No: 108-10
Date: September 22, 2003

Senate Finance Committee Approves H.R. 743, The Social Security Protection Act of 2003

On September 17, 2003, the Senate Finance Committee amended and approved H.R. 743, the Social Security Protection Act of 2003.  The House of Representatives passed H.R. 743 on April 2, 2003 (see Legislative Bulletin 108-5).  The bill reported by the Finance Committee made several additions and modifications to the House-passed bill.  Those provisions different from the House bill are indicated below with an asterisk.  (The descriptions of the provisions are based on documents provided to the Committee and the public and did not include legislative language.  The details of the descriptions of the provisions may be slightly different once the legislative language is drafted.)

Authority to Reissue Benefits Misused by Organizational Representative Payees

  • Would require the Commissioner to re-issue benefits under Titles II, VIII, or XVI whenever an individual representative payee serving 15 or more beneficiaries, or an organizational representative payee, is found to have misused a beneficiary's funds.
  • Defines "misuse" as when a representative payee converts benefits for use other than for the beneficiary.
  • Would be effective for determinations of misuse on or after January 1, 1995.

Oversight of Representative Payees

  • Would require non-governmental fee-for-service organizational representative payees to be both licensed and bonded, provided that licensing is available in the State.  (This part of provision would be effective on the first day of the 13th month after enactment.)
  • Would require the Commissioner to provide for periodic onsite reviews for all nonprofit fee-for-service payees, organizational payees (both governmental and non-governmental) representing 50 or more beneficiaries, and individual payees representing 15 or more beneficiaries.
  • Would require the Commissioner to report annually to Congress on the results of the onsite reviews.
  • Would be effective upon enactment unless otherwise noted.

Disqualification From Service As Representative Payee of Persons Convicted of Offenses Resulting in Imprisonment For More Than 1 Year, or Fleeing Prosecution, Custody, or Confinement

  • Would disqualify an individual from serving as a representative payee if he or she has been convicted of an offense resulting in more than one year of imprisonment, unless the Commissioner determines that such certification would be appropriate notwithstanding such conviction. Also, would disqualify a person who is fleeing prosecution, custody, or confinement.
  • Would require the Commissioner to share information with law enforcement on persons disqualified from service as representative payee.
  • Would require report to Congress 9 months after enactment whether existing reviews and procedures for payee selection provide sufficient safeguards.
  • Would be effective on the first day of the thirteenth month after enactment.

Fee Forfeiture in Case of Benefit Misuse by Representative Payees

  • Would require representative payees to forfeit their fee from the beneficiary's benefits for the months during which the representative payee misused the funds, as determined by the Commissioner or a court of competent jurisdiction.
  • Would be effective for any month after 180 days after enactment in which a determination of misuse is made.

    Liability of Representative Payees for Misused Benefits

  • Would provide that misused benefits by a nongovernmental representative payee shall be treated as overpayments to the representative payee, subject to current overpayment recovery authorities.
  • Would provide that any recovered benefits not reissued to the beneficiary pursuant to the first section of this legislation would be reissued under this provision to the beneficiary or their alternate representative payee, up to the total amount misused. 
  • Would be effective with respect to benefit misuse determined 180 days after enactment.

Authority to Redirect Delivery of Benefit Payments when A Representative Payee Fails to Provide Required Accounting

  • Would provide SSA with the authority to redirect payments of Social Security, Title VIII, and SSI benefits to local Social Security field offices if a representative payee fails to provide an annual accounting of benefits report.
  • Would require the Commissioner to provide proper notice prior to redirecting benefits. 
  • Would be effective 180 days after enactment.

Survey of Use of Payments to Representative Payee

  • Would authorize and appropriate $17.8 million to OIG to conduct surveys to determine how payments made to representative payees are being used on behalf of beneficiaries. 
  • Would be effective upon enactment.

Civil Monetary Penalty Authority With Respect to Wrongful Conversions by Representative Payees

  • Would authorize SSA to impose a civil monetary penalty for offenses involving misuse of Social Security, Title VIII, or SSI benefits received by a representative payee on behalf of another individual. The penalty equals up to $5,000 for each violation.  In addition, the representative payee shall be subject to an assessment of not more than twice the amount of the misused payments.
  • Would be effective for violations committed after the date of enactment.

