Improving the Social Security Representative Payee Program: Serving Beneficiaries and Minimizing Misuse (2007)

This appendix presents the committee’s questions to the responses from the Social Security Administration (SSA) on the following topics: direct deposit, selection and training of representative payees, misuse, the accounting form, the Representative Payee System (RPS), and the Program Operations Manual System (POMS). The questions arose from the committee’s visits and interviews with local field offices. The questions below were formally submitted to SSA in writing, and the agency’s formal written responses are reproduced verbatim.

1. Does SSA have any yearly statistics on the use of direct deposit for beneficiaries with a payee?

The latest data readily available are from 2002. Direct-deposit use by those with and without a representative payee is reflected by the following:

Current data reflect a modest overall increase in the use of direct deposit for payments administered by SSA from 76.4 percent in 2002 to 79.8 percent in 2006.

The agency supports the use of direct deposit and looks forward to any ideas that would increase its usage within the environment of limited operational resources.

2. Does SSA encourage direct deposit whenever it is feasible? If so, how does it encourage it?

Yes, during the application process, we advise applicants of the benefits of using direct deposit and encourage them to use it. Also, periodic stuffers are included with paper checks encouraging individuals to switch to direct deposit. During contacts with our rep payees, such as during a site visit, we encourage them to use direct deposit. However, some of our volume payees have expressed a reluctance to use direct deposit because they do not want to wait for their monthly bank statements to ensure payments were actually received (in case of a change of payee).

SSA supports Treasury’s comprehensive direct-deposit marketing campaign called “Go Direct.” Go Direct is a national campaign to motivate more Americans to select direct deposit for their Social Security and other federal benefit payments. Information about Go Direct can be found online at http://www.godirect.org/about_faq.cfm.

Again, we would welcome any new ideas you may have to encourage payees to sign up for direct deposit.

3. Has SSA considered assembling a nationwide pool of professionals to serve as a corps of payees ready to serve in emergency of difficult cases?

Over the years, SSA has conducted outreach efforts to recruit new payees, particularly in metropolitan areas that generally have a larger population of disabled persons with mental and addiction issues. During our outreach efforts, we explained that while the majority of payees do it on a voluntary basis, some organizational payees may qualify to collect a payment for their payee services.

Section 205(j)(3)(G) of the Social Security Act requires field offices (FOs) to keep a list of payee sources located in the local service area and community. In POMS GN 00502.100D, FOs are encouraged to develop ongoing, cooperative relationships with community social service providers who can often provide payee contacts.

In spite of our efforts, some areas of the country have trouble finding qualified payees to serve our more challenging clientele. We welcome any suggestions you may have to recruit new qualified payee sources, provided it does not present major resource burdens on our field office components.

4. Could such payees be paid on a fee-for-service basis?

Yes, but only if they meet specific qualifications as provided by current SSA law. Sections 205(j)(4)(A) and 1631(a)(2)(D) provide authorization that permits certain types of organizational payees to collect fees from the beneficiaries for the payee services they perform. An organization must apply and be authorized by SSA in order to collect a fee. To qualify as a fee-for-service payee the organization must be

• a state or local government agency, or

• a community based, nonprofit social service agency, that is bonded and licensed by each state in which it serves as a payee (if available), and

• regularly provide payee services to at least five beneficiaries and demonstrate that it is not a creditor of the beneficiary.

Any criteria beyond these would require legislation.

5. Cases involving beneficiaries who are homeless and/or have substance-abuse problems can be very difficult for most individual payees. Has SSA considered requiring that they be served by professional, fee-for-service payees?

In sections 205(j)(2)(C)(v) and 1631(a)(2)(B)(vii), Congress expressed its preference that beneficiaries with substance abuse problems be served by organizational payees. In general, they have access to greater resources and community contacts and are less susceptible to coercion or intimidation from the beneficiary.

However, Congress allowed SSA discretion in making payee appointments for substance abusers. SSA would not support giving up that discretion because we believe that each payee appointment should be evaluated based on the unique facts of the case. Our primary concern is the well being and best interests of the beneficiary and, while a community based organization may be best for most of these clients, there may be better options for other beneficiaries.

SSA has no specific preference for organizational payees for the homeless and Congress has been silent about the need for a preference for that group.

