Testimony by Commisssioner Barnhart
Before House Ways and Means Subcommittee on Human Resources
On the Supplemental Security Income (SSI) Program
April 29, 2004
Mr. Chairman and Members of the Subcommittee:
Thank you for inviting me to appear today before the Subcommittee
to discuss the Supplemental Security Income (SSI) program.� Although this
is the first time I have had the privilege of coming before this Subcommittee
as Commissioner of Social Security, I would like to thank the Subcommittee
for its work over the years to improve the integrity and public confidence
in the SSI program, while protecting the millions of low-income aged, blind,
and disabled individuals the program was designed to assist.�
In March 2004, 6.9 million individuals received federally
administered monthly SSI benefits. This group is composed of 1.2 million
individuals who receive benefits based on their being aged 65 or older,� 5.7
million disabled recipients, and 95,000 blind recipients. �The monthly benefit paid to these eligible individuals averages
$425.� In calendar year 2003, more than $36 billion in benefits were
paid under SSI-$32.4 billion in Federal expenditures and nearly $4 billion
in federally administered State supplementary payments.
SSI is a complex program, which poses tremendous challenges
and opportunities for SSA.
Today, I would like to touch on several areas:
- the administrative challenges facing the agency,
the progress we have made in meeting those challenges and current initiatives;
- progress in simplifying the SSI program;
- my approach to improving the process for determining
disability; and,
- opportunities for those disabled SSI recipients
who want to begin or return to work.
Before I describe our challenges and accomplishments, I would
like to briefly give you some idea of the people the SSI program serves.
Beneficiaries
SSI beneficiaries are among the most vulnerable
members of our society.� All of them are either blind or disabled, or
aged 65 and older.� All have very limited incomes and little or no assets.� The
maximum income an individual can have and still be eligible for SSI represents
less than 75 percent of the poverty level for a one-person household,
and the maximum income a couple can have and remain eligible for SSI
represents less than 85 percent of the poverty level for a two-person
household.� Only 35 percent of SSI beneficiaries receive other cash benefits
such as Social Security benefits.� It is clear that without SSI, the
vast majority of beneficiaries would be destitute.
The current maximum Federal SSI benefit rate is $564 per month for an individual
and $846 for a couple, when both members are aged, blind, or disabled.� Of
the 1.2 million individuals who receive SSI benefits based on age, more
than half are over age 75 and about 70 percent are women.� About half
of all SSI elderly beneficaries live alone.� The average age of the nearly
4 million adults receiving SSI benefits based on disability is about
45 years old and 60 percent are
women.� In addition, there are 760,000 SSI beneficiaries who came onto
the SSI rolls as blind or disabled individuals who are now aged 65 or
older.�
By any measure, SSI recipients are among the poorest of the
poor.� For them, SSI is truly the program of last resort and is the safety
net that protects them from complete impoverishment. In administering this
program we must recognize both the vulnerability of those served by it
as well as our obligation to the American taxpayer to ensure that payments
made under the program are consistent with the program's requirements.
Administrative Challenges
As its name indicates, the SSI program is designed to supplement
an individual's income up to a minimum floor of income.� The definition
of income in the SSI program includes cash and in-kind income, and is anything
that a person receives that can be used to obtain food, clothing, or shelter.� It
includes cash income such as wages, Social Security and other pensions,
and unemployment compensation. In-kind income includes food, clothing,
and shelter.� Generally, the amount of the cash income or the value of
the in-kind income is deducted from the maximum Federal
benefit rate.� In computing the SSI benefit, the first $65 of earnings
is disregarded and then $1 is deducted from the benefit rate for each $2
of earnings. Unearned income--for example, Social Security--causes the
benefit rate to be reduced $1 for $1 after the first $20 is disregarded.
Individuals' SSI benefit amounts also may change if they move into a different
living arrangement--whether a person lives alone or with others, or resides
in a medical facility or other institution affects benefit levels.� For
instance, when individuals move into nursing homes, their benefits generally
are reduced to not more than $30 per month. If they move from their
own household into the household of another person, and that person provides
food, clothing, or shelter, their benefits also may be reduced. If
their income or resources in a month exceed the limits specified in the
law, they may be ineligible. The design of the SSI program requires
SSA to take into account the many changes in an individual's financial
and personal life and make adjustments in benefit payments to reflect those
changes.
