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National Alliance on Mental Illness
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House to Consider Social Security Legislation, NAMI Advocates Urged to Contact House Members in Support of Support Bill to Protect and Improve Representative Payee Program

On February 11, the House of Representatives is expected to consider legislation to reform the Social Security representative payee program and enact important reforms to protect the interests of vulnerable SSI and SSDI recipients with mental impairments including severe mental illness.

Action Requested

NAMI advocates are urged to contact their House member and urge them to vote in favor of HR 743 when it comes up for a vote on February 11. Urge them to oppose any effort to delay immediate passage of this important legislation so that it can be sent to President Bush and be signed into law. Remind them that protections are needed for vulnerable SSI and SSDI recipients with mental illnesses who rely on representative payees for their monthly cash benefits. All House offices can be reached can be reached by calling the Capitol Switchboard toll free at 1-800-839-5276 or at 202-224-3121 or online through www.congress.org.

The Social Security Protection Act (HR 743) has been under development for nearly four years and has already passed the House on three separate occasions. A compromise version passed the Senate late last year. Swift passage in the House will allow the bill to go immediately to the White House for President Bush’s signature.

HR 743 makes important improvements in the representative payee program for beneficiaries of the Supplemental Security Income (SSI) program and the Title II (SSDI) disability programs. It would also require that the Social Security Administration to issue written receipts and establish a centralized computer file for beneficiaries’ reports of earnings or changes in work status.

NAMI strongly supports this legislation as important step to restore integrity of the Representative Payee program and to protect the interests of SSI and SSDI beneficiaries with severe mental illnesses who receive their cash benefits through rep payees. This legislation grew out of severe high profile cases in which institutional representative payees were found to have illegally diverted cash benefits from SSI recipients. In these cases, slow to uncover illegal activity and beneficiaries were prevented from recovering back benefits that were they never received.

NAMI also supports the provisions in HR 743 that would require Social Security to establish a system to issue written receipts for earnings reports submitted by SSDI beneficiaries and a computerized system for tracking earnings. Over the years, SSDI beneficiaries have grown enormously frustrated in their efforts accurately assess whether earnings from part-time work in a given month exceed the Substantial Gainful Activity (SGA) limit. Because Social Security is often months (if not years) behind in tracking earnings, beneficiaries can inadvertently go above limits in the program go into overpayment status. Issuance of receipts from Social Security for submitted earnings report will help provide a more accurate written record of earnings. Likewise, a computerized tracking system at Social Security will help SSDI beneficiaries track earnings and use of "trial work period" months.

Background on HR 743

Approximately 8 million SSI and SSDI beneficiaries have representative payees, often family members or friends, who receive the benefits on behalf of the beneficiaries and have a responsibility to manage the benefits on behalf of these beneficiaries. HR 743 includes provisions to strengthen SSA’s ability to address abuses by representative payees. The provisions would:

  • Require non-governmental fee-for-services organizational representative payees to be bonded and licensed under state or local law.
  • Provide that when an organization has been found to misuse an individual’s benefits, the organization would not qualify for the fee.
  • Allow SSA to re-issue benefits to beneficiaries whose funds had been misused.
  • Allow SSA to treat misused benefits as "overpayments" to the representative payee or thereby triggering SSA’s authority to recover the money through tax refund offsets, referral to collection agencies, notifying credit bureaus, and offset of any future federal benefits/payments.
  • Require monitoring of representative payees, including monitoring of organizations over a certain size and government agencies serving as representative payees.
  • Require representative payees who are delinquent in filing annual accounting reports to receive the individual’s benefits in person at a local office.
  • Disqualify as representative payees people convicted of offenses and imprisoned more than a year, and people fleeing prosecution, custody, or confinement for a felony.

HR 743 would also make improvements to the attorney fee payment system to help individuals with disabilities gain access to representation by:

  • Extending the voluntary attorneys fee payment system to SSI claims and open this up to non-attorney claimant representatives (subject to SSA developing a certification plan for non-attorneys).
  • Imposing a $75 cap (indexed for inflation) on the current 6.3% assessment on approved attorney fees for Social Security and SSI claimants.

The legislation would also further protect Social Security programs and individuals by:

  • Requiring the Social Security Administration (SSA) to help people avoid overpayments by issuing receipts to beneficiaries who report changes in earnings or work status and by implementing a centralized computer file to maintain records of beneficiaries reports.
  • Clarifying civil monetary penalty authority so that sanctions may be imposed against people who withhold material facts in order to obtain or increase benefits.
  • Denying Social Security disability benefits to people fleeing prosecution, custody, or confinement for a felony, as well as probation/parole violators.
  • Requiring the Commissioner to publish regulations that allow a waiver, where good cause exists, of the non-payment of benefits to fugitive felons and those in violation of parole or probation.
  • Requiring individuals who provide Social Security-related services for a fee to explain in their solicitations that the SSA provides the services free of charge.
  • Authorizing the Commissioner to refuse to recognize certain disqualified attorneys.
  • Prohibiting individuals who fraudulently conceal work activity from being eligible for a trial work period.

HR 743 would also improve work incentives for individuals with disabilities to return to work by:

  • Making important technical corrections to the Ticket to Work and Work Incentives Improvement Act of 1999.
  • Clarifying the Work Opportunity Tax Credit so that it is also available to employers who hire a beneficiary with disabilities who is referred from any employment network, not just the State rehabilitation agency.

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