6. In such cases (and those in question 2), could the fees be paid from funds not deducted from the beneficiary’s payment?

Without legislation, SSA has no authority to allocate funds from any other source for this purpose. Sections 205(j)(4) and 1631(a)(2)(D) of the Social Security Act provide for qualified organizations to collect a fee from the beneficiary. Organizations can and do seek funding from other sources, generally in the form of grants.

7. What are the bonding requirements for commercial payees? Has SSA considered relaxing these requirements to make it more feasible for small commercial payees to take difficult cases that are unsuitable for individual payees?

For clarification, we understand the use of the term “commercial payee” to mean all organizational payees. As we stated in item 2 above, only non-governmental fee-for-service payees are required by law to carry a bond and that bond must be of a sufficient amount to repay funds potentially lost due to a misuse event. No other type of payee, regardless of size, is required to carry a bond, although many do. We would be interested in learning whether some of our payees were interested in becoming a fee-for-service payee but were dissuaded due to the bonding requirement. We welcome any possible recommendations you may have in this regard.

8. Many of the most difficult selection and reassignment cases involve custody disputes and other heated family disputes. These issues take up lots of staff time, most of whom are not trained to handle these kinds of matters. Could SSA find a way to make social workers or mediators available to offices in these situations?

In these situations, our mission is to select the one person who will best serve the interests of the child. Although these can be difficult situations, the SSA decision maker can generally determine which parent/family member provides the greater care for the child and who is generally responsible for making purchases and satisfying the child’s needs.

Additionally, SSA interviewers have lists of a variety of referral services available to help beneficiaries and their families with a multitude of issues, including various mental health and counseling services. Our technicians are trained to offer names and numbers of the referral services upon request or when they feel it may be beneficial to our clients. We would be interested in suggestions on how SSA can make better use of available community resources.

9. We were told that SSA’s written training materials containing guidelines and instructions for being a payee were helpful but were not always available in all field offices? Does SSA believe this is a problem or aware of this issue?

We do not believe this to be an issue. All training materials are available to all field offices through our normal supply channels. In addition, all materials are also available online. The payee application includes reporting responsibilities and is given to the payee at the time of application. “A Guide for Representative Payees” is mailed to the selected payee once SSA makes the decision as to who will best serve the interest of the beneficiary.

10. Are there any written standards for volunteer groups that wish to take on payee responsibilities?

Yes, we have produced a booklet entitled “Guide for Organizational Representative Payees” which provides guidelines and suggestions to assist organizations in understanding the representative payment program. Also the pamphlet entitled “A Guide for Representative Payees” is mailed to all those selected as payee and can be requested by any group who wishes additional information. We also provide a fact sheet for organizations needing information on how to be authorized to serve as a fee-for-service payee.

In addition, we have developed a training package for our field offices to use in educating volunteer groups and organizations that wish to be representative payees. The package, which was updated this year, includes a video, a lesson plan and the “Guide for Organizational Representative Payees” booklet. The package may also be given to organizational payees for in-house training on payee duties and responsibilities.

All these materials are available to the public through the “Social Security Online” website, or by contacting one of our field offices.

11. Lack of incentive on the part of office staff to develop misuse cases seems to be a problem. We were told that it takes an average of 10 hours to document a misuse case and that employees receive no “points” for this work. Since “points” determine employee bonuses, employees lack the incentive to do this kind of work. Is that comment regarding “points” true, and what is SSA’s response to this question regarding incentives?

While we have heard this complaint from various technicians for a number of years, we have been assured by the Central Office Budget personnel that, as long as work on these cases is properly recorded in the Time and Attendance System, the field office receives appropriate work credit. In addition, the Agency has a new initiative referred to as the Social Security Unified Measurement System (SUMS) which, when fully implemented, will more accurately track workload credit. We hope this will resolve the operational concern.

12. Incentives aside, there is also a widespread perception that the SSA Inspector General will not pursue a misuse case below a certain dollar amount (we were told minima ranging from $10,000 to $20,000). Because of this, office staff will not follow up on smaller cases. Is this true, and is SSA aware that the staff factor this into their decisions in selecting a new representative payee and do not document cases of misuse?