SSI eligibility is based on a monthly means test for income and resources.
It is a practical impossibility for SSA to obtain information from all
recipients about every change in their income, resources, or living arrangements
every month.� Some overpayments and underpayments are inevitable.� Additionally,
even if individuals report timely, requirements to notify individuals of
how a specific change affects their benefit amounts can create a lag in
adjusting the benefit, also causing overpayments and underpayments.
The very design of SSI as a program that provides for current needs, leads
to some amount of overpayment.� Certain amounts of overpayments are unpreventable
because of due process notification requirements or because an individual's
income increases during a month after the SSI benefit has already been
paid for the month.� Overpayments can occur when recipients report benefit-changing
events too late or do not report them at all.� In addition, some amounts
of overpayments occur because SSA is unable to act promptly on reports
of changes because of insufficient resources and competing workloads.� Regardless
of the various causes of improper payments, SSA is committed to preventing
such payments where possible, and where not, acting quickly and efficiently
to correct such payments.
In 1997, the GAO designated SSI as a high-risk program. At the time, GAO said
that SSA lacked an effective plan to address the level of debt created
by overpayments. Further, GAO said that SSA had difficulty determining
initial medical and non-medical eligibility for the program, as well as
continuing eligibility of program participants. GAO also noted what it perceived as SSA's emphasis on adjudicating
initial disability and aged claims and providing beneficiary services over
program integrity.�
Corrective Action
When I became Commissioner I made it a priority to address GAO's concerns about
the administration of the SSI program.� In fact, Deputy Commissioner James
B. Lockhart and I met personally with Comptroller General David Walker
to discuss GAO's concerns.� In developing a corrective action plan, we
focused on four areas: commitment to timely processing of continuing disability
reviews (CDRs), improved prevention of overpayments, increased overpayment
detection, and increased collection of debt.� SSA developed a Corrective
Action Plan directed at the issues raised by GAO in its designation of
SSI as a high-risk program.�
The Corrective Action Plan identified the root causes of problems in the SSI
program, provided solutions and provided for substantial additional near-term
measures, primarily improved program administration and higher payment
accuracy.� Our efforts to develop and implement the Corrective Action Plan paid off. In January 2003, the General
Accounting Office (GAO) took the SSI program off its high risk list.
Still, much remains to be done.� With the enactment
of the Improper Payments Information Act (IPIA) of 2002, SSA has increased
its focus on reducing payment errors by refining and improving upon the
Corrective Action Plan so that it can� be an increasingly effective program,
integrity planning, and tracking tool.� The Plan is reviewed and updated monthly and I hold specific senior agency
officials accountable for its results. Major ongoing initiatives under
the Plan involve electronic death registrations, electronic bank account
verification, and improving debt collection strategies.� In addition,
to simplify wage reporting for beneficiaries, SSA has conducted a pilot
project designed to test beneficiary reporting of income using touch-tone
and voice-prompt telephone technology.� The Plan has been the impetus
for helping SSA meet the improper payment reduction targets that are
being established pursuant to the IPIA.� Through the Plan, SSA is implementing
administrative sanctions, online data matching in the redetermination
process, and improved collections of overpayments through netting, credit
bureau referrals, administrative offsets, and mandatory cross-program
recovery.�
When conducting a redetermination, SSA reassesses SSI recipients'
incomes, resources, living arrangements, and all non-disability factors
of SSI eligibility.� While we will continue to refine our redetermination
selection process to make it more effective and efficient, the number of
redeterminations that we can do in a year are directly related to the resources
that are allocated to us by Congress.�
Redeterminations and CDRs are the most effective means of
preventing erroneous payments.� Redeterminations return about $7 for every
$1 it costs to administer.� CDRs, during which we determine whether an
individual continues to be under a disability, have a savings-to-cost ratio
of roughly $10 to $1. We expect that the present value of SSI program savings
resulting from the CDRs conducted in FY 2003 will be close to $2 billion. � And that redeterminations conducted in FY 2003 will produce
an estimated $2.7 billion of overpayment prevention and recoveries.� While
we are considering a number of ways to improve the redetermination process
by better targeting the types of cases we select, budget restraints could
adversely affect these ongoing important program integrity efforts.� Doing
fewer CDRs and redeterminations would mean that fewer erroneous payments
would be prevented and detected.��
However, as you know for FY 2004, SSA's appropriation for
administrative expenses was significantly lower than the President's budget
request.� I found that I had to balance the need for CDRs and redeterminations
against the need to process claims filed by aged and disabled citizens-arguably
the most vulnerable of our population.� And we are not going to be able
to do as many CDRs and redeterminations as I had originally planned.
