We save $6 in benefits for every dollar we spend, and our redetermination process is highly effective. When we complete more redeterminations, our payment accuracy rate goes up.
Another key to our success is our use of data analytics. We do not have the resources to review every case, so we use predictive models to help prioritize our program integrity workload. This modeling focuses our review on the cases with the greatest return on investment. In 2010, our predictive model for redeterminations helped us save $1.2 billion more than what a random selection would have saved.
We have also learned how important technology is to helping us stay afloat amid staffing losses and growing
workloads. While the SSI program requires the expertise of our trained employees, we successfully automated routine tasks, freeing our employees to focus on more difficult issues.
Verifying the resources of SSI beneficiaries is an important, but error‑prone element of eligibility. Through our partnership with Accuity Solutions, we have developed a creative approach, the Access to Financial Institutions, or AFI, Project. AFI allows us to electronically verify bank account balances as well as discover undisclosed accounts. It is a significant improvement over the paper‑based process it replaced and has been successful in helping ensure that we only pay the right people the right amount.
Technology can also make it easier for our beneficiaries to comply with program rules. One example is our SSI Telephone Wage Reporting System. This system allows individuals to update their wage amounts over the phone and correct their SSI payments before they are overpaid. This application has an additional simplification feature in that our records are directly updated with little or no employee intervention. We are now developing similar wage‑reporting applications for the Internet and smartphone users.
The last best practice that I want to highlight addresses the importance of sharing data across government. We have learned that data matches are critical to detect when beneficiaries have not reported changes to us timely. Electronic data matches have improved our program‑integrity efforts. We have numerous computer matches with Federal, State, and local organizations, and we are constantly looking for cost‑effective ways to obtain new data that will improve our payment accuracy.
Our successes are largely dependent on sustained, adequate funding. I urge you to support the President’s fiscal year 2013 budget request for SSA because we have proven that we deliver. Through the hard work of our employees and technological advancements, we have increased productivity by an average of about 4 percent in each of the last 5 years.
In closing, we continue to look for ways to simplify the SSI program. As we consider changes, we are also mindful of the need to balance benefit adequacy, benefit equity, and program integrity. We look forward to working with the subcommittee on these important issues.
I am happy to answer any questions. Thank you.
Chairman Davis. Thank you very much, Ms. Colvin.
[The statement of Ms. Colvin follows:]
Chairman Davis. Mr. O’Carroll, you are recognized for 5 minutes.
STATEMENT OF PATRICK P. O’CARROLL, JR., INSPECTOR GENERAL, SOCIAL SECURITY ADMINISTRATION
Mr. O’Carroll. Good afternoon, Chairman Davis, Ranking Member Doggett, and members of the subcommittee. Thank you for the invitation to testify today.
For many years my office has recommended that SSA consider all available tools and methods to ensure the right person receives the right payment at the right time. As technology advances, data matches and electronic records are emerging as effective tools to improve payment accuracy in Federal programs like SSI.
Financial and other nonmedical factors can affect SSI eligibility, such as earnings and income, resources and assets, living arrangements, and presence in the United States.
SSA’s Access to Financial Institutions Project, or AFI, is a data‑matching initiative we recommended years ago that helps the agency prevent commonplace SSI payment errors. AFI allows the agency to receive data directly from financial institutions, rather than relying on recipients to report assets that may reduce or eliminate the benefits.
Self‑reporting, or the lack thereof, is a leading cause of payment errors. AFI is now in place in all 50 States, and the agency anticipates $900 million in lifetime program savings for each year it uses AFI.
My office has also recommended that SSA expand its use of electronic databases to verify real property and assets. Last year we estimated that SSA has made improper payments of more than $2 billion because SSI recipients did not
self‑report property ownership to SSA. In recent months, SSA used a real property database in its stewardship reviews. The agency reported the records database was an effective tool, and that SSA would use the database in all SSI reviews in fiscal year 2013.
SSA is also working to collect transactional‑level data from foreign ATMs. This data can identify ineligible recipients because they were outside the United States for more than a month. We recommended this approach in a 2008 audit, which estimated $225 million in overpayments to 40,000 recipients outside of the United States. We are working on a review of SSA’s progress in addressing this issue.
We have also made other data‑matching recommendations to SSA to identify marital status, workers’ compensation, and vehicle ownership. We in OIG use data matches in our work as well, but the Computer Matching and Privacy Protection Act requires formal computer‑matching agreements that can take years to complete. This prolonged process can delay or derail time‑sensitive audit and investigative projects.
In 2010, the Department of Health and Human Services obtained a legislative exemption for data matches designed to identify fraud, waste, or abuse. We are pursuing a similar exemption, which could serve as a vital tool in our organization as we combat fraud in SSA’s programs.
This office also continues to encourage the agency to seek funding to support key improper payment‑prevention tools. For example, SSA has reported that it saves $7 for every dollar spent on redeterminations, which are periodic reviews of an SSI recipient’s eligibility.
In conclusion, it is critical that the agency makes certain that all SSI payments are correct and timely. SSI recipients depend on these payments for basic needs. But it is equally important to protect the integrity of taxpayer dollars through data matches, electronic records, and traditional reviews. I applaud Chairman Davis’ proposal to expand data‑matching across the Federal Government. For now my office will continue to work with your subcommittee and SSA to ensure SSI program integrity and increase taxpayer savings.
Thank you again for the invitation to testify, and I will be happy to answer any questions.
Chairman Davis. I appreciate that, Mr. O’Carroll.
[The statement of Mr. O’Carroll follows:]
Chairman Davis. I still remember that meeting in January of last year that was quite eye‑opening on the complexities the agency faced with data matching. You put a little Irish on the spin of the whole thing for us. We appreciate that moving forward, as Ranking Member Doggett and I began down that path, with data standardization. Thank you.
Mr. Soczynski, you are recognized for 5 minutes.
STATEMENT OF PAUL SOCZYNSKI, DIRECTOR OF GOVERNMENT SERVICES, ACCUITY SOLUTIONS
Mr. Soczynski. Thank you.
