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. ...