2015 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 2014, 1.9 million individuals applied for SSI benefits based on blindness or disability, a decrease of 8 percent from 2013. Additionally, 142 thousand individuals applied for SSI benefits based on age, a decrease of 4 percent as compared to the 148 thousand who applied in 2013. In 2014, 812 thousand applicants became new recipients of SSI benefits, a decrease of 11 percent as compared to the 918 thousand who became new recipients in 2013.

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Each month on average during calendar year 2014, 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 0.9 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 2014 totaled $54.2 billion, up from $53.4 billion in 2013.

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Each month on average during calendar year 2014, 2.1 million individuals received federally administered State supplementation payments. This group was composed of 0.5 million aged recipients, 1.5 million disabled recipients, and fewer than 25 thousand blind recipients. During calendar year 2014, 2.4 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 $3.3 billion in calendar year 2014, which was roughly the same level as in 2013.

•	The percentage of SSI recipients receiving their benefits electronically increased from 94 percent in fiscal year 2013 to 95 percent in fiscal year 2014.

•	The cost of administering the SSI program in fiscal year 2014 was $4.1 billion, which was roughly 7 percent of total federally administered SSI expenditures.

•	In January 2015, 8.3 million individuals received federally administered monthly SSI benefits averaging $541. 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 2014 Annual Report

Since we submitted the 2014 Annual Report of the Supplemental Security Income Program to the President and Congress on August 22, 2014, the following legislative changes have been made to the SSI program:

Public Law 113-295, enacted December 19, 2014

Modifies the Internal Revenue Code to define a type of tax-advantaged account in which money can be saved for the benefit of certain individuals who became disabled prior to age 26. The first $100,000 of the balance of an “ABLE” account and distributions from the account to pay for qualifying disability expenses, with the exception of distributions for housing, do not affect the disabled person’s SSI eligibility and payment amount. Additionally, if the amount in excess of $100,000 in an SSI recipient’s ABLE account causes him or her to exceed the SSI resource limit, then his or her monthly cash benefits are suspended, but he or she keeps eligibility for Medicaid.

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 million 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 important 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 the correct payment 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 2015 Budget, we expect to complete 2.255 million SSI redeterminations in this fiscal year. The President's proposed FY 2016 Budget would provide funding sufficient to complete 2.622 million SSI redeterminations in FY 2016.¹ Our estimates indicate that those FY 2016 redeterminations would yield about $4 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) 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 are currently developing 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. We are currently analyzing the effectiveness and efficiency of this method to help determine whether and how to use it in the future.

In addition, we are investigating opportunities to improve SSI program integrity by leveraging our modern computer processing capabilities along with data available through the private market. For example, some private companies collect and sell wage data that are more detailed and timely than the data currently available to us through our existing computer exchanges with other Federal agencies. An automated exchange with such a company—whereby we compare the company's wage data to the wage data in our records, correct discrepancies, and adjust SSI benefits accordingly—would help prevent improper payments and conserve employee time. Because current law prohibits such an exchange, the President's FY 2016 Budget includes a legislative proposal that would authorize us to enter into secure automated data exchanges with private organizations while preserving important due process protections for recipients.

Another proposal in the President's FY 2016 Budget that could reduce improper payments due to wage reporting practices would be moving from the current Annual Wage Reporting process to a Quarterly Wage Reporting process for employers. One of our SSI program integrity efforts is to match wage information from employers against our SSI program records to uncover wages earned by recipients or deemors. Quarterly reporting will 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 in the President's FY 2016 Budget described above relating to program integrity, the President's 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 2016 and 2017.

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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 from a third party with interest if the third party 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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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 programs 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 program integrity by requiring states, local governments, and private insurers that administer Workers' Compensation and Public Disability Benefits to provide this information to SSA. Furthermore, would provide for the development and implementation of a system to collect such information from states, local governments, and insurers.

•	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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Reauthorize and Expand Demonstration Authority for DI and SSI—This proposal would provide SSA and partner agencies $50 million in discretionary funding for early intervention demonstrations in FY 2016, as well as $350 million for mandatory funding in FYs 2017-2020, to test innovative strategies to help people with disabilities remain in the workforce.

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.

For example, the Social Security Disability Insurance (DI) program will require changes to avoid the projected reserve depletion around the end of 2016. These necessary changes might have implications for payment levels and eligibility under the SSI program.

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 2039, 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 2.51 in 2014 to 2.33 percent of the population by 2039.

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We estimate that Federal expenditures for SSI payments in calendar year 2015 will increase by $1.0 billion to $55.2 billion, an increase of 1.9 percent from 2014 levels. In dollars adjusted by the Consumer Price Index to 2015 levels, we pro­ject that SSI program outlays will increase to $60.8 billion in 2039, a real increase of 0.5 percent per year.

•	Federal SSI expenditures were 0.31 percent of Gross Domestic Product (GDP) in 2014. We project that such expenditures will decrease to 0.30 percent of GDP in 2015, and continue to decline thereafter to 0.21 percent of GDP by 2039.

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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. For more details about the President's FY 2016 proposal relating to redeterminations and Continuing Disability reviews, please see page 17 of http://ssa.gov/budget/FY16Files/2016BO.pdf.