Civil Monetary Penalty Authority With Respect to Knowing Withholding of Material Facts

  • Would authorize SSA to impose, in addition to any other penalties that apply, civil monetary penalties of up to $5,000 (and assessments) for withholding of information that is material in determining eligibility for, or the amount of, benefits, if the person knows, or should know, that the withholding of such information is misleading.
  • Would be effective with respect to violations committed after the date on which the Commissioner implements the centralized computer file required under the following section.

Issuance by Commissioner or Social Security of Receipts to Acknowledge Submission of Reports of Changes in Work or Earnings Status of Disabled Beneficiaries

  • Would require the Commissioner to issue a receipt to disabled beneficiaries each time they report their work and earnings.
  • Would be effective as soon as possible, but no later than 1 year after enactment and until such time as the Commissioner implements centralized computer file.

Denial of Title II Benefits to Persons Fleeing Prosecution, Custody, or Confinement, and to Persons Violating Probation or Parole

  • Would prohibit Title II benefits to persons fleeing prosecution, custody, or confinement, and to persons violating probation or parole, unless the Commissioner determines that good cause exists for paying such benefits.  Would amend the current prohibition of paying SSI benefits to fugitive felons so that the good cause provision would apply to Title XVI.
  • Would provide that law enforcement must be pursuing an individual in order for him or her to be considered "fleeing."  Thus, before either Social Security or SSI benefits would be withheld, law enforcement would be required to notify SSA that it intends to pursue the individual by seeking arrest, extradition, prosecution, or the revocation of probation or parole. 
  • Would also provide, if not in violation of Federal or State law, that the Commissioner furnish law enforcement officers the current address, SSN and photograph (if applicable) if necessary for the officer to perform his duties with respect to locating and apprehending the beneficiary. 
  • Would be effective the first day of the month beginning on or after the date that is 9 months after enactment.

Requirements Relating to Offers to Provide for a Fee, a Product, or Service Available without Charge from the Social Security Administration

  • Would amend Section 1140 by adding a mandatory requirement that persons or companies include in their solicitations a statement that services which they provide for a fee are available directly from SSA free of charge.
  • Would require that the statements comply with standards promulgated by the Commissioner with respect to their content, placement, visibility, and legibility. 
  • Would be effective for offers of assistance made after sixth month after enactment.
  • Would require that regulations be promulgated within 1 year after enactment.

Refusal to Recognize Certain Individuals as Claimant Representatives

  • Would provide that the Commissioner may, with notice and an opportunity to respond, disqualify or prohibit from further practice before SSA an attorney or non‑attorney representative who has been disbarred, debarred, prohibited, or suspended from any court or bar to which he or she was previously admitted to practice, or disbarred or suspended from representing individuals before any other Federal agency or any other court system authorized under the statutory authority of any other Federal agency, or convicted of any offense or held civilly liable in any matter involving the Social Security Act.
  • Would be effective upon enactment.

Penalty for Corrupt or Forcible Interference with Administration of Social Security Act

  • Would penalize persons who attempt to intimidate or impede by force or threats of force any officer or employee of the United States acting in an official capacity under the Social Security Act or persons who in any other way obstruct or impede or attempt to obstruct or impede the administration of the Social Security Act.  The maximum penalties would be $5,000 and/or 3 years imprisonment.  If the offense were committed only by threats, the person would be fined no more than $3,000 and/or 1-year imprisonment.
  • Would be effective upon enactment.

Use of Symbols, Emblems, or Names in Reference to Social Security or Medicare

  • Would update section 1140 for HCFA's new name (Centers for Medicare and Medicaid Services).  The section adds Death Benefits Update, Federal Benefits Information, Funeral Expenses, etc. as items prohibited from the use of symbols, emblems or names that may provide a false impression that the item is approved or endorsed by SSA, CMS or HHS.
  • Would be effective for items sent 180 days after enactment.

Disqualification from Payment During Trial Work Period Upon Conviction of Fraudulent Concealment of Work Activity

  • Would provide that an individual who is convicted by a Federal court of fraudulently concealing work activity during the trial work period (TWP) would not be entitled to receive a disability benefit for TWP months that occur prior to the conviction but within the same period of disability.  If payment has already been made, he or she is liable for repayment plus restitution, fines, penalties and assessments.
  • Would be effective with respect to work activity performed after date of enactment.