Prisoners and Felons
A very important area of program integrity in which we continue to improve
involves non-payment of SSI benefits to prisoners, fugitive felons, and
parole and probation violators. These non-payment provisions are in the
SSI law because of Chairman Herger's and this Subcommittee's diligence.
As you know, the fugitive felon prohibition was recently extended to the
Social Security program as well in the Social
Security Protection Act of 2004.
Since its inception, the SSI program has prohibited the payment of benefits
to individuals who reside in public institutions--including prisons, jails,
detention centers, and other types of correctional institutions.� Social
Security recipients in correctional institutions also generally are not
eligible for benefits. Even though we conducted matches with correctional
institutions, we were not always able to identify all of the individuals
who should have their benefits suspended. Under this Committee's guidance
and leadership, legislation was enacted that provided for incentive payments
to state and local correctional institutions that furnish information resulting
in the suspension of SSI payments. Under the provision, SSA pays
up to $400 to state and local correctional institutions for each report
that results in the suspension of an individual's benefits.
SSA currently has agreements with jails and prisons under which the Agency
is provided lists of inmates to match against our recipient records.� These
agreements are with institutions that house 99% of all prisoners in the
country.� Since the incentive payment program began in 1997, SSA has paid
5,196 penal institutions over $113 million in incentive payments. Suspension
of benefits to prisoners saves approximately $500 million annually. In
fiscal year 2001, there were over 89,000 prisoner suspensions.
Another very important SSI program integrity provision prohibits fugitive felons
from receiving benefits. A key to its implementation is having access
to records of outstanding felony warrants.� We have entered into matching
agreements with a number of Federal, state and local law enforcement agencies
to facilitate electronic matching of warrant information.
For example, SSA and OIG have matching agreements for obtaining fugitive warrants
in place with the FBI; the FBI's National Crime Information Center, the U.S. Marshal's Service, State agencies, and metropolitan police departments.
Currently, SSA has access to all Federal warrant information, all felony
warrant information from 40 States, the District of Columbia,
and three major metropolitan jurisdictions.��
When we obtain warrant information from any of these sources, we first verify
the social security numbers by matching them against our Enumeration and
Verification System.� We then match against our SSI beneficiary files to
determine if any of the fugitives are receiving SSI benefits.� Results
of the second match are forwarded to OIG for action.
OIG works with both the FBI Information Technology Center the (ITC) and with the U.S. Marshals Service to verify that the felony probation or parole violation warrant
is active. The ITC and U.S. Marshals Service provide the address information in SSA's records about each
SSI recipient to the appropriate law enforcement personnel so that they
can apprehend the individual.�� Over the years, these leads to law enforcement
have resulted in the apprehension of 19,000 fugitives.
Since the inception of the fugitive felon program in August 1996, SSA has suspended
nearly 78,000 SSI payments under this provision, and the number is growing
every year.� In FY 2003 alone, we processed nearly 24,000 suspensions.� For
FY 2001 (the most recent year for which an estimate is available), we estimate
that the 5-year Federal SSI program savings from suspensions processed
in that year amount to over $25 million.� Additionally, the suspension
of SSI payments to fugitive felons and parole violators also saves both
Federal and State Medicaid expenditures.
The provision in the Social
Security Protection Act of 2004 extending the fugitive felon prohibition to OASDI payments
is estimated to reduce OASDI program expenditures by $800 million over
10 years.� We are currently working toward implementing this provision
by its January 2005 effective date.
The core of program integrity involves making sure that individuals
meet all SSI eligibility factors before benefits are paid and assuring
that only correct amount of benefits are paid on an initial and ongoing
basis.� In those cases in which individuals are overpaid SSI benefits,
we pursue recovery.� SSA has a number of tools to collect overpayments
from deducting amounts from benefits to referring the debts outside of
the agency for collection.� I would like to� give you an idea of some of
our more recent successes that have been accomplished in the debt collection
area.
