2016 Annual Report of the SSI Program

II. Highlights

The SSI program is a nationwide Federal assistance program administered by SSA that guarantees a minimum level of income for aged, blind, or disabled individuals. This section presents highlights of recent SSI program experience, a summary of important changes to the program in the last year, a discussion of current issues facing the SSI program, and a summary of the key results from the 25-year projections.

A. Recent Program Experience

SSI program experience during the past year included the following:

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During calendar year 2015, 1.9 million individuals applied for SSI benefits based on blindness or disability, a decrease of 1 percent from 2014. Additionally, 147 thousand individuals applied for SSI benefits based on age, an increase of 4 percent as compared to the 142 thousand who applied in 2014. In 2015, 800 thousand applicants became new recipients of SSI benefits, a decrease of 1 percent as compared to the 812 thousand who became new recipients in 2014.

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Each month on average during calendar year 2015, 8.2 million individuals received Federal SSI benefits. This group was composed of 1.1 million aged recipients and 7.1 million blind or disabled recipients, of which 65 thousand were blind. Of these 7.1 million blind or disabled recipients, 1.3 million were under age 18, and 1.0 million were aged 65 or older. During the year, 9.1 million aged, blind, or disabled individuals received at least 1 month’s Federal SSI benefit.

•	Federal expenditures for payments under the SSI program in calendar year 2015 totaled $54.8 billion, up from $54.2 billion in 2014.

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Each month on average during calendar year 2015, 1.5 million individuals received federally administered State supplementation payments. This group was composed of 0.4 million aged recipients, 1.1 million disabled recipients, and 21 thousand blind recipients. During calendar year 2015, 1.7 million individuals received at least 1 month’s federally administered State supplementation payment.

•	State expenditures for Federally administered supplements, excluding fees for Federal administration totaled $2.6 billion in calendar year 2015, down from $3.1 billion in 2014.

•	In fiscal year 2015, 95 percent of SSI recipients received their benefits electronically, which was roughly the same level as in fiscal year 2014.

•	The cost of administering the SSI program in fiscal year 2015 was $4.2 billion, which was roughly 7 percent of total federally administered SSI expenditures.

•	In January 2016, 8.3 million individuals received federally administered monthly SSI benefits averaging $542. Of these, 8.2 million received monthly Federal SSI payments averaging $526, and 1.5 million received monthly State supplementation payments averaging $142.

B. SSI Legislation Since The 2015 Annual Report

Since we submitted the 2015 Annual Report of the Supplemental Security Income Program to the President and Congress, the following legislative changes have been made to the SSI program:

Public Law 114-74, enacted November 2, 2015

The “Bipartisan Budget Act of 2015” included a number of provisions that affect SSA's programs. Of particular note with respect to the SSI program is a provision that authorizes SSA to establish automated information exchanges with private commercial payroll data providers. This authority allows us to regularly obtain wage data directly from a private company that collects and maintains it, and use that information to update our SSI records. When implemented, this will enable us to quickly and efficiently update our records and adjust SSI payments for recipients who work. Recipients and deemors who elect to give us their permission to verify their wages in this way will be exempted from certain penalties for failing to report to us when they change employer.¹

Two other provisions are also noteworthy for the SSI program: One increases the amounts authorized for SSA's program integrity work, such as SSI redeterminations and medical continuing disability reviews.² The other requires a qualified medical professional to complete the medical portion of a disability determination.³

Public Law 114-63, enacted October 7, 2015

The “Ensuring Access to Clinical Trials Act of 2015” made permanent the exclusion of the first $2,000 in payments per calendar year that an SSI recipient receives as compensation for participation in certain clinical trials. Prior to enactment, this exclusion had been scheduled to end (or “sunset”) in October 2015.

C. Current Issues Facing The SSI Program

For more than 40 years, the SSI program has provided a safety net for aged, blind, and disabled Americans who have nowhere else to turn, and rely on the cash assistance provided by SSI for their basic needs of food and shelter. Because the program plays such a crucial role in the lives of about eight and a half mil- lion Americans, we are charged with administering it as efficiently as possible, and with paying the right person the right amount of SSI benefits at the right time. Further, because SSI is funded from general tax revenues, we are committed to effectively overseeing the program, protecting taxpayer dollars, and maintaining the public's trust.

Program Integrity

We strive to prevent improper payments—either paying too much (overpayments) or paying too little (underpayments)—and to find, correct, and recover improper payments as soon as possible when they occur.

Making correct payments is especially challenging because SSI is a means-tested program. Accordingly, the correct monthly SSI payment amount changes as a recipient's income, resources, living arrangements, and other circumstances change. The first line of defense against improper payments is timely reporting of these changing circumstances. Recipients are required to report to us changes that may affect their benefits. However, due to any number of circumstances, including impairments for which they receive benefits, recipients may have difficulty in reporting changes in a timely manner. For this reason, it is vitally import- ant that we have a strong portfolio of program integrity tools to detect unreported changes that may affect SSI eligibility and payment, ensuring that only those people eligible for benefits continue to receive them, and receive them in the correct amount.

