Proposal To Have AAJs Holding Hearings

     Social Security has asked the Office of Management and Budget (OMB) to approve proposed regulations that would allow Administrative Appeals Judges (AAJs) to hold hearings. The AAJs currently handle cases at the Appeals Council. When you combine this with the recent proposal that video hearings could be forced upon claimants you get an idea of what Social Security has in mind -- the end of Administrative Law Judge hearings. There would be some huge building housing AAJs working away in cubicles holding only video hearings. The AAJs would be subject to intensive review to make sure they tow the party line. Even though Social Security's centralized operations are the most troublesome parts of the agency in my opinion, Social Security management loves centralization. Few people in upper Social Security management have worked in the field. They just distrust field operations. They like putting their eggs in big baskets. 

    Really, does anyone think that the centralized payment centers, the teleservice centers and the Appeals Council are the most efficient parts of Social Security?

Andrew Saul And The MTA

     Andrew Saul's nomination to become Commissioner of Social Security is pending before the Senate but Saul isn't sitting idle. He's very much involved in a big New York City transit controversy.

Ennis Sworn In As Inspector General

     From a press release:

Gail S. Ennis, of Maryland, was sworn in as the Inspector General for the Social Security Administration (SSA) by Acting Commissioner of Social Security Nancy A. Berryhill at a ceremony today. President Donald Trump nominated Ms. Ennis for the position, and the Senate confirmed her nomination on January 2, 2019. ...

Ms. Ennis began her legal career in 1998 as an associate at WilmerHale in the firm’s Securities Department. In 2007, Ms. Ennis became a Partner in the firm’s Securities Litigation and Enforcement practice and later also joined the firm’s Bank Regulation and Enforcement practice. Ms. Ennis’ practice focused on advising companies, boards of directors, audit committees, and special committees of large, multi-national corporations or financial institutions in connection with government and independent investigations related to the federal securities laws, as well as consumer protection laws. She led large teams of lawyers, forensic accountants, IT and discovery professionals, and support staff investigating issues including financial statement reporting and disclosure errors, accounting irregularities, and misconduct by current or former officers or employees. Ms. Ennis also advised clients on improving processes, procedures, and internal controls to avoid future violations or to comply with settlement terms or changes in laws or regulations. Ms. Ennis appeared before the SEC and the Consumer Financial Protection Bureau.

 

Ms. Ennis holds a Bachelor of Science from the University of North Carolina at Chapel Hill and a Juris Doctor from Brooklyn Law School. ...

Why Does This Keep Happening?

     A television station in Nyack, NY reports on a woman who had to go through a long fight to get approved for Social Security disability benefits but didn't receive her back benefits until seven months later and then only after the television station started asking questions. Of course, all this delay caused the poor, sick woman great financial problems.

     I don't know enough about the case to say what happened but I can say the most common cause for this sort of delay is what I call a phantom windfall offset. At the very beginning, when the claimant first contacts Social Security, the field office takes both a claim for Disability Insurance Benefits (DIB) and Supplemental Security Income (SSI). The SSI claim is quickly denied because of excess income or resources. There was no point in the claimant ever filing the claim except that the field office is assigned staff based in part on how many claims they take so they have an incentive to take useless SSI claims. (Yes, I've heard field office staff say, no, they're just trying to protect claimants but I'm not buying it.) Even though it's been denied, the SSI claim remains active in Social Security's computer system. Once the DIB claim is approved, the back DIB benefits aren't paid because the payment center is waiting to find out how much SSI was paid. However, there's no action on the SSI since it was long since denied. The payment center just does nothing. The field office which would implement the SSI if it were being paid and which is supposed to tell the payment center if no SSI is being paid does nothing. Maybe somebody at Social Security realizes there's a problem and resolves it. Maybe nothing happens until the claimant complains. Maybe nothing happens even if the claimant does complain because everybody is so busy. How often do phantom windfall offsets happen? I'd guess a few hundred thousand times a year. Social Security certainly knows about the problem. Why can't they get it fixed? Everybody is just so busy. Problems that cause delays in benefit payments aren't nearly so important as the pointless search for another Eric Conn. (Hint to Social Security: There isn't another Eric Conn out there.)

Growth Of Social Security Online Presence

Rep Payee Rips Off 250 In Alabama

     From a television station in Alabama:

A Tuscaloosa Easterseals worker is facing federal prison time for wire fraud. Court records show Tamara Jean Conwell will plead guilty in the case.  

Conwell worked as a representative payee with Easterseals of West Alabama, where she managed the benefits of nearly 250 social security recipients.  