Good afternoon. My name is Paul Soczynski. I am the senior director of government services for Accuity, Inc. Chairman Davis, and Ranking Member Doggett and Members, we are grateful for the opportunity to provide our views on technology and how they might be used to improve public benefit programs.
Since 1911, Accuity has been the official registrar of the American Bankers Association U.S. Routing and Transit Codes, a role that requires us to assign and maintain ABA routing codes to every deposit‑taking financial institution in the United States. In our role as ABA registrar, Accuity is required to maintain up‑to‑date information on the 117,000 financial institution locations across the United States. As such, we have earned a unique reputation as the trusted source of information about and for the banking industry.
As you have heard, Accuity currently manages a technology solution to facilitate the eligibility process for the SSI program. In September 2003, Accuity was awarded a contract to develop and implement a pilot proof‑of‑concept program designed to automate the then‑existing manual financial asset verification eligibility component of the SSI benefit program. We designed the asset verification system to include three main components: number one, a secure automated gateway between SSA fields offices and the U.S. financial banking institutions; number two, a comprehensive and accurate database of registered participating financial institutions; and number three, a Web‑based and direct‑transmission Web service technology platform with sophisticated message‑routing logic designed to speed the process and mechanism and optimize the detection of undisclosed financial assets.
Following several years of the pilot, for all SSA field offices in New York, New Jersey, and California, a national rollout did occur. It commenced in July of 2010, and all 50 States are now operational as of June 2011. Leveraging our longstanding position in the banking industry and our unique trusted relationships in the financial institutions across the country, Accuity has successfully recruited and registered to participate in the automated solution in 95 percent of the financial institution locations nationally.
Accuity’s asset verification system has successfully processed millions of automated financial asset‑verification requests and responses utilizing our comprehensive database of financial institutions. Instead of mailing a paper request form to a general financial institution address indicated by the SSI applicant, the request is now sent and received instantaneously through Accuity’s asset verification system. By ensuring the account balance search for each financial institution is inclusive of an institution’s entire branch network and not just a single location, the canvassing and search of financial assets goes beyond local and State borders to include regional and national searches regardless of where the applicant process takes place or where the applicant resides.
The system automatically routes alternative multiple requests to financial institutions based on geographic logic and account detection probability parameters. The search algorithm, refined over many years, ensures the additional financial institutions that are canvassed for possible undetected financial assets. This added step creates stronger program integrity by improving the detection of undisclosed application assets instead of relying solely on the bank account information provided by the applicant.
Accuity has successfully coordinated and implemented direct transmission automation with the largest financial institutions in the country. This direct, end‑to‑end technology reduces the need for human intervention in a high‑volume environment, resulting in optimized efficiency, reduced costs, and high‑speed response turnaround times, thus accelerating the overall determination process for program beneficiaries.
Accuity has been pleased to partner with SSA in proving the value of technology and serving beneficiaries, while preventing fraud and abuse. Based on the success of the asset‑verification technology, Congress passed section 1940 of the Social Security Act. This amendment to the act requires States to implement a comparable electronic solution for aged, blind, and disabled Medicaid population. While the legislation included the requirement for all States to have this implemented by 2013, States have been slow to implement the solution. We are hopeful after initial implementations in various States, that will become a different reality.
We appreciate the opportunity to inform the subcommittee about how our worked developing and implementing a new technology to provide greater efficiency to taxpayer‑funded programs. I would be pleased to provide additional information regarding Accuity’s asset verification system, and I look forward to answering your questions today. Thank you.
Chairman Davis. Thank you very much, Mr. Soczynski.
[The statement of Mr. Soczynski follows:]
Chairman Davis. Ms. Ford, you are recognized for 5 minutes.
STATEMENT OF MARTY FORD, PUBLIC POLICY OFFICE, THE ARC OF THE UNITED STATES
Ms. Ford. Chairman Davis, Ranking Member Doggett, and members of the subcommittee, thank you for the opportunity to testify on the use of technology to improve the administration of the SSI financial eligibility requirements.
As you know, SSI benefits, along with related Medicaid benefits, are the means of survival for over 8 million people with severe disabilities. SSI benefits help people meet their basic needs for food and housing, secure medical care, and pay for medications not covered by Medicaid. SSI also plays a critical role in helping people with severe disabilities live in the community rather than in institutions. We applaud SSA’s continued work in improving its technology infrastructure to improve services to claimants and beneficiaries even during these challenging economic times.
SSA has recognized that the SSI program rules are challenging even for administrators of the program. The program is many times more difficult for SSI beneficiaries to understand and follow. Beneficiaries are under tremendous financial stress when they apply for SSI and while they are using benefits. SSI pays only about 75 percent of the Federal poverty level for an individual. Beneficiaries often experience food insecurity, possible homelessness, and personal and family crisis due to economic hardship. For some, the disability itself adds its own pressures and makes navigating the complexity of the SSI program extremely difficult.
The CCD Social Security Task Force generally supports
SSA’s efforts to use technology to improve the program so long as the improvements do not infringe on claimants’ rights. We have always supported SSA’s work in conducting continuing disability reviews and redeterminations to ensure continued integrity of the SSI and Social Security disability programs.
We recognize that technology can improve the administration’s efforts in these areas; however, many SSI applicants and beneficiaries lack electronic access to SSA or may not be able to understand or navigate electronic communications. For example, a recent study by the Department of Commerce found that in 46 percent of households headed by a person with a disability, there was no computer at home, compared to 20 percent of homes where the head of household had no disability. Sadly, our fast‑growing electronic world is creating new barriers for people unable to cognitively or financially keep pace.
The complexity of the SSI program and the requirements for reporting and maintaining compliance with the rules, combined with the push for increased use of technology, will place increased pressures on those SSI beneficiaries who are unable to navigate in an electronic world. For these reasons we believe that SSA must exercise caution to ensure that beneficiaries are protected. This will require an increased commitment on the part of the administration and the Congress to recognize the increasing difficulties for these beneficiaries and find solutions for them.
Improvements to the process will save time for both beneficiaries and SSA, improve accuracy and timeliness, and hopefully assist beneficiaries who are exploring opportunities to work. We have some very specific recommendations.
