I Know! Let's Just Be Harsher!

     Social Security's Office of Inspector General (OIG) did a study on collection of overpayments through long term repayment plans. Social Security deducts amounts from current benefits to repay the debt. The amount of the deduction depends upon the claimant's income. OIG found that some claimants were so poor that their monthly repayment amount wereso low that they would die before their overpayments were recouped. OIG's response: Stop worrying about whether the claimants have enough money to live on; just recoup more each month. Social Security's response is that they agree. They want to go to collecting at least 10% of monthly benefits without regard to whether this leaves the claimant with enough money to live on. They're not sure if they can just change their regulations or whether they need new legislation.

     And by the way, many, perhaps most, of these overpayments are due to mistakes made by the Social Security Administration. Few are due to fraud.

More Cross-Program Recovery Possible

     From a recent report by Social Security's Office of Inspector General (footnotes omitted):

CPR [Cross Program Recovery] is the process of collecting overpayments for one SSA-administered program by withholding the individual’s payable benefits from another SSA-administered program [recovering an SSI overpayment from regular Social Security benefits or vice versa]. ... The Agency can use CPR to withhold up to 10 percent of individuals’ OASDI [Old Age Survivors and Disability Insurance] monthly payments and either 100 percent of individuals’ SSI monthly payments or an amount that is 10 percent of their income, whichever is lower. ...

The Agency did not always use mandatory CPR to recover OASDI and SSI overpayments, as authorized under SSPA. ....

The Agency could have used mandatory CPR to collect $257,914 in OASDI overpayments from the SSI payments of 49 of the 50 individuals we reviewed. Based on our sample results, we estimate the Agency could have imposed mandatory CPR to collect about $52.9 million in OASDI overpayments from the SSI payments of the remaining 11,268 individuals we identified. ... 

The Agency could have used mandatory CPR to collect $248,166 in SSI overpayments from the OASDI benefits of the 50 individuals we reviewed. Based on our sample results, we estimate the Agency could have imposed mandatory CPR to collect about $33.5 million in additional SSI overpayments from the OASDI benefits of the remaining 9,364 individuals we identified.

Acting Commissioner's Message

From: ^Commissioner Broadcast
Sent: Friday, May 05, 2017 4:34 PM
Subject: FY 2017 Budget

A Message To All SSA Employees

Subject:  FY 2017 Budget

I have some good news to share about the budget.  This afternoon, President Trump signed the omnibus spending bill for fiscal year 2017, which provides the Federal Government with funding for the remainder of the fiscal year.

The omnibus appropriation includes an increase to our agency’s program integrity funding, which will allow us to conduct additional continuing disability reviews and redeterminations.  It also sets aside funds to focus on reducing our hearings backlog.    

I appreciate your patience during the latest budget negotiations.  Thanks again for all you do each day to support our mission.

Nancy A. Berryhill
Acting Commissioner

Tax Evasion Hurting Social Security Trust Funds

     From the Center on Budget and Policy Priorities (CBPP):

“Egregious employment tax noncompliance” by employers has risen substantially in recent years while the IRS’s ability to recover the lost revenues and investigate fraud and embezzlement has fallen, a report by the Treasury Inspector General for Tax Administration (TIGTA) finds. More than 1 million employers owed over $45 billion in unpaid employment taxes as of December 2015, including interest and penalties. The report provides further evidence that the deep cuts to IRS funding since 2010 have weakened the agency’s ability to perform its core functions of collecting taxes and enforcing the nation’s tax laws.

This type of employer tax evasion is particularly harmful; it not only reduces federal revenues but it also hurts workers because employers often don’t report their earnings to the IRS and Social Security Administration. That makes it hard for employees and their families to claim the benefits they’ve earned when they retire, become disabled, or die and leave dependents behind. ...

     The "employment tax" they're talking about is F.I.C.A., the tax that goes to the Social Security trust funds.

Death Master File Problems

     From a recent report by Social Security's Office of Inspector General (OIG):

Death information on CDPH [California Depart of Public Health] files was not always recorded on SSA records. At the time of our audit, SSA was issuing benefit payments to 83 individuals whose PII [Personally Identifiable Information] matched that of individuals who died in California from 1970 through 2004. 

