Social Security Provisions in the American Recovery and Reinvestment Act of 2009: Supplemental Appropriations, Economic Recovery Payments, and Tax Credits for Certain Government Retirees

Social Security Provisions in the American Recovery and Reinvestment Act of 2009: Supplemental Appropriations, Economic Recovery Payments, and Tax Credits for Certain Government Retirees

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Social Security Provisions in the American
Recovery and Reinvestment Act of 2009:
Supplemental Appropriations, Economic
Recovery Payments, and Tax Credits for
Certain Government Retirees
Scott Szymendera
Analyst in Disability Policy
November 19, 2009
Congressional Research Service
7-5700
www.crs.gov
R40188
CRS Report for Congress
P
repared for Members and Committees of Congress

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Social Security Provisions in the American Recovery and Reinvestment Act of 2009

Summary
The American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5) provides more than
$1 billion in supplemental appropriations to the Social Security Administration (SSA) for
administrative functions, a one-time $250 payment to all Supplemental Security Income (SSI)
recipients and adult Social Security beneficiaries, and a $250 refundable tax credit to certain
government retirees.
Of the more than $1 billion appropriated to the SSA for administrative functions, $500 million is
to replace the agency’s National Computer Center and $500 million is to be spent on processing
Social Security retirement and disability cases with up to $40 million of this amount available for
health information technology research and activities. In addition, the SSA Inspector General (IG)
is appropriated $2 million to provide audit and oversight of SSA activities funded by the act.
Every SSI recipient and adult Social Security beneficiary will receive a one-time economic
recovery payment of $250 under this act and certain federal, state, and local government retirees
who are not eligible for the recovery payment will receive a $250 refundable tax credit.

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Social Security Provisions in the American Recovery and Reinvestment Act of 2009

Contents
Introduction ................................................................................................................................ 1
Supplemental Appropriations to the SSA for Administrative Functions ........................................ 1
Total Funding........................................................................................................................ 1
Economic Recovery Payments to SSI recipients and Social Security Beneficiaries ...................... 2
Eligibility for Economic Recovery Payments ........................................................................ 2
Order and Administration of Payments .................................................................................. 3
Residency Requirement......................................................................................................... 3
Limited Applicability to Retroactive Benefits ........................................................................ 4
Assignment and Offset of Benefits ........................................................................................ 4
Treatment of Economic Recovery Payments by Other Means-Tested Programs and
for the Purposes of Taxation ............................................................................................... 4
Number and Cost of Economic Recovery Payments .............................................................. 4
Special Tax Credit for Certain Government Retirees.................................................................... 5
Treatment of the Government Retiree Tax Credit by Means-Tested Programs ........................ 5
Legislation to Extend the Economic Recovery Payment Provision of the ARRA.......................... 6

Tables
Table 1. Summary of Supplemental Appropriations to the SSA for Administrative
Functions in the American Recovery and Reinvestment Act of 2009 (ARRA)........................... 2
Table 2. Number and Cost of One-Time Economic Recovery Payments to SSA, RRB, and
VA Beneficiaries ...................................................................................................................... 5

Contacts
Author Contact Information ........................................................................................................ 6
Acknowledgment ........................................................................................................................ 6
Key Policy Staff.......................................................................................................................... 6

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Social Security Provisions in the American Recovery and Reinvestment Act of 2009

Introduction
The American Recovery and Reinvestment Act (ARRA; P.L. 111-5 ) provides more than $1
billion to the Social Security Administration (SSA) for improvements to administration functions
as well as funding for a one-time economic recovery payment of $250 to all Supplemental
Security Income (SSI) recipients, adult Social Security beneficiaries, adult Railroad Retirement
and disability beneficiaries, and veterans compensation and pension beneficiaries.1 The ARRA
also provides for a one-time $250 refundable tax credit for federal, state, and local government
retirees who do not otherwise qualify for economic recovery payments.
Supplemental Appropriations to the SSA for
Administrative Functions
Total Funding
The ARRA provides more than $1 billion to the SSA for administrative functions. These
supplemental appropriations are made to the SSA’s Limitation on Administrative Expenses (LAE)
account and to the SSA Inspector General (IG).2
New SSA National Computer Center
The ARRA provides $500 million for the replacement of the SSA’s National Computer Center
and the information technology costs associated with this center.
Processing of Retirement and Disability Workloads
The ARRA provides $500 million to the SSA for the processing of Social Security retirement and
disability workloads.
Health Information Technology Research and Activities
The ARRA provides that up to $40 million of the $500 million appropriated to the SSA for
processing retirement and disability workloads may be spent on health information technology
research and activities, including SSI cooperative research and demonstration projects, to
facilitate the use of electronic medical records for disability claims.