Most importantly, SSA requires adequate administrative resources to effectively administer the program, including its financial eligibility requirements. We urge Congress to provide SSA with adequate resources at the level requested by the President.
Additionally, SSA needs to develop a better earnings reporting and recording system, including providing an option for online wage reporting for those recipients who can use it, that allows the agency to promptly adjust benefit payments to help reduce overpayments and remove barriers for people who want to work.
SSA should also consider using its continuing disability review enforcement model to help prevent overpayments before they happen.
SSA also needs to enhance the use and operation of its toll‑free 800 number.
We support continuation of the WIPA and PABSS programs that have already been commented on. That is very important for those people who want to work.
Congress should raise the SSI asset limit and income disregards and index them annually for inflation. While the SSI program has numerous work incentives built in to encourage people to work, the extremely low disregards mean that many SSI beneficiaries’ earnings trigger an overpayment for even relatively modest amounts of work. Nearly half of beneficiaries who work earn less than $200 per month. Increasing the disregards would help beneficiaries and at the same time reduce SSA’s administrative workload.
I will end here and am open to any questions that you have. Thank you.
Chairman Davis. Thank you very much, Ms. Ford.
[The statement of Ms. Ford follows:]
Chairman Davis. Mr. Besharov, you are recognized for 5 minutes.
STATEMENT OF DOUGLAS BESHAROV, PROFESSOR, SCHOOL OF PUBLIC POLICY, UNIVERSITY OF MARYLAND
Mr. Besharov. Chairman Davis, Ranking Member Doggett, other members of the committee, it is a pleasure to be back.
It was a great pleasure listening to the other speakers because it is rare that we have this kind of agreement about the need to move forward, and I was really impressed when I read about the bipartisan work of this committee on the data matching and the modernization of means‑testing programs.
I think I am here a little bit from another world, but let me tell you why I think it is all connected and why I think it is so important. In the other means‑tested programs that I watch, whether it is food stamps, WIC, TANF, and so forth, the process of eligibility determination has become so expensive, and so much of that cost is on the States, that the States look ‑‑ and the Federal Government helps the States to do everything they can to do less eligibility checking. So, for example, we have 1‑year certifications of income in food stamps. So, for example, we don’t have asset tests in food stamps anymore. Maybe a little bit of it is ideological, but the main reason is because it is too expensive to do those things in the modern world, the modern world where data processing and data searching are the low-cost answer.
My question is why should both liberals and conservatives want better eligibility determinations? And I want to spend a few minutes on that because I think that is the crux of this discussion.
It is not that everyone gets more payments under disability or everyone gets more payments under food stamps. It is a very haphazard process, and there is great unfairness. The technical term is horizontal inequity. That is to say, if I am lucky enough to be with a caseworker who says, “Oh, let us forget about this income,” or if I am lucky enough to be with a caseworker who says, “Well, you deserve it even though you don’t formally fall into the rules.” That is just unfair. And the thing about automated systems is it becomes less possible for there to be that kind of unfairness. I think that is very important.
The second thing ‑‑ and I am struck by this ‑‑ is the possibility to do serious reform of the system as a whole and especially its disincentives to work. I was struck by the comments of my colleagues and also Mr. Doggett about the earnings limitations, the set‑asides. Let me mention a few things about that and talk for the 2 minutes I have left about the U.K.
These programs are all interconnected. About 36 percent of SSI households also receive food stamps. If SSI goes down $1, food stamps goes up, I think, 33 cents, if I remember my math on this. If SSI goes up, food stamps go down. And this has to be done by hand. I was going to say across committee jurisdictions, but it is really across agencies at the State and local level. We are in the 21st century. We shouldn’t have to do it that way.
The U.K. has a process of making real‑time eligibility determinations. And it is striking only when you think about U.S. Government actions, because, of course, when you use a credit card to buy something, it is real time. And so the idea that we can’t match what is happening in the U.K. is striking.
What the U.K. has been able to do (because it had a process of systematizing eligibility across programs), is to deal with the work disincentives embedded in these programs, whether it is the income set‑aside, whether it is an earnings disregard, and whether it is the effect of food stamps.
As you probably know, depending on the family, and depending on the income, marginal tax rates in this country for means‑tested programs can be over 100 percent, which is you earn 1 more dollar, and you owe the government more than $1. In the U.K., they have been able ‑‑ and it started under the Labor government, not just the Conservative/Liberal Democrat coalition — to reduce the maximum marginal tax rate to 65 percent. Many of us wish it is not that high. But I think this is the promise of modern technology.
I hope that this committee will be able to pursue this topic this year and in the years to come. Thank you very much.
Chairman Davis. Thank you, Mr. Besharov.
[The statement of Mr. Besharov follows:]
Chairman Davis. The trend in some means‑tested programs like food stamps has been to waive complex eligibility rules, especially asset tests, in order to speed eligibility determination and expand benefit receipt. In the manufacturing world that I grew up in, in business, we call that expediting, where you step aside from established processes and rules, and in the long run you can actually create more cost. And thus, the more you process, the higher your cost per item until it completely flips the cost structure upside down on what we call customer service or the equivalent of a banking transaction.
States, especially when spending Federal, not State, dollars, seem less interested in making the administrative effort needed to effectively verify income and asset levels, thus suggesting they need a stake in this game as well. But as a result, today one in seven Americans is eligible for food stamps at a cost of over $70 billion in 2011, three times what it was in 2002 when the asset test was more consistently applied.
Listening to all of your testimony today, it appears technology solutions exist to overcome these administrative barriers, or islands of excellence in various parts of government and out in the State, but not connected in an integrated manner yet. For asset verification under AFI, banks are responding in an average of 7 days, with more than a quarter reporting back in 24 hours, which is a big step forward. Meanwhile the United Kingdom is moving to a system with real‑time wage data.
Mr. Soczynski or Mr. Besharov, are any of the issues and solutions we have talked about today unique to the SSI program versus other programs? Go ahead, Mr. Soczynski.