 Federal prosecutors say she schemed to use more than $105,000 intended for those beneficiaries for her own personal expenses. She has agreed to pay that amount in restitution. ...

Social Security Disability Trust Fund Operations 2017-18

Disability Insurance
(Amounts in billions)

Quarter	Total income	Total outgo	Net increase in asset reserves	Asset reserves at end of quarter
Qtr 1, 2017	$43.9	$36.5	$7.4	$53.7
Qtr 2, 2017	49.1	36.9	12.2	65.9
Qtr 3, 2017	40.0	36.4	3.5	69.4
Qtr 4, 2017	38.0	35.9	2.0	71.5
Qtr 1, 2018	44.7	36.9	7.8	79.3
Qtr 2, 2018	47.0	37.0	9.9	89.2
Qtr 3, 2018	40.6	36.7	3.9	93.1
Qtr 4, 2018	40.1	36.1	3.9	97.1

Notes:

The net increase in asset reserves is total income less total outgo. Data are provided by the Department of the Treasury in monthly reports.

Avoiding FICA Taxes Comes At A Cost

     The Center for Retirement Research at Boston College has a new study out on the problem of FICA tax avoidance by independent contractors and others who make a living in the “gig economy” or by selling online. They estimate it’s costing the Social Security trust funds $6.4 billion per year in lost revenues. They also note that this sort of thing leaves those involved with lower benefit amounts or no benefits once they become disabled or retire. They don’t mention the secondary cost to taxpayers of additional Supplemental Security Income (SSI) benefits paid to those who failed to pay FICA taxes when they were working.

Some Disability Numbers

     Social Security has posted numbers through the end of 2018 for disability claims filed and approved. The number of claims received for adjudication in 2018 was 1,300,668. This was down from 1,377,803 in 2017 and 1,926,398 in 2010 when the peak occurred.  The number of claims approved in 2018 was 733,879, down from 762,141 in 2017 and 1,052,551 in the peak year of 2010. The number of people in current benefit payment status was 8,537,332, which was down from 8,695,475 at the end of 2017 and 8,954,518 in 2014 at the peak.

Saul Renominated

     President Trump has renominated Andrew Saul for a six year term as Commissioner of Social Security.

SSI Payment Irregularities

     From a summary of a report by Social Security's Office of Inspector General:

Our Office of Investigations (OI) has received several allegations concerning SSA employees who issued fraudulent SSI [Supplemental Security Income] underpayments. As of May 2014, OI had investigated 10 allegations, which led to the conviction of 9 former employees for wrongdoing and resulted in incarceration and/or restitution to SSA[Social Security Administration] . ...

Using targeted data analysis, we identified several SSA employees who may have inappropriately processed large numbers and/or high dollar amounts of SSI  underpayments. We sent two cases to OI  for further analysis. As of the date of this review, OI was investigating both cases. We sent the remaining outlier transactions, including 35 Social Security and 57 employee personal identification numbers, to SSA for further analysis. SSA could not locate documentation and notices to support underpayments and stated employees did not always follow SSI underpayment policies and procedures. SSA representatives stated the Agency would take a number of actions to address these employee errors, including providing employees additional training. ...

     After the Eric Conn case blew up, Social Security became even more concerned about fraud than it had been. A lot of money was spent on software to identify big fraud cases. It turns out they haven't been finding much in the way of fraud committed by claimants apart from the routine individual stuff --disability claimants concealing that they had returned to work, for instance -- but they do seem to have been finding more employee fraud. It's still nickel and dime stuff though in the big picture.

SSN Tokenization Planned

     From a contracting notice posted by the Social Security Administration:

This is a Request for Information (RFI). This Sources Sought Notice is for informational and planning purposes only and shall not be construed as a solicitation or as an obligation or commitment by the Government. ...

The Social Security Administration (SSA) is considering a tokenization solution for replacing the Social Security Number (SSN) and Beneficiary Notice Control (BNC) on mailed correspondence to beneficiaries. The purpose of this Request for Information is to identify potential vendors capable of providing such a solution. ...

On September 15, 2017, the President signed into law H.R. 624, the Social Security Number Fraud Prevention Act of 2017, which became Public Law (P.L.) No. 115-59.  The law, among other provisions, restricts the inclusion of SSNs on documents the Federal government sends by mail. 

The Beneficiary Notice Control has been used to replace the SSN on some agency notices. The BNC is a 13-digit alphanumeric value that can be related back to the beneficiary’s SSN.

The usage of tokenization is being explored to replace the SSN and BNC on mailed documents.