1 This report focuses only on payments to SSI recipients and Social Security beneficiaries.
2 For additional information on the administrative budget of the SSA, see CRS Report RS22677, Social Security
Administration: Administrative Budget Issues, by Christine Scott.
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Social Security Provisions in the American Recovery and Reinvestment Act of 2009

Inspector General
The ARRA appropriates $2 million for the SSA Inspector General (IG). This funding is to remain
available until September 30, 2012, and is to be used by the SSA IG to audit and provide
oversight of SSA activities funded as part of the act.
Table 1. Summary of Supplemental Appropriations to the SSA for Administrative
Functions in the American Recovery and Reinvestment Act of 2009 (ARRA)
(in millions of dollars)
Activity Appropriation
New SSA National Computer Center
500
Processing of Retirement and Disability Workloads
500
Health Information Technology Research and Activities
—a
SSA Inspector General
2
Administrative Costs Associated with One-Time Payments
90
Total
1,092
Source: Congressional Research Service (CRS).
a. The ARRA provides that up to $40 million of the $500 million appropriated for the processing of
retirement and disability workloads may be used for health information technology research and activities.
Economic Recovery Payments to SSI recipients and
Social Security Beneficiaries
Section 2201 of Division B of the ARRA provides for a one-time economic recovery payment of
$250 to all SSI recipients and adult Social Security retirement and disability beneficiaries.3 This
payment is to be made by the Department of the Treasury at the “earliest practicable date,” but
not more than 120 days after enactment of the act.
Eligibility for Economic Recovery Payments
To be eligible for the one-time economic recovery payment provided by the ARRA, a person
must fall into one of the following categories:
1. The person must have been entitled to a cash benefit, other than a personal needs
allowance, under the SSI program for at least one month during November or
December 2008 or January 2009;
2. The person must have been entitled to one of the following types of Social
Security benefits for at least one month during the three-month period that ends

3 These economic recovery payments are also available to adult Railroad Retirement and disability beneficiaries and
veterans compensation and pension beneficiaries.
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Social Security Provisions in the American Recovery and Reinvestment Act of 2009

with the month prior to the month in which the act containing the provision is
enacted:
• Old-age (retirement) benefits;
• Disability insurance (SSDI) benefits;4
• Husband’s or Wife’s insurance benefits;
• Child’s insurance benefits based on a disability that began before the age of
22;
• Widow’s or Widower’s insurance benefits;5
• Mother’s, Father’s, and Parent’s insurance benefits;
• Benefits based on transitional insured status as provided by Section 227 of
the Social Security Act; or
• Benefits for certain uninsured persons age 72 or older as provided by Section
228 of the Social Security Act.
Limitations on Eligibility
No person may receive a recovery payment if his or her SSI or Social Security benefits are
suspended because of his or her status as a prisoner, public institution inmate, parole or probation
violator, fugitive, or illegal alien or if his or her benefits have been suspended because of fraud.
No person may receive more than one payment, even if he or she is eligible under multiple
categories.
Order and Administration of Payments
All Supplemental Security Income (SSI) recipients, adult Social Security beneficiaries, adult
Railroad Retirement and disability beneficiaries, and veterans compensation and pension
beneficiaries are entitled to one $250 payment, regardless of their participation in more than one
of these programs. The SSA administers the payment to any recipient who receives SSI or Social
Security along with veterans or Railroad benefits. Veterans beneficiaries who also receive
benefits from the Railroad Retirement or disability program will receive their recovery payment
through the Railroad Retirement Board (RRB).
Residency Requirement
The ARRA requires that to receive an economic recovery payment, a person must be a resident of
the United States or its territories.

