No: 108-18R
Date: March 4, 2004

President Signs into Law H.R. 743, the Social Security Protection Act of 2004

On March 2, 2004, President Bush signed into law H.R. 743, the Social Security Protection Act of 2004 (Public Law 108-203).

The following descriptions of provisions in the bill are identical to the descriptions in Legislative Bulletin 108-17.

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.
  • Would define "misuse" as when a representative payee converts benefits for use other than for the beneficiary.
  • Would exclude reissued benefits from resources under SSI for 9 months.
  • 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 (except as noted above).

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 a 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 13th 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 up to $8.5 million to the Commissioner to conduct statistically valid surveys to determine how payments made to representative payees are being used on behalf of OASDI and SSI beneficiaries. 
  • Would require the Commissioner to submit a report on the survey to the House Ways and Means and Senate Finance Committees no later than 18 months after enactment.
  • 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 also authorize SSA to impose administrative sanctions for the above offense.

  • 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 of 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 after conviction 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 require the Commissioner to apply the good cause exception if a court of competent jurisdiction finds the person not guilty, charges are dismissed, a warrant for arrest is vacated, or there are similar exonerating circumstances identified by the court. The Commissioner would also apply the good cause exception if the individual establishes to the satisfaction of the Commissioner that he or she was the victim of identity fraud and the warrant was issued on such basis.
  • Would provide that the Commissioner may apply the good cause exception if the criminal offense was non-violent and not drug-related, and in the case of probation or parole violators, both the violation and the underlying offense were non-violent and not drug-related. In such cases, the Commissioner may establish good cause based on mitigating factors. 
  • Would also provide, if not in violation of Federal or State law and upon written request, 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 program. 
  • Would be effective upon enactment.

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

  • Would impose penalties for any attempt to intimidate or impede (by force or threats of force) any officer, employee, or contractor of the United States acting in an official capacity under the Social Security Act and for any effort to otherwise obstruct or impede the administration of the Social Security Act.  Upon conviction of the use of force, the maximum penalties would be $5,000 and/or 3-years imprisonment.  Upon conviction of the use of threat, but not force, the maximum penalties would be no more than $3,000 and/or one-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 provide that restitution funds received would be deposited to the trust funds or general fund of the Treasury, as appropriate.
  • Would be effective with respect to violations occurring on or after enactment.

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 with respect to overpayments that are outstanding at the time of enactment.

Prohibit Benefits to Persons Not Authorized to Work in the

United States

  • Would provide that the payment of Title II benefits based on the earnings of any noncitizen would be precluded unless (1) the noncitizen had ever been issued an SSN indicating authorization to work in the United States, or (2) the noncitizen, at the time any quarters of coverage are earned, was admitted to the United States under a B1 visa (for business purposes) or D visa (crew member--e.g., for an airline).
  • Would be effective with respect to Social Security numbers issued 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.

Temporary Extension of Attorney Fee Payment System to Title XVI Claims

  • Would extend the current Title II attorney fee withholding process to Title XVI for a period of five years. 
  • 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.
  • Assessments would be deposited as miscellaneous receipts in the Treasury's general funds and would be available for obligation only as appropriated.
  • Would be effective with respect to fees that are first required to be certified or paid on or after the date the Commissioner submits to Congress written notice of full implementation of the requirements for operation of the demonstration project under section 303 of the Social Security Act.

Nationwide Demonstration Project Providing for Extension of Fee Withholding Procedures to Non-Attorney Representatives

  • Would authorize a demonstration project to allow non-attorneys the option of fee withholding under both Title II and Title XVI for 5 years.
  • Would require that non-attorney representatives to meet at least the following pre-requisites: hold a bachelor's degree, pass an examination written and administered by the Commissioner, secure professional liability insurance or the equivalent, undergo a criminal background check, and complete continuing education courses. 
  • Would allow the Commissioner to charge a reasonable fee to cover the costs of administering the prerequisites.

  • Would cap the assessment for SSA processing non-attorney fees at $75 or 6.3% of the fee, whichever is lower.
  • Would adjust cap based on annual COLA's rounded down to next lower $1.
  • Assessments would be deposited in the Treasury's general funds as miscellaneous receipts or in the OASDI funds as determined appropriate by the Commissioner and would be available for obligation only as appropriated.
  • Would require the Commissioner to take the actions needed to fully implement the project and report these actions to Congress no later than one year after enactment; and thereafter to submit annual interim reports on the progress of the demonstration and a final report after the conclusion.

GAO Study Regarding the Fee Payment Process for Claimant Representatives

  • Would require the General Accounting Office to study the results of extending fee withholding to Title XVI and to non-attorneys under both Title II and Title XVI.
  • Would require GAO to provide a comprehensive overview of the appointment and payment of claimant representatives.  Report is to include a survey of all representatives and compare outcomes by the type of representative.
  • Report would be due no later than 3 years after date of enactment.

Application of Demonstration Authority Sunset Date to New Projects

  • Would extend the demonstration authority through December 18, 2005, and would allow projects initiated by December 17, 2005 to be completed thereafter.  The current authority expires on 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 Benefits Planning, Assistance, and Outreach (BPAO) services and Protection and Advocacy (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, including the annual and interim reports issued, effectiveness of program activities, and any recommended changes.
  • The report would be due no later than one year after the date of enactment.

Reauthorization of Appropriations for Certain Work Incentives Programs

  • Would extend the authorization to provide appropriate funding for the BPAO program and the State P&A systems established by the Ticket to Work Act through fiscal year 2009.

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 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 and Secretary of Homeland Security 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 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 in Kentucky and Louisiana

  • Would extend the authority to establish a divided retirement system to Kentucky and Louisiana.
  • Would be effective on January 1, 2003.

Compensation for the Social Security Advisory Board

  • Would establish compensation for Social Security Advisory Board members at the daily rate of basic pay for level IV of the 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 60 months (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, the change would not apply to applications filed after the month of enactment if the worker's last day of government employment occurs before July 1, 2004.
  • In addition, provides for a transition for workers whose last day of government employment occurs within 5 years after the date of enactment.  For those workers, requirement for the 60 consecutive months of covered employment shall be reduced (but not to less than one month) by the number of months in aggregate the worker had in covered government service under the same retirement system before the date of enactment.  If the 60-month period is reduced, the months of service needed to fulfill this requirement must be performed after the date of enactment.

Disclosure to Workers of Effect of Windfall Elimination Provision and Government Pension Offset Provision

  • Would require SSA to send a modified Social Security Statement to non-covered employees that describes the potential benefit reductions that may result from the receipt of a Federal, State, or local government pension based on employment that is not subject to Social Security payroll taxes.  Would be effective for statements issued on or after January 1, 2007.
  • Would also require government employers to notify non-covered employees hired on or after January 1, 2005, of the potential effect of non-covered work on their Social Security benefits.

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 wage credits for 2000 and 2001 and make conforming amendments to reflect the termination of deemed military wage credits. 
  • Would be effective no later than July 1, 2004.

Elimination of Disincentive to Return-To-Work for Childhood Disability Beneficiaries

  • Would allow re-entitlement to childhood disability benefits after the existing 7-year re-entitlement period if the beneficiary's previous entitlement had terminated because disability ceased due to the performance of substantial gainful activity.
  • Would be effective with respect to benefits payable for months beginning with the seventh month that begins after the date of the 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 31, 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.

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 would be eligible for the exclusion. 
  • Would be effective for benefits payable beginning 1 year after 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 after 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 whose eligibility is established prior to their going 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 that begin more than 90 days after the date of enactment.