Mr. Soczynski. No, actually they are not. And I think that is the applicability of the Medicaid solution in similar environments. The connection between the government agency and the financial institutions to share that account balance information is applicable and transferable to other such programs.
Chairman Davis. Mr. Besharov.
Mr. Besharov. I think that is right. I agree. The one thing I would add to that is something that you mentioned, Mr. Davis, and that is the fact that States share in the cost of eligibility and administration, but not in the cost of the actual program. That is a formula to encourage cutting back on eligibility determination. Not only does the State save money that way, but easier eligibility brings more money into the State.
One thing I would like to also mention, since these rules are different across programs, TANF to food stamps to disability, and other programs as well, (housing), you incentivize States to game the system. Many people wonder why the TANF program hasn’t grown in this time of economic difficulty. There are many reasons; who is affected, unemployment rates, and so forth. But I think one very big reason is States pay all of TANF costs. They pay none of food stamps cost. And so why should we be surprised if the food stamp caseload has gone up and the TANF
caseload has not? And the same for the disability
caseload. So these incentives that are built into the system create distortions that we should all be uncomfortable with.
Chairman Davis. Ms. Colvin and/or Mr. O’Carroll, in your interactions with other agencies, do you see the same types of issues? In fact, have any other agencies approached you, or have you shared your experience with others in terms of trying to streamline the integration of processes?
Ms. Colvin. I have found that there is a very strong interest among other agencies. Let me speak first to the State level, though, because I came out of the State. I administered all of the means‑tested programs at the State level.
The States are very interested in innovation and creativity. They are interested in automation. For them it has been a big resource issue. Unlike at the Federal level, where you have one agency administering the program, many of these programs are administered at the local level in addition to the State.
But at the Federal level, we have a Benefits Processing Work Group. We have presented AFI to them. They are very interested. I think the standardization of data that you are proposing will be helpful.
But we have been working with most of the benefit‑paying agencies like VA and CMS and the Office of Child Support Enforcement. And there is a very strong interest, and we are continuing to work with them in that regard.
Chairman Davis. Mr. O’Carroll.
Mr. O’Carroll. Mr. Chairman, I agree that working with the other departments and other agencies on this is very important, and woven into this are the matching agreements between all the agencies.
We can’t compare data with other agencies that are doing the same type of work that we are doing, trying to identify income and wages and other information. We can’t do that without a matching agreement. It takes years, and usually by the time we get the agreement, the issue is over. So anything you can do to help us in terms of getting access to data without computer matching agreements between Federal agencies to identify improper payments will be very helpful.
Chairman Davis. Thank you very much.
Mr. Doggett, you are recognized for 5 minutes.
Mr. Doggett. Thank you, Mr. Chairman, and thanks to all of our witnesses.
Commissioner, let me ask you, I referenced in my opening statement this proposal that has been approved in an Appropriations subcommittee to cut the billion dollars from what the President proposed for the Social Security Administration. What is the impact of that on your efforts to reduce waste, fraud and abuse, and on all of your program integrity activities?
Ms. Colvin. Let me just summarize what the impact is going to be for us. There is going to be a severe impact within the agency. I don’t have the specifics under the proposal, but it should be recognized that we had significant cuts in 2011 and 2012. As you know, we have had to close offices and reduce office hours. We have had a hiring freeze on. We have lost about 7,000 employees over the 2 years, and we are making other draconian cuts. We would have similar experiences under this bill.
There is also going to be a significant reduction in our program integrity dollars. We have indicated that we already see a return of $9 for every $1 with our continuing disability reviews, and $6 saved for every $1 spent with our redeterminations. The bill significantly reduces the amount of funding that would be available for that work, reducing it from $756 million in fiscal year 2012 to $272 million in 2013. So that is going to be a significant reduction in our ability to do program integrity work.
But more importantly, the service to the public is going to take longer. It is not going to be the quality that we have been able to provide in the past. I don’t have at this time specifics relative to this proposal, but you can conclude that the impacts will be very similar, if not even worse.
Mr. Doggett. We had the Social Security Commissioner himself at the Social Security Subcommittee the other day talking about the impact this would have on disability determinations; for example, where we have big backlogs and delays already that the Social Security Administration had been working to try to reduce, that now, without adequate resources, there will not be the quality of service.
You actually have already, as you mentioned, had to close some offices. And we can foresee more of that type of thing if you don’t have the money to deliver the service. And this is coming from some of the same type of people that are always talking about waste, fraud and abuse, and yet the resources needed to ensure we don’t have waste, fraud and abuse are being denied to the Administration, which I think is a very significant shortcoming.
Thank you for your testimony.
Ms. Ford, I would like to ask you about another program that I mentioned in my opening statement, and that is the Work Incentives Planning and Assistance program that is about to expire. Would you review the type of assistance it provides and comment on if it is not renewed, what the effect will be on those who rely on it.
Ms. Ford. Yes, thank you.
The grants from the WIPA, or Work Incentives Planning and Assistance, go to local nonprofit and other agencies to support outreach, education, and benefits‑planning services for people who are using SSI or the disability benefits under Title II about work incentives and supports for finding, maintaining, and advancing in employment. So this is all aimed at assisting people in getting work, staying at work, or even increasing their work effort or advancing in their employment.
Beneficiaries are informed about what will happen with their employment and what kind of medical coverage they can get. It addresses the concerns that beneficiaries have, their fears about whether they will lose the protections that they have in terms of medical coverage. It is basics benefits counseling: what will happen if you work; what will happen if you attempt work, are not able to continue, and have to come back into the program; or if you are able to be successful and continue on into the work world. It was designed to provide that one‑on‑one assistance to people who want to try to leave the rolls.
Mr. Doggett. Those are individuals that may not always be the first choice of an employer to take a job, and individuals that may be taking their first job or have had difficulty getting a job who really need that assistance. It is good for the employer and the individual employee.
Ms. Ford. Correct, yes.
Mr. Doggett. Thank you very much.
Ms. Ford. I agree.
Chairman Davis. I thank the gentleman.
The chair now recognizes Mr. Paulsen form Minnesota for 5 minutes.