• In 34 cases, the beneficiaries were deceased. SSA terminated benefits to 28 beneficiaries and identified approximately $4.6 million in improper payments. SSA suspended payments to five beneficiaries but had not quantified the related improper payments. We estimate improper payments in these five cases totaled approximately $ 1.2 million. The remaining case did not involve improper payments. 
• In 43 cases, the beneficiaries were alive. SSA and the Office of Investigations determined that none of the cases involved improper payments to the beneficiaries. 
• In six cases, SSA was determining the beneficiaries’ status. The Office of Operations referred the cases to its regional offices for development. 

We also identified approximately 188,000 numberholders who were likely deceased but had no death information on the Numident [Social Security records]. At the time of our review, none of these numberholders was receiving SSA payments. We provided SSA with the numberholders’ information, and SSA recorded death information on most of these record. ...

     There's a lot to notice here. Yes, benefits were being improperly being paid to at least 28 people. However, there were more cases where simple data matches indicated that a person was dead when they were actually alive. More aggressive use of data matches to cut off the benefits of dead people will inevitably cut off benefits to more people who aren't dead. That's a nightmare for the people whose benefits are cut off. Notice that sensationalist media may point to 188,000 people that Social Security doesn't know are dead without mentioning that none of them is being paid benefits.

Sad Situation In Charlotte

     From a television station in Charlotte:

An east Charlotte mother doesn’t know how she’s going to care for her permanently disabled son, after the benefits that were helping to keep him alive were discontinued at the start of the month.

Lakescia Gamble reached out to FOX 46 Charlotte to tell the heartbreaking story of her 17-year-old son Jai’Quan, who was involved in a horrible accident when he was younger, and would later fall victim to his own attorney. ...

Jai’Quan’s story begins in 2005, when he was 5-years-old. He was hit by a speeding truck while playing in the front yard of his grandma’s house. ...

As if that wasn’t already enough, Gamble would later find out that the attorney she hired to facilitate a settlement with the driver’s insurance company, John L. Schurlknight of Florence, S.C., had stolen Jai’Quan’s settlement money. ...

According to the FBI, Rivers and Schurlknight failed to tell their clients when their cases had been settled, and failed to pay the client’s medical providers, instead forging client’s signatures on releases and keeping all the money received in the client’s settlements.

Schurlknight would later commit suicide at his law office the day investigators were set to meet with him. ...

Gamble said a judge ordered $15,000 to go to Jai’Quan in the form of a trust that he can’t touch until he turns 18.

She told FOX 46 Charlotte that Jai’Quan’s medical costs exceed $30,000 a year, which is why he has been receiving monthly Supplemental Security Income, or SSI benefits, to help with the costs, but now there’s a problem. ...

“Social Security is now saying he’s unable to get any benefits, not even Medicaid,” Gamble said.

Last month, Gamble received a letter from the Social Security Administration informing her that Jai’Quan’s SSI benefits would be slashed from $735 per month to zero beginning in May 2017, because Jai’Quan “has countable resources worth more than $2,000.” ...

On top of that, the Social Security Administration sent Gamble another letter informing her that she needs to pay back $6,900 within weeks due to overpayments. Days after our interview, Gamble told FOX 46 the SSA increased the amount she owes to $12,000, which she says, she can’t afford to pay. ...

     If the money in the trust can't be touched until the child turns 18, this is a mistake because the funds would not be available to the child.
     You can't tell from this article if all the funds stolen from the child have been recovered. The North Carolina State Bar has a Client Security Fund that protects clients whose money has been stolen by their attorney. I and other NC attorneys pay into the fund. I can't find any reference online to a similar fund in South Carolina where this attorney was located. If there isn't one, SC attorneys need to get their act together.

Appropriations Bill Out

     The full text of the omnibus appropriations bill that will fund the government, including the Social Security Administration, for the remainder of the fiscal year, which only has five months to go, is out. It's 1,665 pages. The Social Security part begins on page 1,042. At first glance, I see no noxious riders, that is language directing or forbidding certain agency actions, but appropriations language is notoriously difficult to read so please let me know if I've missed something.

