I Keep Asking: Does This Look Out Of Control?

     Kathy Ruffing at the Center on Budget and Policy Priorities (CBPP) has compiled a report on the many safeguards against fraud and abuse in Social Security's disability programs. The chart to the left is from the report.

     The report correctly notes that while there is actually little fraud and abuse in Social Security disability that if Congress really wants to do more to combat whatever fraud and abuse there is, the agency should get better administrative funding. For instance, inadequate funding is limiting continuing disability reviews.
     Unfortunately, additional funding is unlikely to happen with this Congress. The GOP is only interested in using the relatively rare cases of fraud or abuse to justify their 80 year old losing battle against the concept of social insurance. They really don't care about the fraud and abuse itself. Good government isn't their thing.

Great Start For Hearings For Eric Conn's Former Clients

     Social Security has just started holding hearings for former clients of Eric Conn who are being threatened with benefit termination. I'm hearing that at least one Administrative Law Judge (ALJ), William Wallis, is refusing to consider or even admit into the record any evidence that is dated after the prior decision. Attorneys are submitting evidence but the ALJ is refusing to make exhibits of the evidence.  This is one way of interpreting the instructions that ALJs have been given that they cannot find that a claimant first became disabled after the prior ALJ decision but is this what Social Security intended? And, of course, the instructions to consider the claimant's condition only up to the date of the prior ALJ decision are clearly at odds with 42 U.S.C. §402(j)(2) but I suppose that the plain language of the Social Security Act doesn't matter when Congressional Republicans demand mass terminations.
     Update: The ALJ refusing to admit any evidence dated after the prior decison is not William Wallis but Sandra DiMaggio-Wallis. ALJ William Wallis might be doing the same thing but I don't have a report about him. By the way, the ALJs hearing these cases have been put into a difficult spot. They've been given weird instructions which many of them may be uncomfortable with. I don't want to be too critical of the ALJs. The problems were created much higher up at Social Security.

Former Social Security Employee Sentenced To 21 Months In Prison For Benefits Fraud

     From the Chicago Sun-Times:

A former Social Security Administration employee was sentenced to 21 months in federal prison Monday for cashing her dead mother’s Social Security checks for almost 30 years.

Georgia Thompson, 68, of Chicago, received $419,644 in fraudulent Social Security benefits from the checks between 1986 and 2014, according to a statement from the U.S. attorney’s office. ...

The Social Security Administration discovered the fraud in 2014 after realizing Thompson’s mother hadn’t used her Medicare benefits in several years, prosecutors said. ...

Acquiescence Ruling Issued

     The Social Security Administration has issued Acquiescence Ruling 15-1(4). The agency is acquiescing to the decision of the 4th Circuit Court of Appeals in Radford v. Colvin, which was decided on October 29, 2013. Radford dealt with the requirements of Social Security's Listing 1.04A. The acquiescence ruling only applies in the 4th Circuit region -- Maryland, North Carolina, South Carolina, Virginia and West Virginia.

     Mr. Radford was represented by Charlotte Hall, an attorney at my firm. I'll have to repeat here what I've been saying since Charlotte came to my firm. She's not my daughter. We're not related. The similarity in our names is coincidental.

Allsup Gets Sued For Breach Of Fiduciary Duty

     A lawsuit has been filed in St. Clair County, Illinois against Allsup, a large non-attorney group that represents Social Security disability claimants, as well as Aetna Life Insurance Company. The lawsuit alleges "breach of fiduciary duty, fraudulent misrepresentation and concealment—failing to disclose conflicts of interest and material facts, and striving to reduce or eliminate the plaintiff’s bargaining power, as well as failing to refund" money owed the plaintiff.
     Allsup does most of its work for Social Security disability claimants at the behest of large insurance companies like Aetna. These companies write Long Term Disability (LTD) insurance policies which are mostly provided as part of an employee benefits program. LTD policies always contain an offset for Social Security disability benefits. This gives a big incentive for LTD insurers to demand that LTD recipients file Social Security disability claims and pursue them aggressively with representation, with providers such as Allsup.
     If a claimant who has been drawing LTD is approved for retroactive Social Security disability benefits, the claimant's LTD is reduced not just for the future but also retroactively. The LTD insurer wants to recoup some or all of the money it has already paid the claimant.
     The insurance company has a problem in collecting money out of the claimant's retroactive Social Security disability benefits. The Social Security Act forbids attachment of Social Security benefits for this reason. Allsup came up with a plan to get around this obstacle. They would use their representational relationship to cajole claimants into allowing their back benefits to be deposited into a bank account. In theory, it was a joint account but as a practical matter Allsup has complete control over the account. Allsup would quickly siphon off the money owed to the LTD insurer as soon as the deposit came in from Social Security. Allsup is so proud of this scheme that they patented the idea! Social Security has acquiesced in this dubious practice even though the Federal Deposit Insurance Company (FDIC) has found that a bank which participated in a similar scheme was engaging in an "unsafe and unsound bank practice." It's not hard to figure out why LTD insurers like Allsup far more than law firms. Law firms wouldn't engage in this sort of behavior. At least, I hope they wouldn't!
     Michael Garavalia of Flynn, Guymon & Garavalia in Belleville, IL is representing the plaintiff.