Mr. Paulsen. Thank you, Mr. Chairman.
Let me ask Mr. O’Carroll a question, because in your testimony you mentioned that SSA should conduct certain redeterminations and limited issue reviews when it discovers changes in circumstances that might affect an SSI recipient’s eligibility or benefit amount.
Are there any other ways that SSA can help determine if an SSI beneficiary has additional income or resources besides the beneficiary just simply telling SSA this information and then SSA trusting that self‑reported information?
Mr. O’Carroll. Mr. Paulsen, a very good point. Since it is self‑reported, a lot of times SSA isn’t finding out about it, and needs to use other forms of data matches and indicators.
Some of the things that we have been looking at or we recommend that SSA be doing is, one, taking a look at its own records; taking a look at the master earnings file, comparing that against recipients to see if they are showing any income and taking a look at the earnings suspense file to see if there are any earnings that are being reported there.
But then the other major thing SSA could be doing is dealing with the IRS, getting 1099 information from IRS, which would show that people are getting access to pensions, other forms of wages, gambling income, that type of information. So that is very important. And then also matching data with the States.
So it keeps coming back to that all the government agencies need to be talking to each other and comparing this type of information.
Mr. Paulsen. Good.
And then the Unemployment Insurance program is also a program that is under this subcommittee’s jurisdiction. It has got a 12 percent error rate, with more than $13 billion in improper payments that went out last year. So in that program the largest source of error involves individuals going back to work without then reporting that they are going back to work, and then continuing to actually receive benefits. That is a situation that is a little bit similar to the SSI overpayment discussion.
Mr. Soczynski, is there any potential in your system to help identify wages?
Mr. Soczynski. Not specifically in our system. The information that is provided by the banking industry is account balance information. However, Accuity and one of our partners, Early Warning, is involved in a research project with the Department of Labor at this point attempting to find easier ways to find out if someone has gone back to work while still claiming unemployment benefits faster than is reported through the current data‑generation system now.
That pilot should be kicking off shortly. It will involve three States participating in that: Maryland, Illinois, and Missouri. And we expect that by the end of the year, we will have some information on whether or not ‑‑ not necessarily through our AFI program, but through an identification of other databases ‑‑ if we can identify people back to work sooner than they are going in to claim that they are no longer needing unemployment benefits.
Mr. Paulsen. Mr. Besharov, maybe you can answer. Are there other programs that you see that need timely and accurate wage information? Do you have any other thoughts? How should they get it in the future?
Mr. Besharov. Well, I think, first of all, it would help to have one fundamental reform, which is what Chairman Davis said, which is have the States have some skin in the payment process, not just the administration process. That would focus some attention and deal, I think, with some of the issues about encouraging modern information technology. We need the States to want the system to work better. And it is not just audits that will do it. They have to feel that it costs them money to have inaccurate systems.
It is the case across many of these means‑tested programs ‑‑ food stamps come to mind. You mentioned UI. WIC is another program. About 53 percent of all newborns receive WIC benefits. And this is supposed to be a program for just those who are nutritionally needy. At some point it would be good to have better evidence and better information about student loans, student grants. It goes across the board where you see we have given up the process of enforcing the rules, and we are now having to catch up for almost 40 years of inaction. We started thinking people would just tell us when their income changed.
And I just want to mention this before closing. People don’t believe this, but there was a President who said, we don’t need any of this recordkeeping. People should just tell us what they need, and we will send them a check. The President’s name was Richard Nixon. It was the last time we talked about a benefit that had no double‑checking of actual wage information, and it is time for us to double‑check as best we can across all means‑tested programs.
Mr. Paulsen. Thank you, Mr. Chairman. I yield back.
Chairman Davis. I thank the gentleman.
The chair now recognizes the distinguished chair of the Republican Policy Committee, the gentleman from Georgia, Mr. Price.
Mr. Price. Thank you, Mr. Chairman. I appreciate that.
This is an interesting panel. I don’t envy any of you who have the responsibility for administering this. I think 40 years is probably the accurate timeframe for when we put in place a program that is extremely, extremely difficult to make work on a day‑to‑day basis.
Ms. Colvin, you referred to that in your opening comments, and I want to commend you for that.
Our hearing is entitled “The Use of Technology to Improve the Administration of SSI’s Financial Eligibility Requirements.” I think if you break that down, what that means is that we all want to make certain that those who should be receiving benefits are receiving benefits for which they are eligible, and those who shouldn’t dont. That is the unanimity that I think you talked about.
So if I step back from this and would ask you, challenge you to step back, if the slate is clean, what are the one or two things that you think are imperative to making a system work that allows us to utilize the technology of today to assist in the administration of SSI’s financial eligibility requirements? If you wipe the slate clean…
Ms. Colvin, any thoughts about that, if you were not encumbered by the current system?
Ms. Colvin. Well, I think that having standard definitions of what is income and are resources would be important. The complexity of being able to each month look at someone’s circumstances, whether or not they have had income that month or if their resources have changed, is very, very complex. We have to look at whether or not they received benefits from someone else who may have contributed to their care. So it is the whole complexity of the program.
We have in the past presented ideas to simplify the program, but I think the automation that we are using which allows us to be able to do this without having to do it manually, where we can do data exchanges ‑‑ we have 1,500 data exchanges with local and State government, we have many with our Federal agencies so we can compete ‑‑ that has helped us.
But it is the complexity of the program. If we could find some way to simplify so we do not have to look at these changes every single month. Many times we are looking at it retroactively. For instance, if we give the correct check to someone for SSI, we give it to them at the beginning of the month, but they may get income during the month, and then that makes them overpaid. So it is the complexity of the program. We need to find a way to simplify it.
I would be very happy to provide some ideas for the record, but I am not certain I can come up with any off the top of my head right here.
Mr. Price. Mr. O’Carroll, one or two silver bullets?