Debt Collection Efforts
As part of the Corrective Action Plan, we implemented a new
system in FY 2003 to measure and report the status of various types of
debt. This allows us to identify debt that had been previously determined
to be uncollectible but may now be recoverable because the overpaid individual
is again eligible for SSI or has become eligible for OASDI benefits from
which the debt may be collected.� Previous to the Corrective Action Plan,
we were unable to track debt in such situations because often the old debt
was not carried over onto the newer benefit record.� The plan has also
been the catalyst for several other changes.� These include collecting
overpayments using new "netting" software that automatically
recovers overpayments when an underpayment is discovered, mandatory cross-program
recovery, and new administrative offset and credit bureau referrals.
These debt collection improvements contributed to increased
recovery of SSI overpayments at reduced cost.� Specifically, SSI overpayment
collections in FY 2002 totaled $859.6 million and in FY 2003, they totaled
$941.6 million (up nine percent), with almost $100 million of that total
being attributed to the automated netting technique.� SSA also worked with
Congress to develop new authority for expanded cross-program recovery of
SSI overpayments from OASDI benefits, which included lifting the restriction
on the amount of offset that can be applied to retroactive checks.� An
estimated savings of over $200 million over 10 years is expected from the
enactment of this provision in the Social Security Protection Act of 2004.
SSA refers delinquent debtors to credit bureaus and delinquent
debts to the Department of the Treasury for offset of Federal payments
being made to the individual.� The credit bureau reporting program led
to the voluntary repayment of $20.9 million during FY 2003.� In FY 2003,
SSA referred 158,484 debtors to credit bureaus; the total debt owed by
these individuals was $525 million.� The Treasury Offset Program has also
been very successful.� For example, SSA collected over $35 million in FY
2003 through this program.
Overpayment prevention, overpayment detection, and overpayment
collection are vital parts of our overall program integrity efforts.� Many
overpayments are the result of SSI beneficiaries not reporting changes
or SSA not acting on reported changes in time to correct the benefit payment.� Some
overpayments are caused by due process requirements that are a matter of
law.� And, a number of overpayments are caused by complex program policies
that can be difficult to administer. In all cases, regardless of
the cause of the improper payment, SSA is committed to tracking and reporting these payments, setting aggressive
reduction targets, and taking the necessary steps to ensure that reduction
targets are achieved.
Program Simplification
I previously mentioned the recent enactment
of the Social Security Protection Act of 2004.� I thank this Subcommittee for including SSI
provisions in the bill.� While the bill includes many important Social
Security program integrity and improvement provisions, I want to point
out those SSI provisions that simplify the program.
One provision excludes small amounts of income
paid as interest or dividends on an SSI beneficiary's countable resources.� Currently,
an SSI individual cannot have countable resources of more than $2,000
if he or she is single or $3,000 if married.� Thus, an interest bearing
bank account with a balance close to the resource limit would yield only
a small amount of interest income perhaps no more than $1 to $2 a month.� Prior
to enactment of the provision in the Social Security Protection Act of 2004, SSA field office employees would have to obtain
documentation from the individual or the bank about the amount of the
interest paid, record it in the SSI file, and make adjustments to the
benefit payment, which resulted in a small overpayment.� We would then
take appropriate action to recover or waive recovery of the small SSI
overpayment caused by a small interest payment.� All of these actions
of identifying, recording, and recomputing are no longer necessary making
the program simpler to administer and avoiding overpayments.
Another provision increases from $20 to $60
a quarter the amount of infrequent unearned income an individual can
receive in a quarter without it affecting his or her SSI benefit.� Again,
by eliminating the reporting and recording of these very small amounts
of income-cash birthday gifts or small payments for babysitting, for
example-administration of the SSI program is simpler, overpayments are
avoided and the program is more equitable
and easier to understand.