One of our most effective program integrity tools is our SSI redeterminations process, which are reviews of all of the nonmedical factors of eligibility to determine whether the recipient is still eligible for SSI and receives the correct payment amount. Since we do not receive the administrative funding to do a redetermination on every SSI recipient every year, we use a statistical model to prioritize redeterminations so we can focus on those most likely to involve a change that affects eligibility or the amount of benefits.

Redeterminations save billions of program dollars with a comparatively small investment of administrative funds. Based on the program integrity funding provided to SSA in the FY 2016 Budget, we expect to complete about 2.622 million SSI redeterminations this fiscal year. The President's proposed FY 2017 Budget would provide funding sufficient to complete 2.8 million SSI redeterminations in FY 2017.⁴ Our estimates indicate that those FY 2017 redeterminations would yield about $3 of net Federal SSI and Medicaid savings over the first ten years on average per $1 budgeted to conduct those reviews.

Ongoing Efforts
As we have described in prior years’ Annual Reports on the Supplemental Security Income Program, we rely on emerging technology to support our efforts to review recipient eligibility. For example, we use the Access to Financial Institutions (AFI) process to identify excess resources in bank accounts of SSI applicants and recipients by electronically checking for known and potentially unreported accounts directly with the financial institution. This process has proven very cost effective and useful in identifying undisclosed accounts.

Another important tool we use to reduce improper payments is the SSI Telephone Wage Reporting System (SSITWR). SSITWR is an automated, toll-free telephone number that allows recipients and representative payees to report wages by calling in and using either voice recognition or touch-tone software.

We also have a mobile application that allows individuals to make monthly wage reports through an Android or iPhone smartphone. By entering information through a series of easily followed prompts, recipients can quickly and efficiently report wages from wherever they are. We expect new tools such as these for wage reporting will help reduce improper SSI payments, as compliance with reporting responsibilities is made increasingly easier.

Future Improvements
We continually look for new ways to improve how we prevent, detect and correct improper payments. For example, we recently implemented a method to detect and verify when SSI recipients own real property (e.g., houses other than their primary residence) that they have not reported to us. The President's Budget for FY 2017 includes a legislative proposal that would authorize us to build upon and further automate this process.

In addition, the Bipartisan Budget Act of 2015 authorized us to enter into information exchanges with private, commercial payroll data providers, which collect and sell wage data that are more detailed and timely than the data available to us through our existing exchanges with other Federal agencies. We anticipate that these exchanges, when implemented, will help us prevent improper payments and conserve employee time by allowing us to compare a provider's wage data with those in our records, correct discrepancies, and adjust benefits accordingly. We are currently working to implement such an exchange or exchanges in calendar year 2017.

The President's FY 2017 Budget proposes to move from the current annual wage reporting process for employers to a quarterly one. Quarterly reporting would provide wage information sooner in many cases, allowing us to match it to the SSI record sooner, thereby reducing the amount of overpayment caused by delayed reporting of wages.

Additional Proposed SSI Program Changes

In addition to the legislative proposals described above relating to program integrity, the President's FY 2017 Budget includes several other proposals to improve the SSI program.

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Extend SSI Time Limits for Qualified Refugees—This proposal would underscore the nation's commitment to refugees, asylees, and other humanitarian immigrants—who come to America with very little and frequently have nowhere else to go—by again extending the time limit for benefits from 7 to 9 years during FYs 2017 and 2018.

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Hold Fraud Facilitators Liable for Overpayments—This proposal would hold fraud facilitators liable for overpayments by allowing SSA to recover SSI overpayments, with interest, from a third party who was responsible for making fraudulent statements or providing false evidence that allowed the recipient to receive payments that should not have been paid.

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Authorize SSA to Conduct a New Continuing Disability Review when Fraud is Involved in a Prior Continuing Disability Review––This proposal would authorize us to immediately conduct a new CDR to determine continuing eligibility for benefits if we believe that fraud or similar fault was involved in a prior CDR. During this review, SSA would be authorized to disregard any evidence if there is reason to believe that fraud or similar fault was involved in the providing of such evidence.

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Government-Wide Use of Customs and Border Patrol Entry and Exit Data to Prevent Improper Payments—This proposal would provide for the use of U.S. Customs and Border Protection entry and exit information, which may be useful in preventing improper payments in Federal pro- grams that require U.S. residency in order to receive benefits, including the SSI program.

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Establish Workers’ Compensation Information Reporting—This proposal would improve pro- gram integrity by requiring states, local governments, and private insurers that administer Workers' Compensation and Public Disability Benefits to provide this information to SSA. Furthermore, it would provide for the development and implementation of a system to collect such information from states, local governments, and insurers.