Mr. O’Carroll. Well, the first one, as my esteemed colleague just brought up, is reducing the complexity of it. With the alerts and these matches where we are either using third‑party databases or other government information, it still requires that the claim rep at SSA, when they get that information, develop it, talk to the person, and find out what the truth is. And that is a whole other step that is needed. So no matter what we are doing in terms of data matching, it still comes down to human intervention in that interview. And that is part of the issue of complexity.
Mr. Price. Mr. Soczynski, one silver bullet.
Mr. Soczynski. One silver bullet. Well, thinking that I had the opportunity to listen to a few ahead of me, but clean slate, back to the future? You know, we have got silos. We have got so many disparate databases in so many places that trying to pull all that together into a big interface, you know, that is the future. That is the Star Wars of the technology is to really find a way to reduce the multiple places the information is filed State by State, agency by agency, and try to get it all connected, because the data is all there. It is a way of just having it available for the right person to use it at the right time.
Mr. Price. Ms. Ford, do you agree?
Ms. Ford. In addition to what Commissioner Colvin had said, I would say updating the income and asset levels to reasonable amounts, at least to the level they would have been were they indexed to inflation since the beginning. We are spending ‑‑
Mr. Price. I don’t know if that is a clean slate item, but I appreciate that perspective. I am running out of time, but I want to get Mr. Besharov up, if I may.
Ms. Ford. My main point is we are spending an enormous amount of administrative resources to chase nickels and dimes.
Mr. Price. Sure. Absolutely.
Mr. Besharov. I lead a program on comparing what we do to other countries. The social democracies of Europe and Asia are a little bit complexifying the program to simplify it. So they have a category called “temporary disability.” And the thing about temporary disability, it is easier to get people on, but it is easier to get them off.
The other thing they have is they have partial disability. And so it is easier for them to help someone find a job because they don’t have these earnings penalties. Some people are just partially disabled. We need room for that in the system in a way so that the rehabilitative side of the program, which we haven’t talked about, has some way to play out.
So that would be my blank slate.
Mr. Price. Thank you, Mr. Chairman.
Chairman Davis. I think the gentleman.
And the chair now recognizes the distinguished gentleman from Georgia, Mr. Lewis for 5 minutes.
Mr. Lewis. Thank you very much, Mr. Chairman. Again, thank you for holding this hearing. I want to thank all of the witnesses for being here.
Director Ford, what can Congress do to help SSA and the disability community to give support to disabled recipients so that they can return to work when they are able to do so? I guess this is in keeping with the line of questions that my good friend from Georgia Dr. Price raised.
Ms. Ford. Well, I think that making it easier to go back to work, increasing those income and asset limits so that you are not hitting against those complexities in the program every time you earn just a little bit of money. Those complexities frighten people. Hitting overpayments every time you earn even a little bit of money is very difficult.
Ms. Ford. And being creative, we need to look at making it easier for people to work. The SSI program does have work incentives in it. It needs to make it simpler, though, so that people are not frightened when something happens.
We do already have a way, through the section 1619 program, for people to maintain their eligibility for Medicaid so that they don’t lose that support system. And very often people who have very severe disabilities need to maintain their long‑term services coverage (or their long‑term care coverage) through the Medicaid program. That is very, very important. We are talking about people with very severe disabilities here. So that is very important.
Simplification of work incentives is critical, because otherwise it becomes too complex. We are talking about a program that is already very, very complex. And for people who are eligible for both Title II and Title XVI, the complexities become almost too great to surmount. The rules are very different.
Mr. Lewis. Thank you.
Commissioner, the SSI program rules are very complicated. You probably know that better than anyone. They are very complicated. Apart from new technology are there ways to simplify the rules to make the SSI program less burdensome to administer and either for a recipient to understand? How can you make it simple?
Ms. Colvin. I don’t have an immediate response to that because it is so complex. We would be very happy to work with you on, ideas that might be worth exploring. But each time a change is made, probably for a good reason, it makes the program even more complex. So if you just were to roll out all of the changes that have been added on to the program over the last 40 years, each one of those makes it more and more complex. When you have got to look at someone’s income and resources every single month, and regardless of how small that change is, it impacts or may impact their benefit, it becomes very difficult.
Mr. Lewis. You don’t have a way in this new age of technology to just push a button?
Ms. Colvin. No, we don’t have that. We do, as I said, have a lot of data exchanges, so we are able to get information about wages from IRS or the Administration for Children and Families, new hire directory, and some of the other pensions that they receive, et cetera. But, for instance, if someone’s living situation changes, they have to report that. There is no button that we can push. And once they report it, we then have to verify it. So it is a very complex process.
Even with the reports that we get, for instance, like AFI, which is considered a third‑party report, we have to verify that. We can’t just accept that. So it is a very complex program.
Mr. Lewis. Anyone else have any suggestion, or recommendation, or some magic, I guess you call it a silver bullet?
Yes, Director Ford.
Ms. Ford. I would mention that in my testimony we did comment on Social Security’s proposal for a work incentive simplification project (WISP) which is aimed at Title II, but might be able to help those people who are concurrent beneficiaries of Title XVI and Title II who want to try to work. WISP is one initiative that we would support moving forward on.
Mr. Besharov. If I could, just to give a plug again for what this committee has been doing. I sat in on a planning session at the Labor Department, and somebody asked the question, why was it so difficult and so expensive to do research on workforce development programs? And the head researcher from the Labor Department said, because for each contract, the contractor has to spend $1 million collecting the data from the States. And someone said, well, doesn’t data come to you, the Department of Labor? No, says the Department of Labor, and when it comes, we can’t use it because it is all in different kinds of pieces.
So it sounds so unromantic, but I think the work that this committee is doing on data simplification, data similarities, and codification is the first essential step to much more data sharing electronically. It is very important. It seems so mundane, but it is tremendously important.
Mr. Lewis. Thank you.
Thank you, Mr. Chairman.
Chairman Davis. I thank the gentleman.
Ultimately if we are going to address the deficit and spending issues, it is going to be by fixing the engine and not external or symptomatic changes. We are hopeful. These technologies exist today all around us. It is a question of removing the statutory barriers, which the inspector general and I have talked about in the past and others. But I appreciate the conversation so far.
