House Passes H.R. 4070, "Social Security Program
Protection Act of 2002"
On June 26, 2002, the House passed H.R. 4070 (by a vote of 425
yeas to 0 nays), the "Social Security Program Protection Act of
2002." The House-passed bill includes the following provisions.
Authority To Reissue Benefits Misused By Organizational
Representative Payees
- Would provide for the reissuance of title II, title VIII, and
title XVI benefits in case of benefit misuse by an organizational
payee or an individual payee who serves 15 or more beneficiaries.
Under present law, benefits can be reissued only where there was
negligent failure on SSA's part to investigate or monitor the
performance of the payee. In all other cases, the individual loses
his or her funds unless SSA can obtain restitution of the misused
benefits from the payee, or unless the individual obtains
restitution from the payee through other means, such as a civil
lawsuit.
- Would define "misuse of benefits" by a representative payee in
titles II, VIII, and XVI. Present law provides that benefits paid
to a representative payee on behalf of an individual are for the
individual's "use or benefit", but does not contain a definition
of misuse.
- Would provide that reissued title II, VIII, and XVI benefits
would be excluded from resources for purposes of determining SSI
eligibility for 9 months after the month in which the reissued
benefits are received.
- Would be effective with respect to misuse determinations made
on or after January 1, 1995.
Oversight of Representative Payees
- Would require that, in order to receive a fee for serving as a
title II or title XVI representative payee, nongovernmental
organizational representative payees certify annually that they
are both bonded and licensed, provided that licensing is available
in the State. Would be effective on the first day of the
thirteenth month beginning after the date of enactment.
- Would require periodic onsite review of title II, VIII, and
XVI representative payees who are either individual payees serving
15 or more beneficiaries, nongovernmental fee-for-service payees,
or any other organizational or governmental representative payee
that serves 50 or more beneficiaries. Would be effective upon
enactment.
- Would require the Commissioner, within 120 days after the end
of each fiscal year, to submit to the House Ways and Means
Committee and the Senate Finance Comm ittee a report on the
results of the periodic reviews conducted during the subject
fiscal year.
Disqualification From Service As Representative Payee Upon
Conviction Of Offenses Resulting In Imprisonment For More Than 1
Year And Upon Fugitive Felon Status
- Would provide that a person who has been convicted of an
offense that resulted in imprisonment for more than 1 year could
not be appointed as representative payee for title II, VIII, or
XVI benefits, unless the Commissioner determines that such
appointment would be appropriate, notwithstanding such conviction.
- Would provide that a person who is a fugitive felon could not
be appointed as representative payee for title II, VIII, or XVI
benefits.
- Would require, within 270 days of enactment, the Commissioner
in consultation with the Inspector General to submit a report to
Congress evaluating whether existing reviews and procedures
relating to the qualification/disqualification of representative
payees provide sufficient safeguards.
- Would be effective on the first day of the thirteenth month
beginning after the date of enactment.
Fee Forfeiture In Case Of Benefit Misuse By Representative
Payees
- Would provide that an organization qualified to collect a fee
for serving as a title II or title XVI representative payee could
not collect a fee for any month that it is determined that the
organization misused all or part of the individual's benefit.
- Would be effective in any case with respect to which the
Commissioner makes the determination of misuse after December 31,
2002.
Liability Of Representative Payees For Misused
Benefits
- Would provide that the amount of benefits misused by a
nongovernmental representative payee would be treated as
overpayments to the representative payee, subject to current
overpayment recovery authorities. Any recovered amounts not
reissued to the beneficiary pursuant to section 101 of the bill
would be reissued to the beneficiary or his alternative
representative payee, up to the total amount misused.
- Would be effective in any case with respect to which the
Commissioner makes the determination of misuse after December 31,
2002.