Product Requirements

• Must be capable of supporting multiple platforms – web, cloud, and mainframe (CICS and Java/COBOL batch). 
• Must allow for multiple keys when tokenizing an SSN. The same key cannot be used consistently. The same tokenized value should never repeat (even for the same SSN. 
• Must allow for key management – where certain users can be prohibited from accessing the key(s).
• Must be able to control the length of the tokenized value – for printing and mailing the tokenized value can be no more than 13 digits. 
• The tokenized value must be unique for all time and never repeated. Meaning, the tokenized value printed on the mailed correspondence will be unique for that particular occurrence and will never be repeated again even if the correspondence is being mailed to the same individual or a completely different individual. 
• Must be capable of processing very high volumes. ...

No COLA This Year?

     Very early numbers suggest that there may be little or no Cost Of Living Adjustment (COLA) for Social Security benefits this year.

Every Other Social Security Attorney In The Country Digitized Their Records Years Ago But Not Eric Conn

     From WKYT:

He admitted to defrauding the federal government out of $550 million and is currently serving a 27 year prison sentence. However, Eric Conn's former clients and those helping them continue to deal with the aftermath of his social security scheme.

"A lot of people don't think about all of the impacts a situation like this causes," said Cary Howard, Jr.

As part of the court process Conn's well known law compound off of U.S. 23 in Floyd County ... . Inside those offices were thousands of client files. So what has happened with all of those files? Back in the fall Howard along with Barry Stilz were appointed by a federal judge as the receivers of those files. Howard and Stilz work at Lexington based law firm Kinkead and Stilz. ...

It took a couple of tractor trailer trucks and multiple box trucks to move the files to a secure space in Lexington. Howard recruiting some attorneys who aren't currently practicing and some University of Kentucky law students to organize and inventory what he now estimates is 15,000 to 18,000 client files. Howard says they were initially told there were about 8,000 files.

"There is nothing in digital form, everything is paper. There is about 60 tons of paper."  

Now that they have gotten a good amount of the files organized they are hoping to get them to the former clients. Howard says they have had about 800 files requested and have been able to locate around 600 of those. That obviously a small amount when looking at the grand total. ...

Social Security Subcommittee Members Announced

     House Ways and Means Committee Democrats and Republicans have announced the members of the Social Security Subcommittee for this Congress:

• Chair: Rep. John Larson (D-CT)
• Rep. Bill Pascrell (D-NJ)
• Rep. Linda Sanchez (D-CA)
• Rep. Brian Higgins (D-NY)
• Rep. Dan Kildee (D-MI)
• Rep. Brendan Boyle (D-PA)
• Rep. Brad Schneider (D-IL)
• Ranking Member Tom Reed (R-NY)
• Rep. Jodey Arrington (R-TX)
• Rep. Drew Ferguson (R-GA)
• Rep. Ron Estes (R-KS)

OHO Processing Time Report

     This was obtained from Social Security by the National Organization of Social Security Claimants Representatives (NOSSCR) and published in their newsletter (which is not available online to the public). It concerns the processing of requests for hearing by the agency's Office of Hearings Operations.

Click on image to view full size

Social Security Headcount Declines By 3% To Lowest Number In More Than 10 Years

      The Office of Personnel Management (OPM) has posted updated figures for the number of employees at the Social Security Administration:

• June 2018 60,898
• December 2017 62,777
• September 2017 62,297
• June 2017 61,592
• March 2017 62,183
• December 2016 63,364
• December 2015 65,518
• December 2014 65,430
• December 2013 61,957
• December 2012 64,538
• September 2011 67,136
• December 2010 70,270
• December 2009 67,486
• December 2008 63,733
• September 2008 63,990

A Real Winner Brought To Social Security By Donald Trump

     From Media Matters:

Before joining President Donald Trump's administration [as Acting Associate Commissioner at the Social Security Administration’s (SSA) Office of Strategic and Digital Communications], right-wing commentator Robert W. Patterson argued against contraceptives because “condom use robs” women of the “remarkable chemicals” in semen; said married women in the workplace have undermined society; and suggested that homosexuality is a mental disorder and sexual orientation can be forcibly changed. ...

     There's a lot more detail in the Media Matters piece. Patterson is a real nutjob.

Attorney Fees Remain Level In 2018

     Total fees paid to attorneys and others who represent Social Security claimants came to $1.21 billion in 2018, the same as in 2017. The lack of change is itself surprising. Of course, there was 1.9% inflation in 2018, so, in effect, attorneys lost 1.9% in 2018.

Waiting In Syracuse

     From the Syracuse Post-Standard:

Jamie Crouse broke his skull in two places, his collarbone and six ribs, suffered a concussion and lost hearing in one ear in a 2016 motorcycle accident.