First, we want to emphasize that two provisions of the Social Security Protection Act of 2004 expand OIG’s ability to take action against representative payees. Section 111 gives us the authority to impose civil monetary penalties against misusers. Section 201 gives us the ability to impose civil monetary penalties on representative payees who knowingly give misinformation. Therefore, we can take action even if the Department of Justice is unwilling to prosecute a case.

Whenever SSA receives an allegation of misuse, it must determine if misuse actually occurred. If it has, SSA is responsible for locating a new payee for the beneficiary, notifying and pursuing recovery of the misused funds from the prior payee. SSA’s actions prevent any continued abuse by the rep payee and are completely separate from any action taken by the OIG. Only after SSA has completed its work on the misuse case is it referred to the OIG for consideration of criminal prosecution. The OIG does not prosecute the case; rather, they review the information developed by the SSA FO and present appropriate cases to the U.S. Attorney who then makes the decision whether or not to prosecute. While the OIG has assured us they do not have a dollar threshold in attempting to present the case to the U.S. Attorney, we believe that it is unlikely that the U.S. Attorney could be persuaded to prosecute a case unless it involves a significant amount of money or contains some other compelling reason to do so. However, the U.S. Attorney’s decision to prosecute has no bearing on SSA’s responsibility to complete its actions on such a case.

If SSA makes a misuse determination, staff records the misuse information in the RPS. Thereafter, the misuse information will be displayed anytime a future application is filed by the payee or a representative payee

query is requested. (More information about this is included in the answer to question 18, under RPS section, below.)

With the passage of the Social Security Protection Act of 2004, we now have additional tools to make beneficiaries whole in cases of misuse and can use our overpayment procedures to recover funds from misuser payees. These administrative actions can be imposed whether or not the case is taken by the U.S. Attorney for criminal prosecution.

13. What is SSA’s view as to its current legal obligations to conduct annual accounting?

SSA is required by law [sections 205(j)(3)(A) and 1631(2)(C) of the Act] to conduct annual accounting for all representative payees except for those payees who are participants in the triennial onsite review program. While we believe the law was well-intended, to afford protections to all of our clients, it requires that SSA conduct annual accountings on nearly 7 million beneficiaries each year, regardless of the relationship, custody arrangements, benefit amount or any other case characteristic. The sheer volume of required annual accountings creates an extremely large administrative burden and prevents SSA from being able to develop an in-depth review of a smaller population of possible higher risk payees.

We look forward to seeing the analysis and conclusions from your study in this regard and any recommendations you may offer that will streamline our current accounting process while protecting our beneficiaries.

14. What leeway does SSA feel it has to modify the form, periodicity, or extent of the accounting?

To be compliant with the law, the payee reporting must be conducted annually and provide sufficient information to allow SSA to judge whether expenditure of Social Security funds is in the best interest of the beneficiary. The existing payee report forms are designed to elicit that information. SSA may modify the report forms as long as the desired goal of ensuring that funds are used in the best interest of the beneficiary is met. Any changes to the report forms must be approved by the Office of Management and Budget.

However, any suggestions on how to revise the accounting forms within the meaning of the law would be welcome.

15. What can SSA do about nonreporting representative payees? Does SSA have any information on how it is enforcing this requirement?

SSA makes multiple attempts to obtain the required reports. These attempts may include additional mail requests, telephone contacts and redirecting the beneficiary’s payment checks to a local field office to force the payee into the office so that annual reporting can be obtained. If all such efforts fail, SSA typically initiates a payee change. SSA does not track the number of payee changes made as a result of the failure to obtain a report after subsequent development efforts.

We understand that a significant number of the nonresponders are parents with custody of their own children and we believe that many do not respond because they believe we are being intrusive. For most of those cases, our experience has shown that it is not in the best interests of the child to remove the custodial parent as payee and replace them with another payee. We look forward to any analysis in the study with regard to whether nonresponders are more likely to misuse, and any suggestions you have on this subject.

16. It has been suggested that the POMS needs to have information and guidance on how to handle difficult situations, like homeless beneficiaries, feuding family members, payees skimming off payments, payees not responding to attempts to contact them, and beneficiaries not wanting a payee when the staff thinks one is needed. Is SSA actively addressing these issues and if so, when will the new POMS be issued?