Yet another provision eliminates the unreasonable
situation in which income received in the first month of eligibility
is counted three times even if it were only received once.� The reason
for triple counting the first month's income is because in all initial
eligibility cases the law required that there be a transition from current
month accounting to retrospective accounting without considering income
received prior to the first month of eligibility.� Although the law recognized
exceptions for certain types of income such as Temporary Assistance for
Needy Families (TANF), refugee relocation assistance, and Bureau of Indian
Affairs payments, it did not include a general exception for other income
that ended.� For example, a relative provides cash assistance only until
the individual begins receiving SSI benefits. This triple-counting of
one-month's income caused beneficiary confusion and was difficult for
SSA employees to administer and explain.
Two provisions in the Social
Security Protection Act of 2004 helped military families.� The first extended the current-law
exception for SSI eligibility outside the United States to
children of military personnel who were born or became disabled overseas
while accompanying their parents on duty assignments. This makes the
treatment of disabled children of military personnel consistent whether
or not they first received SSI while they were in the United
States.� The second provision simplifies the program by providing SSA with the authority
to count compensation reported on a monthly leave and earnings statement
issued by the military reflecting compensation earned in the prior month as compensation received in the prior month.� The provision is a significant administrative simplification
in that it eliminates the need to review multiple payment statements
from different periods to determine countable compensation for a month.
These provisions are an important first step
in simplifying the SSI program. I assure you that we will continue,
with the help of Congress, to improve and simplify SSI.
President's Budget SSI Proposals
While the enactment of the SSI provisions in the Social
Security Protection Act of 2004 was very helpful, there may still be many areas in the SSI
program that might lend themselves to simplification.�
For example, a proposal in the President's FY 2005 budget would provide more
help for military families with disabled children while at the same time
simplify the administration of the SSI program.� Under current law, only
basic pay is counted as wages for SSI purposes.� But, there are 30 types
of military compensation that are not basic pay, and therefore are treated
as unearned income. (The distinction between earned and unearned income
is important in determining the amounts to be deemed from a parent or spouse
in military service.� Higher disregard amounts apply to earned income yielding
less countable income and, often, higher SSI benefits.)� Determining the
difference in the types of military pay is time consuming and error prone,
and the guidelines for making such determinations covers 14 pages in SSA's
operating instructions.
The proposal would treat most cash military compensation as wages and, thus,
as earned income.� The provision would treat cash military compensation
and civilian wages alike, and thus eliminate the present unfair and disadvantageous
treatment of cash military compensation other than basic pay under SSI.� The
proposal would increase SSI benefits for most military families with disabled
children, which are currently about 3,000 families. It would be a significant
program simplification in these cases and would have a relatively small
program cost of only $2 million over 10 years.�
Enactment of this proposal would complement SSI policy changes relating to
military families that I made a year ago.� One of these changes ensures
that any additional pay received by military personnel deployed to a combat
zone cannot be used to reduce SSI benefits paid to their children or spouse.� The
other changes the SSI treatment of privatized military housing enabling
some military families living in such housing who lost SSI payments and
Medicaid coverage to regain those benefits.
The President's budget includes another proposal that would help families with
disabled children.� Currently, in cases in which relatively large retroactive
SSI payments are due disabled children, SSI law requires that those payments
be placed in "dedicated" bank accounts and the monies used only for specified
purposes related to the children's impairments.� The dedicated account
provision is viewed negatively by parents and advocates of disabled children
due to the conflict between the rigid nature of the uses permitted for
the money from the accounts and the unpredictable nature of the needs of
disabled children. The proposal would eliminate the requirement to establish
a dedicated account if the representative payee is the parent of the disabled
child.� It recognizes that parents act in the best interests of their children
and know best how to address the needs of their children. At the same time,
the proposal protects the retroactive benefits of children who have representative
payees other than their parents.�
Modifying the dedicated account requirement would improve service to SSI beneficiaries
and their families and make the program simpler to administer. There are
currently about 40,300 dedicated account cases.� About three-fourths of
these are cases in which the parent is the child's representative payee.� The
President's proposal would eliminate an estimated 30,000 dedicated account
cases.� Reducing the number of dedicated accounts that would be required
to be established and monitored would not only ease some of the day-to-day
burden on parents of disabled children, it would also ease some administrative
burden on SSA.� We would be able to redirect the estimated $5 million per
year in administrative resources to other error reduction and debt collection
activities.
We note that this Subcommittee has included the President's proposal for pre-effectuation
review of State agency SSI blindness and disability determinations in H.R.