Authority To Redirect Delivery Of Benefit Payments When A
Representative Payee Fails To Provide Required Accounting
- Would provide SSA with the authority to redirect payment of
title II, VIII, and XVI benefits to local Social Security field
offices if a representative payee fails to provide an annual
accounting of benefits report. SSA would be required to provide
proper notice prior to redirecting benefits. Under present law,
there is no authority to redirect benefit payments.
- Would be effective 180 days after the date of enactment.
Civil Monetary Penalty Authority With Respect To Wrongful
Conversions By Representative Payees
- Would give SSA the authority to impose civil monetary
penalties for offenses involving misuse of title II, VIII, or XVI
benefits received by a representative payee on behalf of an
individual. The amount of the penalty would be up to $5,000 for
each such violation. In addition, the representative payee would
be subject to an assessment of not more than twice the amount of
the misused benefits. Under present law, civil monetary penalties
do not apply to misuse of benefits by representative payees.
- Would be effective with respect to violations committed after
the date of enactment.
Civil Monetary Penalty Authority With Respect To Knowing
Withholding Of Material Facts
- Would give SSA the authority to impose civil monetary
penalties and administrative penalties of nonpayment of benefits
against individuals who conceal or withhold disclosure of facts
that are material to the initial or continuing entitlement to
title II, VIII, or XVI benefits. Under present law, such penalties
can be imposed only if the individual makes a false statement of a
material fact, or omits a material fact while providing a
statement.
- Would require the Commissioner, effective 180 days after
enactment, to issue a receipt to a beneficiary each time he or she
submits documentation or otherwise reports a change in earnings or
work status and to continue to issue such receipts until a
centralized computer file recording the date of the submission of
such information is implemented.
- Would be effective with respect to violations committed after
the later of (1) 180 days after the date of enactment, or (2) the
earlier of the date on which the Commissioner implements the
system for issuing receipts, or implements the centralized
computer file described above.
Denial Of Title II Benefits To Fugitive Felons And Persons
Fleeing Prosecution
- Would deny title II benefits to fugitive felons and
individuals who are fleeing to avoid prosecution, or custody or
confinement after conviction, under the laws of the place from
which the person flees, for a crime, or an attempt to commit a
crime, which is a felony under the laws of the place from which a
person flees, or in the case of New Jersey, is a high misdemeanor
under the laws of such state, or is violating a condition of
probation or parole imposed under Federal or State law.
- Would require the Commissioner to furnish (unless it would
violate other Federal or State law) law enforcement officers the
current address, SSN and photograph (if applicable) of any
beneficiary under this title upon written request of the officer.
The written request must provide sufficient identifying
information for the Commissioner to uniquely identify the
beneficiary, and must establish that the beneficiary is a fugitive
felon or probation or parole violator, has information needed by
the officer to perform his/her official duties, and that
locating/apprehending the beneficiary is within the scope of the
officer's official duties.
- Would be effective upon enactment.
Requirements Relating To Offers To Provide For A Fee A
Product Or Service Available Without Charge From The Social Security
Administration.
- Would amend section 1140 of the Social Security Act by adding
a mandatory requirement that persons or companies include in their
solicitations a statement that services that they provide for a
fee are available directly from SSA free of charge. The statement
would be required to comply with standards promulgated by the
Commissioner of Social Security with respect to their content,
placement, visibility, and legibility.
- Would be effective 180 days after the date of enactment.
Refusal To Recognize Certain Individuals As Claimant
Representatives
- Would authorize the Commissioner to refuse to recognize a
representative and disqualify a representative already recognized,
who has been disbarred, suspended, or disqualified from
participating in or appearing before any Federal program or agency
from which he or she was previously admitted to practice in any
jurisdiction.
- Would be effective upon enactment.
Penalty For Corrupt Or Forcible Interference With
Administration Of The Social Security Act
- Would require a fine of not more than $5000, imprisonment of
not more than three years, or both, for anyone who corruptly or by
force, impedes or attempts to impede or obstruct the
administration of the Social Security Act. If the offense is
committed only by threats of force, the penalty would be a fine of
not more than $3000, imprisonment for not more than one year, or
both.