Authority for Judicial Orders of Restitution

  • Would authorize Federal courts to order a defendant convicted of defrauding Social Security, Special Veterans' Benefits or SSI to make restitution to SSA
  • Would establish a special fund in the Treasury for the deposit of funds so received to be used to defray expenses incurred in carrying out Titles II, VIII, and XVI, except for recovered funds that represent benefits misused by representative payees, which shall be deposited in the trust funds of general fund of the Treasury, as appropriate.
  • Would be effective with respect to violations occurring on or after enactment.

Require State and Local Government Pension Paying Entities to Indicate on a Modified Form 1099R Whether a Pension is Based on Work Not Covered by Social Security

  • Would require State and local government pension paying entities to indicate on their Form 1099R report whether the pension is based in whole or in part on earnings not covered by Social Security. 
  • Would be effective for tax years beginning after December 2003.

Authorize Cross-Program Recovery for Benefit Overpayments

  • Would allow the Social Security Administration to more fully recover overpayments paid under one program from the benefits paid under another program.
  • Would provide for withholding up to 100% of any underpayment and 10% of ongoing monthly benefits. To protect low-income beneficiaries, any recovery from SSI would be limited to the lesser of 100% of the monthly benefit or 10% of individual's total monthly income. 
  • Would be effective upon enactment.

Prohibit Benefits to Persons Not Authorized to Work in the United States

  • Would prohibit the payment of Title II benefits to any person who is not legally permitted to engage in employment in the United States at the time of application for Title II benefits.
  • Would be effective with respect to applications for benefits filed on or after January 1, 2004.

Cap on Attorney Assessments

  • Would cap the assessment for SSA processing attorney fees at $75 or 6.3% of attorney fee, whichever is lower.
  • Would adjust cap based on annual COLA's rounded down to next lower $1.
  • Would be effective 180 days after enactment.

GAO Study of Fee Payment Process for Claimant Representatives

  • Would require the General Accounting Office to study the fee payment process and report on the potential effects of extending fee withholding to Title XVI, and allowing non-attorneys the option of fee withholding under both Titles II and XVI.
  • Report would be due 24 months after date of enactment.

Eliminate Demonstration Authority Sunset Date

  • Would provide for permanent authority to waive Title II benefit requirements to conduct experiments and demonstration projects.  The current authority expires. December 17, 2004.

Expansion of Waiver Authority Available in Connection with Demonstration Projects Providing for Reductions in Disability Insurance Benefits Based on Earnings

  • Would provide the Commissioner with the authority to waive requirements of section 1148 of the Social Security Act for the mandated demonstration projects.
  • Would be effective upon enactment.

Funding of Demonstration Projects Provided for Reductions in Disability Insurance Benefits Based on Earnings

  • Would clarify that the cost of paying increased benefits will not be appropriated while the administrative costs associated with the demonstration projects will come normally from funds available for administration.
  • Would be effective upon enactment.

Availability of Federal and State Work Incentive Services to Additional Individuals

  • Would allow BPAO services and P&A systems services to be provided to those beneficiaries in section 1619(b) status, those beneficiaries receiving only a State Supplement payment, and those beneficiaries in an extended period of Medicare eligibility under Title XVIII after a period of disability under Title II has ended.
  • Would allow P&A System services to include those needed to maintain employment (in addition to those needed to secure or regain it).
  • Would be effective with respect to: (1) grants, cooperative agreements or contracts entered into on or after the date of enactment; and, (2) payments provided after the date of enactment.

Technical Amendment Clarifying Treatment for Certain Purposes of Individual Work Plans under the Ticket to Work and Self-Sufficiency Program -

  • Would treat an individual receiving vocational rehabilitation pursuant to an individual work plan established under the Ticket to Work program the same as an individual with an individualized work plan under a State plan for vocational rehabilitation services approved under the Rehabilitation Act of 1973, thereby making employers who hire such individuals eligible for the worker opportunity tax credit.
  • Would be effective as if enacted in section 505 of P.L. 106-170 (i.e., applies to individuals who began work for the employer after June 30, 1999).

GAO Report on Ticket to Work

  • Would require that GAO study and report on the effectiveness of the Ticket to Work program.