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Authorize SSA to Use All Collection Tools to Recover Funds in Certain Scenarios, Such as When Someone Improperly Cashes a Beneficiary's Check or Removes a Benefit from a Joint Account––This proposal would authorize SSA to use all of its overpayment collection tools, such as credit bureau reporting and administrative wage garnishment, to recover certain incorrect payments that do not meet the statutory definition of an overpayment.

•	Exclude SSA Debts from Discharge in Bankruptcy––This proposal would exclude debts that SSA collects––including overpayments of SSI benefits––from discharge in bankruptcy, except when it would cause an undue hardship.

•	Conform Treatment of State and Local Government Earned Income Tax Credits (EITC) and Child Tax Credits (CTC) for SSI—This proposal would simplify administration of the SSI program by excluding state EITCs and CTCs, in the manner in which similar, Federal tax payments are excluded.

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Eliminate SSI Dedicated Accounts––This proposal would eliminate the requirement that we deposit certain large, retroactive SSI benefits due a child into a special account, called a “dedicated account.” The child’s representative payee—who is typically a parent—can expend funds from such an account only for education, health care, and certain other expenses. These restrictions are often considered intrusive and confusing, and oversight of these accounts is labor-intensive for both SSA and representative payees.

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Strengthening Child Support Enforcement and Establishment––The Budget includes several proposals aimed at increasing and improving child support collections and program efficiency. We generally reduce a child's monthly SSI benefit by two-thirds of any monthly child support payment he or she also receives. By increasing the amount of child support collected, these proposals would result in savings to the SSI program.

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Provide Mandatory Funding Dedicated to Modernizing SSA's Information Technology––This proposal would provide SSA with $240 million in mandatory funding over fiscal years 2018, 2019, and 2020 dedicated to modernizing SSA’s information technology (IT), specifically its core databases, programming languages, and IT infrastructure.

Avoiding Unintended Consequences

Another important issue for policy makers will be the extent to which the SSI program may be subject to modification in order to maintain consistency with the nation's network of social insurance and assistance programs. Although SSI is sometimes overlooked in broader discussions, the program's very structure means that changes outside of the program could result in unintended consequences.

Careful consideration is required as we seek to adjust our country's social programs to address the changing needs of society. These programs were not intended to function in isolation. Rather they were constructed to operate in coordination with each other, much like the individual squares of a quilt. As policy makers move forward with plans to modernize the nation's social insurance and means-tested assistance programs, they will be challenged to avoid creating unintended consequences in the SSI program.

Conclusion

More than 40 years after its implementation, the SSI program continues to provide support for millions of vulnerable Americans. Our goal remains consistent: to pay the right person the right benefit at the right time, and we will use every tool at our disposal to ensure that SSI payments are accurate. Moving forward, we will continue to search for ways to simplify the SSI program and to pursue technological improvements, resulting in a program that is easier for the public to understand, more efficient for us to administer, and continues to provide support to vulnerable Americans.

D. Key Results From The 25-Year Projections

The major findings in the 25-year projections prepared for this report are:

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Following small declines in the SSI recipient population in the late 1990s due to the combined impact of Public Law 104-121 (the Contract With America Advancement Act of 1996) and Public Law 104-193 (the Personal Responsibility and Work Opportunity Reconciliation Act of 1996), modest growth in the SSI rolls resumed in 2000. The economic recession that began in late 2007 led to faster growth in the SSI recipient population in recent years, but returned to a more modest level of growth in 2014. We project this modest level of growth to continue throughout the remainder of the projection period at a rate somewhat slower than the rate of growth in the U.S. population. By 2040, we estimate that the Federal SSI recipient population will reach 9.1 million. As a percentage of the total U.S. population, we project the number of Federal SSI recipients to decrease very gradually from 2.48 in 2015 to 2.29 percent of the population by 2040.

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We estimate that Federal expenditures for SSI payments in calendar year 2016 will increase by $0.1 billion to $55.0 billion, an increase of 0.3 percent from 2015 levels. In dollars adjusted by the Consumer Price Index to 2016 levels, we pro­ject that SSI program outlays will increase to $60.6 billion in 2040, a real increase of 0.4 percent per year.

•	Federal SSI expenditures were 0.31 percent of Gross Domestic Product (GDP) in 2015. We project that such expenditures will decrease to 0.29 percent of GDP in 2016, and continue to decline thereafter to 0.20 percent of GDP by 2040.

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1

See P.L. 114-74 § 824.

2

See P.L. 114-74 § 815.

3

See P.L. 114-74 § 832.

4

In our efforts to accurately pay benefits, we also conduct continuing disability reviews (CDR). CDRs are periodic reviews of a recipient's medical impairment to determine if he or she is still disabled according to the statute. Generally, the cases with the highest likelihood of medical improvement receive a full medical review, whereas, the remaining cases due for review receive a mailer requesting updates on their impairments, medical treatment, and work activities, subject to available administrative funding.