4, the TANF reauthorization bill.� Reviewing the cases before benefits
are awarded would be a significant program integrity effort and would save
an estimated $1.7 billion SSI and Medicaid program dollars over the first 10 years.�
One other proposal in the President's FY 2005 budget that I would like to mention
would temporarily extend the current 7-year period for SSI eligibility
for refugees and asylees to 8 years effective October 2004. This proposal recognizes that some refugees and asylees
have been unable to become U.S. citizens within the 7 year time period, and would give
them an additional year to naturalize. The extension would expire
after September 2007. The proposal would benefit about 4,000 SSI
beneficiaries each of the three years it is in effect.
AeDIB
Up to now, I have discussed program integrity and simplification issues that
deal with program policies and, as such, are relatively limited in scope.� I
would like to turn now to a much larger process simplification that affects
many of the nearly 1.5 million Americans who file for SSI disability benefits
each year and all of the SSA and the State Disability Determination Service (DDS) employees
who work on those disability applications.
I know that everyone is concerned about the length of time the disability determination
process takes and, quite frankly, I think that in too many cases the length
of time is unacceptable. I have a strategy for reducing these delays.�
The linchpin for my strategy is the development and
implementation of an electronic disability claims system, the Accelerated
Electronic Disability System (AEDIB).� AEDIB is a major Agency initiative
that is moving all components involved in disability claims adjudication
and review to an electronic business process through the use of an electronic
disability folder.� These components include the field office, regional
office, the program service center, State DDSs , the hearings and appeals
office, and the quality assurance staff.� When the process is fully implemented,
each component will be able to work claims by electronically accessing
and retrieving information that is collected, produced and stored as
part of the electronic disability folder. This will reduce delays that
result from mailing, locating, and organizing paper folders.
SSA field offices are currently collecting disability
information for initial adult and child cases using the Electronic Disability
Collect System (EDCS). Also, claimants can now use the Internet to submit
disability information.� I am especially proud to announce that we began
national roll-out of AeDIB in January 2004 starting in Jackson, Mississippi, and we have estimated it will be complete by June
2005.� In fact, the roll-out is going well and we're right on schedule.
Approach for Improving Disability Determination Process
Early in my tenure as Commissioner, I began
a comprehensive service delivery assessment to thoroughly examine all
of SSA's workloads. We began that assessment with the disability claims
process and mapped out each step from the initial claim through a final
administrative appeal. Our analysis of the process showed that the length
of time required to move through the entire appeals process was 1153
days -- 525 days due to backlogged cases and 628 days to move through
the process.
Based on that analysis, I developed a Service
Delivery Plan which now forms the basis of our annual budget submission.
To tackle the management and process issues, we developed
both a short-term and long-term strategy.
The short-term strategy is focused on identifying
areas where immediate action was possible, while the long-term strategy
would focus on improving the overall disability determination process.
Over the past two years, we have implemented a number of short-term initiatives.
These include:
- The
participation of Administrative Law Judges (ALJs) in early screening
for on-the-record decisions;
- developing
a short form for fully favorable decisions;
- creating
a law clerk (attorney intern) position;
- deploying
speech recognition technology to hearing offices;
- ending
the practice of rotating hearing office technicians among different positions;
- using
scanning technology to track and retrieve folders;
- eliminating
the tape transcription backlog, and
- eliminating
delays in presenting cases to the U.S. District Courts.
We are in the process of implementing two other initiatives:
- allowing
ALJs to issue decisions from the bench immediately after a hearing; and
- expanding
video teleconference hearings.
And we are preparing to implement an initiative to
digitally record hearings.
I am pleased to report that we have made significant
progress.� In FY 2003, we exceeded our Agency-wide productivity goal.� SSA
offices processed over 2.5 million disability claims-an increase of more
than 350,000 from FY 2001.� Administrative Law Judge productivity rates
were the highest in history-at 2.35 cases per day.� SSA's Office of Hearings
and Appeals processed 40,000 more hearing decisions than FY 2002 and
almost 80,000 more decisions than in FY 2001.� In November 2001,
the average time to appeal an unfavorable hearing decision was 467 days.� In
November 2003, it took 252 days.