    Elimination of Transcript Requirement in Remand Cases Fully Favorable to the Claimant

  • Would provide that the Agency does not have to prepare and file a transcript with the district court after a court-ordered remand for further administrative proceedings results in a fully-favorable award of benefits.
  • Would be effective with respect to determinations made upon remand made on or after the date of enactment.

Nonpayment of Benefits upon Removal from the United States

  • Would end the exemption from nonpayment of benefits for aliens removed from the United States for smuggling other aliens into the United States .
  • Would apply to removal notices received from the Attorney General after the date of enactment.

Reinstatement of Certain Reporting Requirements

  • Would continue the requirement for the Board of Trustees report on the OASDI, HI, and SMI trust funds, continuing disability reviews reports, and the disability preeffectuation review report.
  • Would be effective upon enactment.

Clarification of Definitions Regarding Certain Survivor Benefits

  • Would provide a limited exception to the 9-month duration-of-marriage requirement for widow(er)'s benefits.  This exception would apply in cases in which the marriage was postponed by legal impediments to the marriage caused by State restrictions on divorce due to mental incompetence or similar incapacity.
  • Would apply to applications filed during months ending after the date of enactment.

Clarification Respecting the FICA and SECA Tax Exemptions for an Individual Whose Earnings Are Subject to the Laws of a Totalization Agreement Partner

  • Would provide clear legal authority to exempt a worker's earnings from U.S. Social Security tax in cases where their earnings were subject to a foreign country's laws in accordance with a U.S. totalization agreement, but the foreign country's law does not require compulsory contributions with respect to those earnings.
  • Would be effective upon enactment.

Coverage under Divided Retirement System for Public Employees

  • Would extend the authority to establish a divided retirement system to all States.
  • Would be effective upon enactment.

Compensation for the Social Security Advisory Board

  • Would establish compensation for SS Advisory Board members at the daily rate of basic pay for level IV of the Senior Executive Schedule for each day in which the member is engaged in the business of the Board.
  • Would be effective January 1, 2003.

60-Month Period of Employment Requirement for Application of Government Pension Offset Exemption

  • Would require that State and local government workers be covered by Social Security throughout their last 5 years of employment with the government entity in order to be exempt from the government pension offset provision.
  • Would be effective for applications filed after the month of enactment.  However, would not apply to individuals whose last day of employment for the State or local governmental entity was covered by Social Security and occurs on or before December 31, 2003.

Post-1956 Military Wage Credits

  • Would transfer from general funds the remaining balance owed to the Social Security and Medicare trust funds for deemed military wags credits for 2000 and 2001 and make conforming amendments to reflect the termination of deemed military wage credits. 
  • Would be effective upon enactment.

Technical Correction Relating to Responsible Agency Head

  • Would delete all references to the "Secretary of Health and Human Services" found in Section 1143 (which requires issuance of Social Security Statements) of the Social Security Act and replaces them with the "Commissioner of Social Security."
  • Would be effective upon enactment.

Technical Correction Relating to Retirement Benefits of Ministers

  • Would provide a conforming change to the Social Security Act to exclude, for Social Security benefit purposes, certain benefits received by retired ministers and members of religious orders.  This would conform the treatment of these benefits to their treatment for Social Security tax purposes.
  • Would be effective for years beginning before, on, or after December 1994.

Technical Corrections Relating to Domestic Employment

  • Would provide that references to domestic employment be removed from the provisions in the law that define agricultural employment, and the provisions that define domestic employment would specify that domestic employment includes domestic service performed on a farm. 
  • Would be effective upon enactment.

Technical Corrections of Outdated References

  • Would correct various outdated references in the Social Security Act and related laws.  Over the years, provisions of the Social Security Act, the Internal Revenue Code, and other laws have been deleted, re-designated, or otherwise amended.

    Technical Correction Respecting Self-Employment Income in Community Property States

  • Would conform the provision in the Social Security Act and the Internal Revenue Code to current practice in both community property and non-community property States--to provide that income from a trade or business that is not a partnership will be taxed and credited to the spouse who is carrying on the trade or business or to each spouse based on their distributive share of the gross earnings, if jointly operated
  • Would be effective upon enactment.