- Would be effective upon enactment.
Use Of Symbols, Emblems, Or Names In Reference To Social
Security Or Medicare
- Would update section 1140 of the Social Security Act to
include the Health Care Financing Administration's (HCFA) new name
- Center for Medicare and Medicaid Services (CMS) in the names
prohibited from use in specified circumstances. It would also add
Death Benefits Update, Federal Benefits Information, Funeral
Expenses, and Final Supplemental Plan to the terms that are
prohibited from use because they may give a false impression that
an item is approved or endorsed by SSA, CMS, or HHS.
- Would be effective 180 days after the date of enactment.
Cap On Attorney Assessments
- Would cap the amount of the attorney fee assessment at the
lower of 6.3% percent of the attorney fee certified or paid from
the claimant's past-due benefits, or $100.
- Would apply with respect to attorney fees which are first
required to be certified or paid in or after the month beginning
180 days after enactment.
Extension Of Attorney Fee Payment System To Title XVI
Claims
- Would extend fee withholding and direct payment of attorney
fees to the SSI program. Fees would be authorized as under current
law, but payment of fees would be limited in any case to amount
remaining after interim assistance reimbursement if less than the
authorized fee.
- Would apply with respect to attorney fees which are first
required to be certified or paid in or after the month beginning
270 days after enactment.
- Would require the Commissioner to prepare a report evaluating
the feasibility of extending to non-attorney representatives the
direct fee withholding and payment provisions that apply to
attorney representatives no later than 270 days after enactment.
Application Of Demonstration Authority Sunset Date To New
Projects
- Would extend the general title II disability program
demonstration project waiver authority to include projects
initiated before the expiration of the 5-year period (ending
December 17, 2004).
- Would be effective upon enactment.
Expansion Of Waiver Authority Available In Connection With
Demonstration Projects Providing For Reductions In Disability
Insurance Benefits Based On Earnings
- Would authorize the Commissioner to waive requirements of
section 1148 of the Social Security Act, which pertains to the
Ticket to Work and Self-Sufficiency program and the provision of
rehabilitation and return-to-work services.
- Would be effective upon enactment.
Funding Of Demonstration Projects Providing For Reductions
In Disability Insurance Benefits Based On Earnings
- Would change financial authorization language in the Ticket to
Work and Self-Sufficiency Act to specify that benefits associated
with the $1-for-$2 demonstration will be paid directly from the
OASI, DI, HI, and SMI trust funds.
- Would be effective upon enactment.
Availability Of Federal And State Work Incentive Services
To Additional Individuals
- Would allow Benefit Planning, Assistance and Outreach (BPAO)
services and Protection and Advocacy (P&A) System services to
be provided to those beneficiaries in section 1619(b) status,
those beneficiaries receiving only a State Supplement payment, and
those beneficiaries in an extended period of Medicare eligibility
under title XVIII after a period of disability under title II has
ended, and would allow P&A System services to include those
needed to maintain employment (in addition to those needed to
secure or regain it).
- Would be effective with respect to: (1) grants, cooperative
agreements or contracts entered into on or after the date of
enactment; and, (2) payments provided after the date of enactment.
Technical Amendment Clarifying Treatment For Certain
Purposes Of Individual Work Plans Under The Ticket To Work And
Self-Sufficiency Program
- Would treat an individual receiving vocational rehabilitation
pursuant to an individual work plan established under the Ticket
to Work program the same as an individual with an individualized
work plan under a State plan for vocational rehabilitation
services approved under the Rehabilitation Act of 1973, thereby
making employers who hire such individuals eligible for the worker
opportunity tax credit.
- Would be effective as if enacted in section 505 of P.L 106-170
(i.e., applies to individuals who began work for the employer
after June 30, 1999.)
