The Unknown Hero and Pariah Has Something To Say

Ron Cooley, the subject of An Unknown Hero And A Pariah posted on this blog has asked me to post the following on his behalf:

"The contents of this message are mine personally and do not reflect any position of the Government or SSA."

The July 16 LA Times article -- He Wants No Good Deed to Go Unpaid -- quotes me as follows:

"When I bring up new groups of severely underpaid — and in some cases severely overpaid — beneficiaries, they ignore or dismiss my information. I have definitely been frozen out."

Indeed I have a list of “groups of severely overpaid” beneficiaries, each a multi-million dollar group, that SSA is ignoring. But for the present I wish to elaborate a bit on the two underpaid groups specifically referred to in the article.

The last few lines of the LA Times article state:

And Cooley is busy uncovering other cases of alleged injustice. For instance, he said, he has found 11,034 elderly and disabled widows and widowers who have been underpaid $120 million in pension benefits.

"We've been trying for over a year just to get the agency to recognize that one," he said, "and 1,372 of them have died in the meantime."

Allow me to describe that situation just a bit further. In 2004, we identified 11,034 disabled widows and widowers (97% are women), all over age 65, who are owed $120 million in back pay -- an average of about $10,900 each, from a minimum of a few dollars to a maximum of about $50,000. They are also owed an ongoing additional benefit averaging $103 monthly.

Unlike the Special Disability Workload group described at length in the article, for which resolution of the underpayments involves “mind numbingly complex” policy (and medical) issues, this group’s underpayments are simply the result of miscalculation at the time the individuals turned age 65. Whether by omission or commission, SSA did not calculate the benefit correctly. Correcting the benefits requires no more than a relatively simple recalculation. But so far, SSA has refused to do it. I have notified numerous top officials, including SSA’s Commissioner, to no avail.

A simple review of these individuals’ benefit levels (and that of their deceased spouses) shows that this group is far from affluent. The vast majority are struggling to get by. They need every penny to which they are entitled. Further, they are dying -- about 1,400 have died so far since the identification. Eventually SSA will be forced to pay the benefits, but how much of the money will go to estates -- rather than to the individuals who should get it?

One would think Commissioner Barnhart would order the correction of this problem. See her 2002 testimony: http://www.ssa.gov/legislation/testimony_022802.html.

At any rate, I am going to keep pressing to get these underpayments corrected.

Regarding the other underpaid group -- the group featured in the article -- I have taken an SSA press release from 2001 on the Special Disability Workload (before it had that name), and updated or commented on it to reflect today’s situation:

Mistakes Cut Social Security Benefits
Retroactive Payments To Average $2,000 [$6,000]

Associated Press
Friday, July 6, 2001; Page A23 [Updates in brackets are as of July 27, 2006]

About 130,000 [500,000] disabled Americans may have been shortchanged on government benefits, but officials said yesterday that they have fixed the problem and will settle up now [as of July 2006, the problem is still not fixed; the software has been deficient since the 1970s].

Those disabled Americans could begin receiving up to $20 [the average is $71] more a month and retroactive payments averaging $2,000 [$6,000], the Social Security Administration said. [The retroactive payments range from a few dollars to over $200,000].

The 130,000 [500,000] had been getting money through a supplemental security program for the needy and were not notified they could be eligible for traditional Social Security, the administration said. [Unfortunately 200,000 are dead, and about 4,000 additional are dying each year, nearly all of whom died never having seen the money owed them.] In some cases, people could be owed benefits for several years [average retroactivity is 12 years, back to 1994].

Larry G. Massanari, the Social Security Administration's acting commissioner, said a review caught the mistake [I caught the mistake -- actually it was many mistakes.], and the administration would ensure people get money they are owed [only after my campaign and not without immense amounts of pressure from me]. Those people will be contacted about the benefits.

[Yes, the living ones will be contacted over the next 10 years, through about 2015. Because a large number of these people will be receiving SSI over the next few years, but should be receiving traditional Social Security only, SSA is spending a net amount of about $16 million per year on needless SSI "maintenance" and overpayment costs.]

[Another 100,000 living SSI recipients should be added to this group, as well as another 50,000 mostly deceased former SSI recipients.]

[Complicating the problem yet further, most states could be owed large sums of Medicare dollars because these individuals received only Medicaid during those years.]

[In a smaller, separate development, over 11,000 widows and widowers, all of whom are over 65 and disabled, have been identified as owed an average of about $10,900 each in back pay (totaling $120 million) and an additional average $103 per month in current benefits. They were identified in 2004 but SSA has yet to attempt to pay them.]

……………………[unrelated material removed]…………………

Cheezum said 99.7 percent of the 52 million people who receive traditional Social Security or supplemental benefits get accurate monthly checks.

[original release] © 2001 The Washington Post Company

--Ron Cooley

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.