Technical Changes to the Railroad Retirement and Survivors' Improvement Act of 2001

  • Would make a number of technical and clerical changes regarding Railroad Retirement Investment Trust relating to quorum rules, transfers, investments, administrative expenses and exemption from State and local taxes. 
  • Would be effective upon enactment.

Exclusion from Income for Certain Infrequent or Irregular Income and Certain Interest or Dividend Income

  • Would change the calculation of infrequent and irregular income from a monthly to a quarterly basis Also would exclude from the determination of an individual's income all interest and dividend income earned on countable resources.
  • Would be effective with respect to benefits payable for months that begin more than 90 days after the date of enactment.

Uniform 9-Month Resource Exclusion Periods

  • Would increase to 9 months and make uniform the time period for excluding from resources amounts attributable to payments of past-due Social Security and SSI benefits and earned income and child tax credits.
  • Would be effective for benefits payable on or after the date of enactment.

Modification of the Dedicated Account Requirement

  • Would allow the funds in the account to be used for reimbursement of certain past expenditures incurred by the representative payee on behalf of the disabled child.  Would also provide that funds from the dedicated account can be used for purposes that are for the good of the beneficiary, not just for purposes related to the impairment of the beneficiary.
  • Would be effective upon January 1, 2004, and apply with respect to expenditures of funds from dedicated accounts on or after that date or accounts established on or after that date.

Elimination of Certain Restrictions on the Application of the Student Earned Income Exclusion

  • Would permit the student earned income exclusion to apply to any individual under age 22 who is a student. Thus, students under age 22 who are married or heads of households will now be eligible for the exclusion. 
  • Would be effective for benefits payable beginning 1 year after month of enactment.

Exclusion of Americorps and Other Volunteer Benefits for Purposes of Determining Supplemental Security Income Eligibility and Benefit Amounts and Social Security Disability Insurance Entitlement

  • Would exclude all payments and benefits to all Americorps volunteers, both cash and in-kind, for the purpose of determining SSI eligibility and benefit amounts and for the purpose of determining initial and continuing eligibility for Social Security disability insurance benefits. 
  • Would be effective for benefits payable beginning the month after the month of enactment.

Exception to Retrospective Monthly Accounting for Nonrecurring Income

  • Would eliminate triple counting by providing that one-time, nonrecurring income would be counted only for the month that the income is received, and not for any other month during the transition to retrospective monthly accounting during the first 3 months of an individual's SSI eligibility.
  • Would be effective for benefits payable for months that begin on or after 1 year following the date of enactment.

Removal of Restriction on Payment of Benefits to Children Who Are Born or Who Become Blind or Disabled after Their Military Parents Are Stationed Overseas

  • Would extend the current law exception for SSI eligibility for blind and disabled children of military personnel overseas to blind and disabled children of military personnel who were born overseas, who became blind or disabled while overseas, or who first applied for SSI benefits overseas.
  • Would be effective for benefits payable for months beginning after enactment, but only on the basis of an application filed after enactment.

Treatment of Education-Related Income and Resources

  • Would exclude from the determination of income any gift to an individual for use in paying tuition or educational fees, just as grants, scholarships and fellowships for such use are currently excluded from the determination of income. 
  • Would also exclude grants, scholarships, fellowships, or gifts to be used for tuition or education fees from an individual's countable resources for 9 months after the month of receipt.
  • Would be effective for benefits payable for months that begin more than 90 days after the date of enactment.

Monthly Treatment of Uniformed Service Compensation

  • Would count cash military compensation as reported on a monthly leave and earnings statement issued by the military, which reflects compensation earned in the prior month, as received in the prior month. 
  • Would be effective for benefits payable for months beginning at least 90 days after the date of enactment.

Update for Resource Limit

  • Would increase the resource limits to $3,000 for individuals and $4,500 for couples, and indexes both amounts for inflation. (Currently, the monthly resource limits are $2,000 for individuals and $3,000 for couples.)
  • Would be effective for months that begin more than 90 days after the date of enactment.

Review of State Agency Blindness and Disability Determinations

  • Would require the Commissioner to review 25% of all favorable SSI initial disability and blindness decisions for adults in 2004.  The percentage of required reviews would increase to 50% for 2005 and beyond.
  • Would be effective January 1, 2004.