Barnhart Testifies On Social Security Cards And Immigrants

There have been many calls for dramatic tightening up of the requirements for issuance of Social Security numbers and Social Security cards as a means for controlling illegal immigration. There have even been calls for issuing new Social Security numbers to all Americans. Social Security Commissioner Jo Anne Barnhart testified on July 26 to the House Ways and Means Committee on the problems associated with some of these proposals. After noting but not detailing that SSA already has budget problems, she said the following:

Currently, each year staff of the agency devotes approximately 3,300 work years of effort to the SSN card issuance process. Because of the need to interview everyone receiving a new card, and examine original documents, last year’s estimate indicates that we would need an additional 67,000 work years to issue everyone a new card. This would require hiring approximately 34,000 new employees if we were required to complete the work within two years and 14,000 new employees to complete the work in five years. As noted, this estimate assumes replacing cards for 240 million individuals, which the Administration has not proposed. An approach that would mandate new tamper resistant cards to be issued only during the normal course of initial issuance and reissuance would involve significantly less additional costs. For a phased approach that limited new cards to only the approximately 30 million people who change jobs at least once during a year and the additional five million young people reaching age 14, the cost would be approximately $1.5 billion per year, using last years cost numbers.

Anti-Assignment Interpretation On LTD Offset Collection

There have been issues with some corporations and individuals representing Social Security claimants at the behest of insurance companies administering Long Term Disability (LTD) plans that pay disability benefits subject to offset for Social Security disability benefits. Many of these representers have engaged in various schemes to help the LTD insurers collect their offset out of the claimants' back benefits. Some of these schemes have been held to violate the anit-assignment provision of the Social Security Act. This is an excerpt from a change that was just posted to Social Security's Program Operations Manual Series (POMS) that points the way to a method to which SSA will not object:

A company that is paying long-term disability (LTD) benefits to a claimant requires the claimant to file for Social Security benefits. If the claim is allowed, the LTD benefit amount is offset by the amount of Social Security benefits received. As an incentive to induce the LTD insurer to refer claimants, a claimant’s representative offers to assist the insurer with recovering the overpayment made by the insurer to the claimant. The representative does not charge the claimant a fee for this service. The representative also makes it clear to the claimant that the claimant may pay the LTD directly and does not have to pay the LTD through the representative.

A company that is paying long-term disability (LTD) benefits to a claimant requires the claimant to file for Social Security benefits. If the claim is allowed, the LTD benefit amount is offset by the amount of Social Security benefits received. As an incentive to induce the LTD insurer to refer claimants, a claimant’s representative offers to assist the insurer with recovering the overpayment made by the insurer to the claimant. The representative does not charge the claimant a fee for this service. The representative also makes it clear to the claimant that the claimant may pay the LTD directly and does not have to pay the LTD through the representative.

At the representative’s request, the claimant grants the representative pre-authorization to withdraw funds from the claimant’s bank account if SSA allows the claim and awards the claimant past-due benefits. AFTER the past-due benefits are deposited into the claimant’s (now an SSA beneficiary) account, the representative gets oral authorization (in addition to the pre-authorization) to transfer those funds to the LTD insurer to satisfy the LTD overpayment. The representative also documents the oral authorization.

This arrangement is not contrary to Section 207’s prohibition against assignment. The beneficiary is exercising control over the past-due benefits deposited into his account before the funds are transferred, and the beneficiary understands that he could have elected to pay the LTD directly. The representative is not getting a fee from the beneficiary and only gets a pre-authorization to transfer funds from the beneficiary’s account in order to satisfy an obligation to a third party (i.e., the overpayment of LTD benefits). The representative also gets an oral authorization AFTER the social security money is deposited into the beneficiary’s account.

Two District Courts Rule Deficit Reduction Act Constitutional

The Hill reports that two U.S. District Courts have ruled that the Deficit Reduction Act was constitutionally passed by Congress. The Act has been challenged on the grounds that the versions passed by the two Houses of Congress were not identical. The Deficit Reduction Act contains provisions affecting Social Security, most prominently provisions concerning the payment of back SSI benefits. Judge Richard Berman in the Southern District of NY ruled the act was constitutional. This decision is on appeal to the Second Circuit Court of Appeals. Judge Frank Damrell in the Eastern District of California has made a similar ruling which may not be appealed, largely because the constitutional issue is peripheral to that lawsuit. Several similar lawsuits are pending in other Districts.