But these short-term efforts, important as they are,
do not address the fundamental problems.� If we are to see long-term
results, we must look at the entire process as a whole, and make systemic
changes.
When I introduced my approach for improving the process,
it was the first step of what I believe must be -- and have worked to
make -- a collaborative process. I am working� within the Administration,
with Congress, the State DDSs and interested organizations and advocacy
groups.� To be successful, perspectives from all parts of the system
must be considered.
I believe that if we work together, we will create
a disability system that responds to the challenge inherent in the President's
questions about why it takes so long to make a disability decision and
why can't people who are obviously disabled get a decision quickly. We
will look beyond the status quo to the possibility of what can be. We
will achieve our ultimate goal of providing accurate, timely service
for the American people.
Work Incentives and Opportunities
When the President asked me about the disability determination process he asked why, other than pride, anyone would want to risk
going back to work after going through such a long process to receive
benefits.� With the SSI program, the question could be expanded to include
not only those individuals who return to work, but also those disabled
individuals who go to work for the first time.� Regardless of their reasons
for working, a surprising number of individuals who have been determined
to have disabling medical conditions do try to work.� Nearly 330,000
individuals who receive SSI disability benefits were working in September
2003.� This represents nearly 6 percent of all SSI disability recipients.
The SSI program encourages individuals with disabilities to work through a
number of program incentives and opportunities.� I will briefly describe
these provisions, many of which have been an important part of the program
for at least 20 years, and then turn to the newest work opportunity provision
in the SSI program.
Generally, after the first $20 is excluded, income reduces the SSI benefit
$1 for $1, unless the income is from work in which case it is treated more
generously.� The first $65 of earned income is excluded and then the SSI
benefit is reduced only $1 for every $2 earned.� These higher exclusions
for work recognize the additional costs associated with work, and also
assure that SSI beneficiaries who work have higher incomes than those who
do not work.� In addition, other amounts of earnings may be excluded under
specific circumstances.� For example, as incentive for working and remaining
in school, up to $5,520 a year of a student's income is excluded.� Similar
to the DI program, an individual's work expenses attributable to his or
her impairment are also excluded in SSI.� Blind individuals have additional
impairment-related work expense exclusions.�
A very important work incentive is the plan for achieving self-support or PASS.� Under
an SSA-approved PASS, an individual is permitted to set aside income and resources for a work goal.� The
amounts of the set-aside income and resources are not considered in determining
an SSI beneficiary's continued eligibility or benefit amount.� The income
or resources set aside are used to pay for goods and services needed to
reach the goal, such as education, vocational training, starting a business
or purchasing work-related equipment.�� A PASS may be approved for the
length of time that is determined reasonably needed for the individual
to attain his or her goal.� Currently, about 1,785 SSI beneficiaries have
established a PASS.
A common fear that individuals have expressed about going to work is the potential
effects that work may have on their medical coverage under Medicaid.� The
SSI program addresses this concern by providing continued Medicaid coverage
after an individual's earnings cause his or her income to exceed the level
at which cash benefits could continue to be paid.� Under this section 1619(b)
provision, a working individual's Medicaid coverage continues even after
SSI stops as long as the individual has earnings, remains disabled, and the earnings are below the �individual
and state threshold amounts.� Currently, about
73,500 beneficiaries continue to qualify for Medicaid through this provision.� For individuals whose earnings exceed
the threshold and live in one of the participating states, individuals
can continue to receive Medicaid through the Medicaid Buy-In programs authorized
by the Ticket to Work legislation.
The most recent provision in SSI law that provides an opportunity for beneficiaries
to work is the Ticket to Work Program, which was enacted in December 1999.
First, let me briefly describe how the program
works. Under current agency regulations, an SSDI or SSI beneficiary
with a disability receives a Ticket to Work if he or she is between the
ages of 18 and 64 and has a medical condition that is not expected to
improve in the near future. Approximately 2.5 million, or 63 percent,
of all SSI beneficiaries with disabilities who do not also receive Social
Security benefits meet this standard.
Under the Act, SSA enters into agreements with
Employment Networks (ENs) and with State Vocational Rehabilitation Agencies
("State VR Agencies"). ENs are qualified State, local, or private
organizations that offer employment support services. These organizations
include One-Stop Career Centers established under the Workforce Investment
Act of 1998; single providers of services; or groups of providers organized
to combine their resources into a single entity.