With that, we recognize Mr. Berg from North Dakota for 5 minutes.
Mr. Berg. Thank you, Mr. Chairman. I thank the panelists. I appreciate the passion that is coming out and what we are doing here, which really does seem mundane and boring, but can have pretty dramatic effects.
As you know, the pressure to reduce error rates is critical. And the return, the payback is pretty dramatic. Obviously, the challenge is if we can prevent an overpayment from happening, that is a lot easier than trying to recoup money after that money has gone out, for people trying to understand why that error was made and correct that whole process.
So I guess just really on the big picture, Mr. O’Carroll, I would like you to tell us what the most common SSI issues are that result in overpayment, and are they preventable?
Mr. O’Carroll. Mr. Berg, as I was saying in earlier testimony, the biggest issue is the self‑reporting of SSI recipients. When you are talking about your assets, what is your income, what your property is, all those are the biggest issues. SSI is a means‑tested program, and you have to trust the person is giving you the right information. I think what we are talking about today is finding ways to verify that information the person has given and if any of the circumstances have changed.
Mr. Berg. So how would you prevent that? I am assuming that when it relates to property, that is probably a big issue that could have a wide variation of opinions on what the value is or if there is value. What jumps out and says, this is where it is really hard to determine?
Mr. O’Carroll. Well, the biggest part of determining eligibility is the redeterminations that we have been talking about. When those indicators come up, that is the point when you have to bring in the recipient and speak to them and find out whether or not they have the resources. And unfortunately, one of the big issues with the resources of SSA is that we need a balance there between stewardship and service. And what we are saying is we need to have more resources put towards stewardship. So when you get those indicators, you are bringing the people in, you are checking to see if their circumstances have changed.
And I think that is one of the issues that we would like this committee to help with is for SSA to be given an integrity fund or a fund that is earmarked just for stewardship work where, when resources are limited, that there will always be the resources there to do the redeterminations, the continuing disability reviews, the cooperative disability investigations that we do, that is probably the best prevention, Mr. Berg.
Mr. Berg. Thank you.
I yield back, Mr. Chairman.
Chairman Davis. I thank the gentleman.
The chair now recognizes Mr. Reed from New York for 5 minutes.
Mr. Reed. Thank you, Mr. Chairman.
And thank you to the witnesses for your testimony today.
Ms. Colvin, I wanted to follow up on some prior testimony from the change in priorities that we have received from the Commissioner in prior hearings that I see in this area at SSA. And there was some direct testimony from the Commissioner about the fact that he was processing incoming eligibility cases over the postentitlement checking and making sure that overpayments are getting looked at and corrected. Has that been the case in your experience in the agency; has that priority shift occurred?
Ms. Colvin. I don’t think there is a priority shift. We try to balance both of the workloads, both our program integrity and our direct service. If you have someone who walks into an office, you have to serve them. Or if someone calls you on the telephone, you have to serve them. And then that work is not finished. You have got to take action as a result of that call or that visit. So certainly that moves to the front of the pile, but I think clearly we have tried to balance that.
Now, we do all of the redeterminations and the CDRs for which we are funded, and we are certainly doing other kinds of things like our Centenarian Project and other kinds of projects that we try to use to identify any overpayments or anyone who is getting a benefit who should not. So I would say it is a continuous effort to balance the workload.
Mr. Reed. So when the Commissioner came and testified to us in previous hearings that there was a conscious decision on his part to switch the priority to incoming eligibility claims at the expense of postentitlement work, the Commissioner’s testimony was inaccurate?
Ms. Colvin. Now, I can’t speak to that because I am not aware of that testimony, so I am certainly not going to contradict what he would say. But I am responsible for the program integrity initiative in the agency, and I have not seen that getting shifted. We have been pushing that as we always have.
Mr. Reed. So from your experience at the agency, that priority shift has not occurred?
Ms. Colvin. I would say since I have been there, there is still a focus on program integrity work.
Mr. Reed. Wait. But that didn’t answer the question. Was there a shift ‑‑ there is always a focus on everything you do?
Ms. Colvin. I can’t speak to whether or not there has been a shift. I don’t know what timeframe that testimony was given. I would be very happy to provide you an answer for the record. But I am not aware that there has been a shift of not doing program integrity work and instead doing ‑‑
Mr. Reed. Incoming eligibility determination.
Ms. Colvin. Right, right.
Mr. Reed. That is fair.
And then I was going to ask, one of the issues I see here is that the qualification for the benefits changes, as we point out, as you pointed out, are midmonth many a times, and as the individual is eligible for the benefits, things change. Has there been any exploration of technology? I know there is some testimony, Mr. Besharov, from you, in the U.K. there is realtime reporting wage technology that is out there that the U.K. is relying on. Is there anything in the agency’s point of view, Ms. Colvin, warranting to get to that realtime data?
Ms. Colvin. Thank you for that question. Yes, we have the SSI telephone wage reporting where an individual can call in and report any change in their wages during the month. Right now it is a telephone call. We are moving that application to both mobile phone services as well as Internet services. We want to make it as easy for people to be able to report changes as possible. We think that will go a long way.
Mr. Reed. Now, that is self‑reporting from the individual. I understand in the U.K. ‑‑ and I will move over here to Mr. Besharov ‑‑ the U.K. realtime data, that is different?
Mr. Besharov. That comes from the employer. And so as soon as there is a change, the employer sends the information to Her Majesty’s Revenue and Customs.
Mr. Reed. My understanding, I mean, I had four small businesses before I came to Congress, and I was doing my weekly deposits, I was doing my payroll, and right there you have it all listed. You have got your Social Security number. Is there a roadblock between the IRS and that reporting data, that instant wage, weekly deposits that are occurring, not getting over to SSA to simply check what is happening during that midstream?
Ms. Colvin. Right now the wage reporting from the IRS is yearly. We have had proposals in to do it quarterly, but there has been concern about the impact on small businesses.
Mr. Reed. Now, what impact on small businesses? They are already reporting the data from a majority of the cases.