Social Security Funding Declines

     An omnibus budget deal has been announced. It will probably be enacted shortly. Here's an excerpt from a summary of that bill:

Social Security Administration (SSA) – The bill provides $12.5 billion for the administration of SSA activities – a decrease of $ 60 million from the fiscal year 2016 enacted level. This funding will ensure those served by the program receive efficient and timely assistance and service. One-time costs for building renovations provided in fiscal year 2016 account for a majority of the decrease. The bill supports program integrity efforts at the fully authorized level of $1.8 billion, an increase of nearly $400 million over the fiscal year 2016 enacted level.

Rep Payee Problem In Iowa

      From the Des Moines Register:

Not long after he moved back to Des Moines in 2015, Dustin Driskell began using a nonprofit downtown called Social Equality to handle his disability money. 

Driskell, 36, was adopted as an infant out of foster care. His mother committed suicide when he was 5; his father died suddenly when he was 11. For several years, he was bumped around between foster homes and shelters. He’s got a laundry list of mental health diagnoses requiring a cocktail of medications. 

Driskell needs help handling money because he’s been preyed upon by those who would take what little he has. 

Yet he struggled to get Phong Heu, the owner of Social Equality, to pay his bills on time or give him money when he needed it to buy groceries and other necessities. 

“Dustin slept on his apartment bedroom floor for several months because the payee wouldn’t give him the money to buy a bed,” his sister Deanna Hepworth wrote Watchdog. ... 

With the help of a staff member from Optimae Lifeservices in the East Village, Driskell filed a complaint last fall with Social Security against Social Equality. 

And then, in October, the payee service at 699 Walnut St. abruptly closed its doors. Driskell’s payments were suspended for a spell, and he was told Social Equality was under investigation. For a time, he got emergency payments, and then those, too, faltered. ... 

Driskell and Hepworth learned about the Social Equality investigation after his payments didn’t arrive last November. 

But in that case, Social Security workers set up emergency funds for Dustin and others after regular payments were suspended. 

Payments arrived in January, February and March. But last month, payments were suspended again. They were delayed again this month until, after three calls and two visits by Hepworth to the Social Security office, they were restarted. 

The delays have meant that Driskell has had no money at times, or he borrows it from his grandmother, Optimae and Iowa’s Department of Human Services to pay for rent and groceries. ...

     By the way, this otherwise fine article includes a weird detour into the Conn case. I didn't include it above. Mentioning the Conn case makes no sense in the article. I can't imagine why the reporter included it or the editor allowed it in.

Underpayment Problems

     From a recent report by Social Security's Office of Inspector General (OIG):

An OASDI [Old Age, Survivor's and Disability Insurance] underpayment accrues when a beneficiary is due a partial or full monthly benefit amount that has not been paid. SSA’s automated systems should detect and process most underpayments due living beneficiaries. However, when SSA’s systems cannot process these underpayments, SSA employees must manually issue them. Further, SSA employees must manually process all underpayments due deceased beneficiaries.

Manually issued OASDI underpayments of $6,000 or more require a secondary review. However, SSA policy does not require a secondary review of manually issued underpayments less than $6,000. ... 

Of the 250 sampled underpayments, SSA issued 62 (25 percent) incorrectly, with payment errors totaling $90,235. Specifically, SSA employees issued 

• 45 underpayments totaling $69,348 more than what was due the beneficiaries — we project SSA issued 187,620 underpayments totaling approximately $289 million more than what was due and 
• 17 underpayments totaling $20,887 less than what was due the beneficiaries — we project that for 70,880 underpayments, SSA did not issue approximately $87 million that was due.

     You might think that the solution would be to just require supervisory approval of all underpayments but there are two problems with this. First, it would require more staff time and the agency lacks the personnel to get its current workload done. Second, supervisory approval would only get you so far. Supervisors also make mistakes, especially when they're overworked.

     If you want better performance from Social Security, you're going to have to give the agency additional operating funds.