Help For Claimants With Ancient Overpayments

     There have been news reports about the Social Security Administration attempting to collect decades old overpayments by seizing benefit payments and tax refunds. Often the alleged debtor had no idea there was an overpayment. Social Security has just put out an "Emergency Message" which says that in determining whether to grant waiver of an overpayment that if the agency is "unable to locate and review documentation of the relevant facts to support the finding of the overpayment, [the agency should] assume the debtor is without fault and approve the waiver request."

     I think this Emergency Message is significant. To explain why I'll have to give a boring explanation of how Social Security deals with cases in which a claimant objects to an alleged overpayment. Once an overpayment is alleged, the claimant can do two things. One is to appeal the overpayment, saying that they really weren't overpaid or that the overpayment isn't as much as claimed. I have one of these cases now. By the time it's over, there will probably be no overpayment and Social Security will probably owe money to my client. One big problem with appealing an overpayment is that the claimant only has 60 days to appeal. In the ancient overpayment cases, the time period to appeal was over many years ago, assuming the agency properly notified the claimant of the overpayment, which the agency will assume it did. The other way for a claimant to deal with an overpayment is to request waiver of the overpayment. To oversimplify the waiver process, the claimant has to prove that he or she wasn't at fault and that paying it back would cause hardship. One important fact about waiver requests is that there's no time limit on filing the waiver request. A claimant isn't limited to either contesting the fact of the overpayment or requesting waiver. The claimant can do both, either at the same time or sequentially.
     When a claimant wishes to contest an ancient overpayment, they will have a hard time appealing the overpayment itself since the agency will say that the time period for appealing ended many years ago. As a practical matter, this limits the claimant to the waiver process. This new policy eases the waiver process for ancient overpayment cases since the agency will usually lack documentation of the overpayment. To get waiver, the claimant will merely have to show that repayment would cause hardship.

The Wealthy Get More Out Of Social Security Than The Poor

     The National Academies of Sciences, Engineering and Medicine has issued The Growing Gap In Life Expectancy By Income: Implications For Federal Programs And Policy Responses. It's well known that persons with higher incomes live longer than those with low incomes. As an example, for those born in 1960, life expectancy at age 50 was 28.3 years for those in the lowest 20% of income but 41.9 years for those in the highest 20% of income. Naturally, if you live longer, you're going to receive more Social Security and Medicare benefits. The effect of this is that the value at age 50 of those benefits for males was $391,000 for those in the lowest 20% of earnings but $522,000 for those in the highest 20% of earnings. For females, the comparable numbers were somewhat less dramatic, $452,000 for those in the lowest 20% of earnings and $480,000 for those in the highest 20% of earnings.

     It would be possible to correct this bias in favor of persons with high incomes by reducing their Social Security benefits but that's unlikely to happen. The other possible way would be to increase benefits for lower income people. I'd say that while that's unlikely, it's not out of the question. Populist campaigns seem to be in vogue this campaign season.

Variability In Social Security Reserve Fund Performance

     You may not have heard of it but there's an International Social Security Association (ISSA). It recently released a report on the performance of larger social security reserve funds, most of which are mostly invested in stocks and non-governmental debt obligations. The nations involved aren't identified by name. I'm not sure if the U.S. Social Security Trust Funds are included in the report. In any case, what the report shows to me is huge variability. Note that the time period selected is after the 2008 crash. This was a time period in which stock and bond markets went up significantly. Below is a table from the report.