Ms. Colvin. Well, they would have to report it more frequently to the IRS to be able to report it to us. We get a yearly report. It is usually about 18 months, I think, by the time we get it, so the information is old when we get it. And we do, in fact, then go back and make changes as a result of that, but you have already incurred overpayments.
We are entering into a contract with ‑‑ and I don’t remember the name of it now ‑‑ that would allow us to have a contract with large ‑‑
Mr. Reed. Ms. Colvin, if I could reclaim my time. Because that is not my understanding of the process of how it works. And when I sign those payroll statements, and when I deposit it, is that an accurate statement that the wage reporting information is only prepared at the end of the year for the IRS?
Ms. Colvin. I said we only get it at the end of the year.
Mr. Reed. You only get it. But if you got it earlier ‑‑ well, my understanding is the IRS does get that information earlier. It gets it on a weekly basis with the deposits. So if you got that information earlier, would that help you with this issue?
Ms. Colvin. Absolutely.
Mr. Reed. And would you advocate for that?
Ms. Colvin. I would advocate for getting it sooner, absolutely. And as I was mentioning, we are entering into an agreement with an organization called The Work Number, which is a large payroll provider for employers that will, in fact, make information available to us more immediately. These are your large employers like Walmart and some of the other kinds of businesses.
So we are just beginning to look at that. We think that will also help us to get the wage data sooner than we currently are able to get it. But anything that would allow us to get that information sooner would, in fact, allow us to reduce the overpayments.
Mr. Reed. And you would be supportive of that?
Ms. Colvin. Yes.
Mr. Reed. Okay. Thank you.
Chairman Davis. The gentleman’s time is expired.
And the chair now recognizes Mrs. Black from Tennessee for 5 minutes.
Mrs. Black. Thank you, Mr. Chairman.
And I want to thank the panel for being here today. It has been very instructive. And I want to follow through on what my colleague was just talking about.
Mr. Besharov, I want to go to you and talk a little bit. If you can ferret out a little bit more, in looking at best practices ‑‑ and I think that is something we always should be doing is looking at how somebody else is doing, and do they have a better widget or a better way of doing it than what we do ‑‑ can you ferret out a little bit more for me on what the U.K. is doing that we would like to model? What would be a good thing?
Mr. Besharov. Thank you.
I think first and foremost they have identified that people who are labeled as disabled have different levels of disability, and with social help many of them can work. And I think that is an important social idea.
I had lunch this afternoon with the senior assistant to Iain Duncan Smith, who I think you had here a few weeks ago at a hearing. They have just conducted the next phase of their review. Seventy percent of the disability recipients in the U.K. were found to be either not disabled or only partially disabled. And the idea is not to throw them off, but to help them.
So I think one thing we can learn from this is that our system, which was created a long time ago ‑‑ part of our disability system we inherited as we tried to create something from the States ‑‑ if we looked at this and compared it to what other countries are doing, I think we would decide, number one, that there are things called temporary disabilities, and the advantage of a temporary disability is that people don’t have to wait a year or more to get on benefits because we are not worried that it is a permanent decision. The decision can be reviewed a year or 6 months later. It is much easier to review a decision when an initial decision was only temporary. It is easier to turn that decision around.
Secondly, there are different levels of disability, and it is not just a question of allowing people to work, but giving them a little bit of a nudge. We think your disability is such and such; we think you can earn a certain amount. And if we look at other countries, what we see is the incentives that they create on top of those rules can often be very powerful.
A person who goes to work in the Netherlands from a partial disability, designated having a partial disability, is able to earn more than the amount of the disability payment would have been. Now, we say, well, that is just going to cost us money, but it turns out that that moves so many more people into work, that the government ends up saving money.
We should be able to ask these questions, and the only way you could ask them and answer them is to have modern data systems and have a system that understands that it is not just asking people if they want to work. We have to encourage them a little, and we have to give them the financial incentives if they take a job that we will respect the fact that they took a job.
Mrs. Black. So looking at the analysis and the data from the U.K., can we then assume from that that they have less people who stay consistently on their SSI? Do they have people moving in and out of the program and, therefore, a total number that is less than what we have here in the United States? Is that an assumption we can jump to or not?
Mr. Besharov. I don’t know enough about the program, but I wouldn’t jump to that conclusion. If we look at other countries like the Netherlands, which had a much larger problem, we know that when these rules are imposed, the total number of disabled goes down. But in this country it really would depend on what the error rates are and whether the incentives would help people who are only partly disabled.
I know this is only anecdote, and there are experts around the table, but I come from the welfare world, and I can tell you what I am told. If someone spends 6 months, a year, or 2 years getting on a disability program, and then the first thing that happens is they get a letter saying, well, why don’t you go look for a job ‑‑ am I right about that? And so what I am told is there is a certain, wait a minute, now, I am not going to mess up what I waited so long to get.
So I think part of the problem is the structure of the program which creates such a high hurdle to get in that it is difficult to get out.
Mrs. Black. I know my time is going to run out here. The other question that I would have ‑‑ and each of the panel members, this would be something for you as well. I know you are not going to have time to answer it. You may be able to do that follow‑up in writing for me ‑‑ but in just breaking down silos, which silos would you need to break down to have a system that you feel would be working together, where you would have the right hand knowing what the left hand is doing?
I think that my colleague had already rooted that out in, Ms. Colvin, you getting information more quickly. So there is a silo there that needs to be broken down so that it can ‑‑ and you all have been doing a good job, and in reading this notebook I want to commend you on that, but we still have a ways to go.
So thank you so much, Mr. Chairman, and I yield back the remainder of my time.
Chairman Davis. I thank the gentlewoman. I want to thank all of you on the panel for your thoughtful perspectives on these issues. We appreciate you investing the time to come in and talk about the experience in SSI that can be transferable to other means‑tested programs.
If any Members have additional questions, they will get them to you directly. We would ask that you submit them. They will send them to you in writing. If you would submit your answers also to us for the record so they can be inserted for all to see, we would appreciate that.
Chairman Davis. Thank you again for being here, and this hearing is adjourned.
[Whereupon, at 4:21 p.m., the subcommittee was adjourned.]
Additional Witness Information