The injuries left the chef too dizzy to work anymore in restaurants.

Despite the extensive injuries, it took the federal Social Security Administration more than two years to approve his application for disability.

Crouse is not alone. More than 7,000 people in Syracuse are waiting for hearings to decide if they qualify for Social Security disability benefits. Syracuse’s 19-month wait is among the worst in the nation. After a hearing it can take up to another six months before a decision is issued. That means injured people often struggle to make ends meet or end up homeless as they spend two years awaiting benefits for which they may be entitled. ...

Before Social Security approved his application in November, Crouse was bouncing checks and running up credit card debt.

“I was definitely going under,” he said. “I don’t know if they are understaffed or they just try to bleed you dry." ...

People in Syracuse seeking hearings face some of the longest waits in the nation. The average wait time in November for a hearing was 19 months, the tenth longest in the US.

Federal budget cuts are to blame for the long waits. The Social Security Administration’s budget was cut 9 percent between 2010 and 2018. That reduction left the agency short staffed at the same time disability applications were increasing. To fix the problem, Congress increased the Social Security Administration’s funding by $480 million in 2018 to help ease the backlog and approved a $40 million increase for 2019.

But the extra money has yet to shorten the wait for hearings here. ...

Can Social Security Maintain Building Security During The Partial Government Shutdown?

     I've posted here that Social Security will be unaffected by the partial government shutdown. It occurs to me that I may have been overbroad. The problem is building security. That's mostly provided by the Federal Protective Service (FPS), which is part of the Department of Homeland Security (DHS) and DHS is part of the shutdown. The FPS security guards at Social Security offices missed a paycheck today. They'll miss another in another two weeks. They're not going to continue working forever for free. Also, there are some Social Security offices that are located inside federal courthouses. While FPS may provide security guards within the Social Security offices inside federal courthouses, the U.S. Marshall Service provides security at the building entrances. The U.S. Marshall Service is part of the Department of Justice and it, too, is part of the partial government shutdown. The federal courts themselves are also part of the government shutdown and will close for routine business a week from today. Will the U.S. Marshall Service continue to provide building security for federal courthouses when the courts, themselves, are closed, especially given that the Marshall's Service has more urgent tasks to complete?

Form Fee Agreement

     While we knew it was coming, it still surprised me to see that Social Security had released a form fee agreement last month that attorneys representing Social Security claimants can use. This is not mandatory. Attorneys and others representing Social Security claimants can always draft their own forms. I guess I was expecting some announcement.

     Here's the key language from the form:

If SSA favorably decides my claim(s) and the decision results in past-due (retroactive) benefits, I agree to pay my representative(s) a fee that does not exceed the lesser of 25 percent of my past-due benefits or the maximum dollar amount allowed under the Social Security Act Section 206(a)(2), or such higher amount set by the Commissioner of Social Security based on the date Social Security Administration (SSA) authorizes my representative’s fee. 

Choose One:

I agree to pay the maximum fee as stated in the preceding paragraph. ($6000 as of 2018).

I agree to pay less than the maximum $________________ or  _____________%.

Read and acknowledge the following: I understand that I, my eligible spouse, any affected auxiliary beneficiary, my representative or the decision maker have the right to protest the fee authorized under this fee agreement, in writing, within 15 days from the authorization.

I understand that my representative may still request a fee even if my case does not result in past-due benefits, or the decision is not favorable. If the fee agreement cannot be approved because there are no past-due benefits or for other reasons, my representative may file a fee petition to request that SSA authorize a fee. I also understand that if there are no past-due benefits withheld, if not enough past-due benefits are withheld, or if my representative is not eligible for direct payment by SSA, I will be responsible to pay the authorized fee to my representative(s) directly. SSA does not authorize out-of-pocket costs and expenses for which I am responsible to pay directly to my representative.

Two-Tiered Fee Agreement

If SSA favorably decides my claim(s) above the ________________ administrative level, this fee agreement is void and my representative(s) may seek a higher fee by filing a fee petition. SSA must authorize this fee.

Escrow/Trust Accounts or Third-party Payments

With my consent my representative(s) has/have or will establish an escrow/trust account in the amount of $__________ 

My representative will receive a fee from another party (e.g., state, county, private entity) for $__________  and I will have no financial responsibility to pay any fee, unless SSA authorizes the total fee

     Note that this is written in fluent bureaucratese. Perhaps, because it is a Social Security form our clients will just accept it without giving us trouble but imagine the typical 10th grade dropout understanding it. Well, if you work at Social Security maybe you can't imagine that and maybe that's why this form is written in such stilted language.  The form is also flatly inaccurate because it indicates that only the Social Security Administration can authorize a fee in a two-tiered fee agreement situation. No, a federal court can also authorize a fee.