A beneficiary who receives a Ticket to Work
can choose to assign it to any EN that provides services within the community
or to the State VR Agency. Together, these organizations are referred
to as "Ticket Providers." An EN may decide whether or not to accept the
assignment of a Ticket.� ENs may only be paid based on their success in assisting
beneficiaries to secure and maintain employment and move beneficiaries
off the disability benefit rolls.
Once a Ticket is assigned by a beneficiary to
a Ticket Provider, the beneficiary and the Provider jointly develop and
implement a plan of employment, vocational, or other support services
designed to lead to and maintain employment. Providers may provide
these services directly or by entering into agreements with other organizations
or individuals to provide the appropriate services at no cost to the
beneficiary.
SSA is implementing the Ticket to Work program
in three phases. During the first phase of the program, from February
through October 2002, about 723,373 SSI beneficiaries in 13 states received
Tickets to Work. During the second phase, which ran from November 2002
through September 2003, we mailed Tickets to approximately 718,886 SSI
beneficiaries in 20 additional States and the District of Columbia. Then beginning in November 2003, we started
releasing Tickets to the more than one million SSI beneficiaries in the
remaining 17 States and the U.S. Territories during the third and final
implementation phase. By September 2004, nearly 2.5 million eligible
SSI� beneficiaries will have been mailed a Ticket to Work, and any eligible
beneficiary who has yet to receive a Ticket to Work in the mail can obtain
one by asking for it. To date, we have certified almost 1,100 ENs to
participate in the Ticket program, and about 22,000 SSI beneficiaries
have assigned their Tickets to an EN.
The impact of the Ticket to Work program is
being evaluated both inside and outside of SSA.� Preliminary findings
from these reviews are that SSA has made progress in developing such
a system to assist individuals with disabilities to find work and remain
in the workforce. But, given our experience so far and the comments
we have received, we are taking a comprehensive look at the Ticket program.� We
will be happy to provide the Subcommittee with the results of these reviews,
which we expect to be available shortly, and will also be happy to brief
you on their findings.
Conclusion
The President's budget for FY 2005 includes
$8.878 billion for the Limitation on Administrative Expenses (LAE), a
6.8 percent increase over our FY 2004 appropriation.� We believe
this increase in funding reflects the President's desire to meet the
needs of Americans who apply for and benefit from SSA's program, including
beneficiaries of SSI.�
I want to assure that we are committed to continuing
to improve the administration of the SSI program.� Program integrity
efforts for debt prevention, debt detection, and debt collection are
being monitored and improved through our Corrective Action Plan. We are
looking at all of the most complex areas of SSI program policy to see
if changes-even small incremental changes-can be made to make the program
simpler and less error prone.� The disability approach will be a major
simplification with regard to the taking and adjudicating of SSI disability
applications, and the approach is already yielding improved processing
times and decision making accuracy.� There has never been more focus
on helping beneficiaries become self-sufficient so that they no longer
have to rely on SSI.� The Ticket to Work program along with increased
emphasis on the other SSI work incentives are providing real opportunities
for individuals to work.
As for the longer term, we do not anticipate
that there will be any early 1990's-like spike in program growth over
the next 25 years.� Each year, SSA's Office of the Actuary publishes
a report on the SSI program and sends it to the President and Congress.� This
year's draft report projects that the projected growth in the SSI program
over the 25-year period is largely due to the overall growth in the U.S. population.� Program expenditures in constant
dollars are estimated to increase from $34.5 billion in 2004 to $43.8
billion in 2028, an increase of 1 percent per year.� When compared to
the Gross Domestic Product (GDP), SSI expenditures are projected to decline
over time, from the current level of 0.30 percent of GDP in 2003 to 0.24
percent by 2028.
I assure you that we will continue to look for
ways to improve service and ensure fiscal stewardship. I believe that
working together, SSA and the Subcommittee can find common ground for
legislation to improve and simplify SSA's ability to administer the SSI
program in a way that evokes increased congressional and public confidence
in both the program and the Agency.
Again, I appreciate the opportunity to appear
before this Subcommittee.� I will be glad to answer any questions that
you may have. Thank you.
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