[Congressional Record Volume 146, Number 50 (Thursday, April 27, 2000)]
[Senate]
[Page S3024]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself and Mr. Breaux):
  S. 2477. A bill to amend the Social Security Act to provide 
additional safeguards for beneficiaries with representative payees 
under the Old-Age, Survivors, and Disability Insurance program or the 
Supplemental Security Income program; to the Committee on Finance.


              SOCIAL SECURITY BENEFICIARIES PROTECTION ACT

  Mr. GRASSLEY. Mr. President, I rise today to introduce legislation 
which would make Social Security beneficiaries, who had their benefits 
misused by organizational representative payees, whole. While most 
people receive their Social Security and Supplemental Security Income 
benefit payments directly, others must have assistance in money 
management. Benefits, totaling over $25 billion, to these people are 
paid through representative payees who receive and manage the payments 
on behalf of the beneficiaries. Representative payee responsibilities 
include, but are not limited to, frequently monitoring the 
beneficiary's current well-being for food, shelter, clothing, medical 
care, and personal needs; informing the Social Security Administration 
of changes in the representative payee's own circumstances that would 
affect the performance of representative payee services; reporting 
events to the Social Security Administration that may affect the 
beneficiary's entitlement or amount of benefits; and submitting an 
annual accounting to SSA reporting about benefits received, used, and 
conserved.
  Currently, about 6.5 million Social Security and Supplemental 
Security Income program beneficiaries rely on representative payees to 
manage their monthly benefits. SSA usually looks for a payee among the 
beneficiary's family and friends. For others, those traditional 
networks of support are not available, and SSA relies on state, local, 
or community sources to fill the need. Family members serve as 
representative payees for about 88 percent of the beneficiaries 
requiring them. 45,050 organizations, such as institutions, government 
agencies, financial organizations, and qualified fee-for-service 
organizations, serve as payees for the other 12 percent, totaling 
750,570 beneficiaries.
  As Chairman of the Special Committee on Aging, I am especially 
concerned about the 795,060 beneficiaries, age 62 and over, who are 
served by representative payees. With the retirement of the baby boomer 
generation on the horizon, the number of institutions, such as nursing 
homes, serving as payees stands to increase dramatically. Therefore, 
addressing this matter now is all the more urgent.
  The majority of representative payees provide much-needed help to 
beneficiaries without abusing this responsibility. A minority of payees 
misuse their position. SSA's Office of the Inspector General (OIG) has 
recently investigated several instances of misuse by organizational 
representative payees. One such investigation served as the subject of 
a recent ``20/20'' television news program segment. In this segment, 
several elderly Social Security beneficiaries accused Greg Gamble, of 
the Aurora Foundation, a former organizational payee, of using their 
benefits for his own purposes. On March 14, 2000, Mr. Gamble entered a 
guilty plea in federal court of embezzlement of Social Security funds. 
As part of the plea agreement, Mr. Gamble agreed to make restitution to 
SSA in the amount of $303,314.00. Although this is only one example of 
misuse, SSA's OIG has just begun investigating several instances of 
misuse. Since FY 1998, it has identified about $8 million in SSA 
representative payee fraud loss. SSA's OIG expects the number of misuse 
cases to increase as SSA increases its review of organizational 
representative payee records.

  When any payee has been determined to have misused an individual's 
benefits, SSA reassigns another payee to the beneficiary. 
Unfortunately, SSA can reissue the benefits only in cases where 
negligent failure on SSA's part to investigate or monitor the payee 
resulted in the misuse. In virtually all other cases, the individual 
loses his or her funds unless SSA can obtain restitution, through civil 
processes, of the misused benefits from the payee. If SSA is able to 
recover the misused amount, it may take years to do so. In the 
meantime, the beneficiary has lost the amount misused and may be 
temporarily inconvenienced, by not having money to pay rent, utilities, 
or food, until a new payee is assigned.
  In order to prevent misuse of benefits in the future, and to provide 
better accountability of benefits to beneficiaries, I am introducing 
the ``Social Security Beneficiaries Protection Act,'' along with my co-
sponsor and Special Committee on Aging Ranking Member Senator Breaux. 
This bipartisan bill:
  (1) gives SSA the authority to re-issue benefits misused by 
organizational payees on its own determination (presently, benefits are 
only re-issued when a court finds that SSA negligently failed to 
investigate/monitor the payee);
  (2) requires non-governmental organizational payees to be bonded and 
licensed (presently, there is a bonding or licensing requirement);
  (3) requires fee forfeiture when payees misuse benefits;
  (4) gives SSA overpayment recovery authority for benefits misused by 
non-governmental payees; and
  (5) extends civil monetary penalty authority to SSA (of not more than 
$5,000 per violation for misuse offenses).
  I urge my fellow Senators to support Senator Breaux and me in 
ensuring that our Nation's most vulnerable citizens, senior citizens 
and the disabled, will receive every dollar of benefits to which they 
are entitled.
  I would also like to remind everyone that the Senate Special 
Committee on Aging is holding a hearing on misuse of benefits by Social 
Security organizational representative payees Tuesday, May 2, 2000, at 
10:00 a.m. in 562 Dirksen.
                                 ______