Testimony on SSA's Role In Illegal Immigration

Martin Gerry, SSA's Deputy Commissioner, Office of Disability and Income Security Programs testified before the House Government Reform Committee on July 25 concerning SSA's role in illegal immigration. His testimony included the following refutation of an urban legend:

I would like to address several misconceptions surrounding SSNs and the composition of the ESF [earnings suspense file]. First is the notion that SSA has assigned the SSN 000-00-0000 to hundreds of thousands of workers. In reality, Social Security has never assigned a social security number consisting of all zeroes to any person. 000-00-0000 is not a valid SSN and Social Security does not verify an all zero SSN.

Second, many people believe that the use of all zero SSNs is growing. Actually, wage reports with all zero SSNs have declined dramatically over the past 20 years. For example, for Tax Year 1984 Social Security has approximately one million reports with an all zero SSN, remaining in the ESF, In contrast, for Tax Year 2003, Social Security has approximately 200,000 reports with an all zero SSN in the ESF.

Chief FEDRO Job Announcement

With the Federal Reviewing Official (FEDRO) set to start in less than a week Social Security has finally posted a job announcement for a Chief Federal Reviewing Official.

Ticket to Work Meeting

The Ticket to Work and Work Incentives Advisory Panel has scheduleded a meeting in Arlington, VA for August 16-18, 2006.

SSA To Keep Attorney Fee Database And Issue 1099s

The Social Security Administration has announced that it is establishing a database of attorneys and what it is now calling "EDPNA", Eligible Direct Pay Non-Attorney, to keep records of fees paid by Social Security for representing claimants. Attorneys and "EDPNA" will have to submit their Social Security Numbers or Employer Identification Numbers (EIN) to get paid. SSA will start issuing 1099s to attorneys and "EDPNA." The notice also suggests that this database would allow SSA to collect debts owed the federal government by seizing fees. It is unclear when this will begin or how attorneys and "EDPNA" would sign up. Probably, attorneys and "EDPNA" will have to submit some form for each case giving their SSN or EIN.

FEDRO Jobs Posted

Social Security has posted what is described as "� few vacancies" for G.S. 13 Management Analysts with the Office of the Federal Reviewing Officer.

International Update

Social Security's Office of Policy has released its International Update, giving information about Social Security developments in other countries.

DSI New Decisional Software

Some excerpts from the minutes of recent Executive Committee meetings of the National Council of Social Security Management Associations (NCSSMA) (emphasis added):

The DDS’s will have new software that will walk them through the decision making process [under DSI] to improve accuracy and consistency. They believe that the cases will initially take them longer due to the learning curve of the new software. It will probably not take less time but will standardize and upgrade the quality of the product...

Now the first appeal level is the federal reviewing officials (FEDRO) that will be centralized in Falls Church, VA. ... This level of appeal is expected to take the same amount of time as a reconsideration takes now. However, due to the quality of the decision making using the new software, the expectation is that allowance will be identified sooner keeping some cases out of ODAR (formally [sic] OHA). If the FEDRO disagrees with anything that the DDS documented, they have to document point by point what the changes are. The changes will be sent to the DDS so that they can see where issues are being overturned...

The judges have to follow the same process using similar software as DDS and the FEDRO.

There have been indications all along that Social Security intended to use some new software for the DSI experiment. It was unclear though whether this was merely sofware designed to keep track of cases or whether it was more substantive, software that would potentially have an effect upon how the case was decided. The material above makes it fairly clear that this new software is substantive. This raises at least a couple of issues. First, will it work? SSA has a history of trying to implement software that did not work and had to be abandoned. If that happens, DSI is likely to die quickly. Second, to what extent will the new software influence the outcome by making it harder for ROs and ALJs to overturn prior decisions? It sounds from the description above that this is the intended result. At the initial level all that DDS must do is to make a decision. At the RO or ALJ level, there must be "point by point" documentation to justify overturning the prior decision. This could easily make the ALJ hearing something other than a de novo proceeding.

This also adds a new abbreviation -- FEDRO. That name makes anyone who has traveled much on I-95 think of South of the Border.