Elimination Of Transcript Requirement In Remand Cases Fully
Favorable To The Claimant
- Would provide that SSA would not have to prepare and file a
transcript with the district court after a court-ordered remand
for further administrative proceedings results in a
fully-favorable award of benefits.
- Would be effective with respect to determinations made upon
remand made on or after the date of enactment.
Nonpayment Of Benefits Upon Removal From The United
States
- Would end the exemption from nonpayment of benefits for aliens
removed from the United States for smuggling other aliens into the
United States.
- Would be effective for aliens removed from the United States
after the date of enactment.
Reinstatement Of Certain Reporting Requirements
- Would reinstate the following report requirements, which were
eliminated as a result of provisions in P.L. 104-66, the "Federal
Reports Elimination and Sunset Act of 1995."
- Trustees reports on OASDI, HI, and SMI trust funds;
- Continuing disability reviews report; and
- Disability preefectuation review report.
Clarification Of Definitions Regarding Certain Survivor
Benefits
- Would provide a limited exception to the 9-month
duration-of-marriage requirement for widow(er)'s benefits. This
exception would apply in cases in which the marriage was postponed
by legal impediments to the marriage caused by State restrictions
on divorce from a prior spouse institutionalized due to mental
incompetence or similar incapacity.
- Would be effective based on applications for benefits filed
after the date of enactment.
Clarification Respecting The FICA And SECA Tax Exemptions
For An Individual Whose Earnings Are Subject To The Laws Of A
Totalization Agreement Partner
- Would provide clear legal authority to exempt a worker's
earnings from U.S. Social Security tax in cases where their
earnings were subject to a foreign country's laws in accordance
with a U.S. totalization agreement, but the foreign country's law
does not require compulsory contributions with respect to those
earnings.
- Would be effective upon enactment.
Coverage Under Divided Retirement System for Public
Employees of Kentucky
- Would add 'Kentucky' to the list of 21 States in the Social
Security Act permitted to use the divided retirement system
procedures. Under these procedures, the State has the option of
extending Social Security and Medicare coverage (or Medicare
coverage only) to only those current employees who wish to be
covered, with all future employees being covered automatically.
- Would be effective upon enactment.
Technical Correction Relating To Responsible Agency
Head
- Would delete all references to the "Secretary of Health and
Human Services" in section 1143 of the Social Security Act (with
regard to issuance of Social Security statements) and replace them
with the "Commissioner of Social Security."
- Would be effective upon enactment.
Technical Correction Relating To Retirement Benefits Of
Ministers
- Would conform the Social Security Act to the change made to
the tax provisions in the Internal Revenue Code in 1996 by
excluding from coverage for Social Security benefit purposes
certain benefits (including a parsonage allowance) received by a
retired minister or member of a religious order.
- Would be effective for years beginning before, on or after
December 31, 1994.
Technical Correction Relating To Domestic
Employment
- Would remove the references to domestic employment that appear
in the provisions in the law that define agricultural employment.
Further, the provisions that define domestic employment would
specify that domestic employment includes domestic service
performed on a farm.
- Would be effective upon enactment.
Technical Corrections Of Outdated References
- Would change the Act to correct terminology and citations
respecting removal from the United States.
- Would change the Act to correct the citation with respect to
the tax deduction relating to health insurance costs of
self-employed individuals.
- Would change the Code to eliminate the reference to the
obsolete 20-day agricultural work test.
- Would be effective upon enactment.
Technical Correction Respecting Self-Employment Income In
Community Property States
- Would conform identical provisions in the Social Security Act
and the Internal Revenue Code to current practice in both
community property and non-community property States (i.e., to
provide that income from a trade or business that is not a
partnership will be taxed and credited to the spouse who earned
the income in carrying on the trade or business or to each spouse
based on their distributive share of the gross earnings, if
jointly operated).
- Would be effective upon enactment.
OFFICE OF THE DEPUTY COMMISSIONER FOR LEGISLATION AND CONGRESSIONAL
AFFAIRS
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