Proposed Regs On Removing Inability to Communicate in English as an Education Category Clear OMB

     The Office of Management and Budget has cleared a packet of proposed regulatory changes that the Social Security Administration had submitted on Removing Inability to Communicate in English as an Education Category. This can now be published in the Federal Register as a Notice of Proposed Rule Making (NPRM). After the NPRM is published, the public can comment. Congress can weigh in on the proposal.

Unanimous SCOTUS Opinion In Culbertson — Claimant’s Attorney Wins

     The syllabus of today’s unanimous Supreme Court opinion in Culbertson v. Berryhill:

The Social Security Act regulates the fees that attorneys may charge claimants seeking Title II benefits for representation both before the Social Security Administration and in federal court. For representa- tion in administrative proceedings, the Act provides two ways to de- termine fees. If a fee agreement exists, fees are capped at the lesser of 25% of past-due benefits or a set dollar amount—currently $6,000. 42 U. S. C. §406(a)(2)(A). Absent an agreement, the agency may set any “reasonable” fee. §406(a)(1). In either case, the agency is re- quired to withhold up to 25% of past-due benefits for direct payment of any fee. §406(a)(4). For representation in court proceedings, fees are capped at 25% of past-due benefits, and the agency has authority to withhold such benefits to pay these fees. §406(b)(1)(A). 

Petitioner Culbertson represented Katrina Wood in Social Security disability benefit proceedings before the agency and in District Court. The agency ultimately awarded Wood past-due benefits, withheld 25% of those benefits to pay any attorney’s fees, and awarded Culbertson fees under §406(a) for representation before the agency. Cul- bertson then moved for a separate fee award under §406(b) for the court proceedings, requesting a full 25% of past-due benefits. The District Court granted the request, but only in part, because Culbertson did not subtract the amount he had already received under §406(a) for his agency-level representation. The Eleventh Circuit af- firmed, holding that the 25% limit under §406(b) applies to the total fees awarded under both §§406(a) and (b). 

Held: Section 406(b)(1)(A)’s 25% cap applies only to fees for court representation and not to the aggregate fees awarded under §§406(a) and (b). Pp. 5–9. 

(a) Section 406(b) provides that a court rendering a favorable judgment to a claimant “represented before the court by an attorney” may award “a reasonable fee for such representation, not in excess of 25 percent” of past-due benefits. Here, the adjective “such,” which means “[o]f the kind or degree already described or implied,” refers to the only form of representation “already described” in §406(b)—i.e., “represent[ation] before the court.” Thus, the 25% cap applies only to fees for representation before the court, not the agency. 

Subsections (a) and (b) address different stages of the representa- tion and use different methods for calculating fees. Given this statutory structure, applying §406(b)’s 25% cap on court-stage fees to §406(a) agency-stage fees, or the aggregate of §§406(a) and (b) fees, would make little sense. For example, such a reading would subject §406(a)(1)’s reasonableness limitation to §406(b)’s 25% cap—a limitation not included in the relevant provision of the statute. Had Congress wanted agency-stage fees to be capped at 25%, it presumably would have said so directly in subsection (a). Pp. 5–7. 

(b) The fact that the agency presently withholds a single pool of 25% of past-due benefits for direct payment of agency and court fees does not support an aggregate reading. The statutory text provides for two pools of money for direct payment of fees. See §§406(a)(4), (b)(1)(A). The agency’s choice to withhold only one pool of 25% of past-due benefits does not alter this text. More fundamentally, the amount of past-due benefits that the agency can withhold for direct payment does not delimit the amount of fees that can be approved for representation before the agency or the court. Pp. 7–9. 

861 F. 3d 1197, reversed and remanded.

Going After The Undocumented In Another Way

     From the Pacific Standard:

The Social Security Administration is planning to pore through wage and tax statements and notify employers when employee names and Social Security numbers are not identified in their records in what appears to be the Trump administration's latest push to target undocumented Americans in the workplace.  

The SSA announced in a recent post on its website that, in the spring of 2019, it would begin to send Employer Correction Request Notices to employers of people whose names and Social Security numbers do not match those in its system. ... 

Previous administrations have sent out such letters before, but were "temporarily halted during litigation and congressional inquiry because it was wrongfully used as a method of immigration enforcement that was found to hurt workers and employers alike, regardless of immigration status," says Sasha Feldstein, policy analyst at the California Immigrant Policy Center. 

"The resurgence of this policy after it was found to be wrongfully used and ineffective is just another example of the administration's attempt to exploit workers." ...