The POMS provides a wide variety of policy principles and instructions, and attempts to cover most subject areas. The technicians need to use information contained in the POMS and use their own judgment and expertise to resolve the problems or issues presented to them in each particular case. It would be impossible to cover by written instruction every conceivable situation the field will run into given the size and diversity of this population. However, the POMS does address most of the issues in your question as indicated below:

• “Payees skimming off payments” is misuse and is covered in GN 00604.

• “Payees not responding” is covered in GN 00605.

• “Beneficiaries not wanting a payee when SSA determines one is needed” is covered in GN 00504 and GN 00503.

All POMS sections are updated to provide clarifications and legislative changes as needed. Prior to publication, POMS are sent to all our regions

for review and comment. Any areas that need additional clarification are brought to our attention at that time. In addition, whenever our regional contacts present ideas or suggestions to improve the POMS, we consider those ideas and issue changes as needed. If NAS has any particular suggestions for POMS enhancements, we welcome their input.

17. We were told that some offices are not using the RPS or that they do not follow all procedures in checking/entering data into the RPS. Do you have any information on this claim? What are the office directors’ responsibilities in this regard?

SSA policy states that, whenever possible, representative payee applications should be taken via the RPS as the RPS provides online safeguards. We believe that, generally, our field office components process representative payee applications cases via the RPS as instructed; however, we know that many technicians in the field have expressed frustration with the RPS saying that it is too rigid, cumbersome and error-prone. We also know that there are a significant number of cases missing from the RPS. Bypassing the RPS is of great concern to us because it prevents SSA from affording protections as designed. Because some rep payee applications cannot be taken in the RPS (undocumented alien parent payee without an SSN), we had to have processes in place so these cases could be processed outside of the RPS, a situation which also allows abuses to occur. Field office managers are ultimately responsible for the work performed by their employees.

While this creates a severe integrity issue for the representative payee program because the database is supposed to contain a record of all payees, implementing necessary systems changes is slow due to an antiquated database structure, resource constraints and other competing agency priorities.

18. Does the RPS allow for a notation that the representative payee “may” be a misuser, or tends to be unresponsive to staff attempts to contact him or her? Is there any impediment to allowing this?

If misuse is suspected, we must develop fully to make a determination whether the misuse actually occurred. Misuse is defined as “any case in which a representative payee converts the benefits for purposes other than the use and benefit of the beneficiary.”

Once a misuse determination is made, RPS has a Representative Payee Misuse Information (RMIS) screen to record misuse information. This screen collects data about each misuse event and whether funds were re-

imbursed. We stress the importance of posting misuse information to RPS since this data will be displayed anytime a future application is filed by the payee or representative payee query is requested. We have included procedures in POMS for documenting misuse to the RPS.

RPS also has a Representative Payee Special Text (RPST) screen to house information that may be useful about the representative payee. This is a free-format screen and can be used for various events and could be used to document a payee who is unresponsive or who displays other indicators of potentially poor performance. It will be displayed anytime a future application is filed by the payee or a representative payee query is requested.

The RPS itself does not compile characteristics of payees and determine or note that someone is more likely to be a misuser. We look forward to your analysis of the common characteristics of a misuser so we can consider changes to the RPS or the accounting program.

19. How do staff suggestions for changes to the RPS filter upwards to headquarters? Our perception from talking to field staff is that ideas, such as “may be a misuser indicator,” are stifled and no longer passed upwards.

Generally, we receive suggestions in one of two ways, either through our employee suggestion program or informally through our regional office staff. We want to make the representative payee process as easy and productive for the field offices as possible, so we welcome feedback on areas that need improvement. The agency encourages the employee suggestion program and we thoroughly consider all that are received. However, many suggestions are turned down because they do not provide sufficient benefits or savings to support the costs of implementing the change. In addition, due to limited systems resources, only a small number of systems changes are implemented each year within SSA.

20. Are there plans to upgrade the RPS to at least a Windows-based environment and to reduce the data entry duplication that field staff complain about and use as an excuse for not always using the system to its fullest potential?

Planning and analysis will start on upgrading the RPS to a more effective system later in FY 07 (from the current IDMS platform to a DB2 database). We do not know if funding will be available in order to implement this change but work has begun to identify the business process and some of the enhancements that should be incorporated.