4 For additional information on SSDI benefits, see CRS Report RL32279, Primer on Disability Benefits: Social
Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), by Scott Szymendera.
5 For additional information on Social Security Widow’s or Widower’s benefits, see CRS Report RS22294, Social
Security Survivors Benefits, by Kathleen Romig and Scott Szymendera.
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Social Security Provisions in the American Recovery and Reinvestment Act of 2009

Limited Applicability to Retroactive Benefits
The ARRA limits the eligibility of SSI recipients and Social Security beneficiaries who are
awarded benefits after the date of the recovery payment but who are eligible for benefits
retroactive to the three-month period before the enactment of the act. No recovery payment may
be made for any reason after December 31, 2010, thus limiting eligibility to those who are
awarded SSI or Social Security benefits before that date.
Assignment and Offset of Benefits
The ARRA provides that the non-assignment clause of the Social Security Act applies to
economic recovery payments. 6 Economic recovery payments may, however, be subject to an
offset to collect delinquent debts owed to the U.S. government.
The amount of a person’s “Making Work Pay” tax credit provided by Section 1001 of Division B
of the ARRA is reduced by the value of any economic recovery payment he or she receives.
Treatment of Economic Recovery Payments by Other Means-Tested
Programs and for the Purposes of Taxation
The ARRA provides that the amount of the economic recovery payment may not be treated as
income, or as a resource for the month of receipt and the following nine months, for the purpose
of determining any individual’s eligibility for or the amount of benefits or assistance from any
federal, state, or local government program funded entirely or in part with federal funds. The
economic recovery payment is not considered income for the purpose of taxation.7
Number and Cost of Economic Recovery Payments
As of September 25, 2009, nearly 54.7 million economic recovery payments, totaling more than
$13.6 billion, were issued by the SSA, Department of Veterans Affairs (VA), and the RRB.
Table 2 provides information of each agency’s total number and amount of economic recovery
payments as of September 25, 2009.

6 Sections 207 and 1631(d)(1) of the Social Security Act [42 U.S.C. §§ 407 and 1383(d)(1)]. With limited exception,
benefits paid under Titles II and XVI of the Social Security Act may not be subject to assignment, attachment,
garnishment, levy or any other legal process.
7 For additional information on the taxation of Social Security benefits see CRS Report RL32552, Social Security:
Calculation and History of Taxing Benefits, by Janemarie Mulvey and Christine Scott.
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Social Security Provisions in the American Recovery and Reinvestment Act of 2009

Table 2. Number and Cost of One-Time Economic Recovery Payments to SSA, RRB,
and VA Beneficiaries
(as of September 25, 2009)
Administering Agency
Number of Payments
Total Amount of Payments
Social Security Administration (SSA)
52,317,454
$13,079,363,521a
Railroad Retirement Board (RRB)
518,187
$129,546,750
Department of Veterans Affairs (VA)
1,859,437
$464,859,250
Total 54,695,078
$13,673,769,521
Source: Congressional Research Service (CRS) table. Data taken from Financial and Activity Reports filed on
September 25, 2009, by the SSA, RRB, and VA and available at http://www.recovery.gov.
a. A total of 52,479,057 payments were administered by the SSA for a total of $13,119,764,250. Data in the
table includes returned or cancel ed payments; 161,898 payments, which total $40,473,876.95, were fully or
partially cancelled or returned as a result of money owed to the federal government. An additional 542
payments, which total $135,500, were returned by the individual recipients through personal checks or
money orders. Further discrepancies can be explained by accounting and timing differences on the part of
the SSA.
Special Tax Credit for Certain Government Retirees
Section 2202 of Division B of the ARRA provides for a one-time $250 refundable tax credit for
certain government retirees who are not eligible for the economic recovery payment. To be an
eligible individual, a person must have received in 2009 any pension or annuity payment for
service performed for the federal government or any state, or local government, and must not
have received an economic recovery payment. For example, this tax credit is available to federal
government retirees who worked under the Civil Service Retirement System (CSRS) and did not
pay into the Social Security system as well as state and local government retirees who were not
covered by Social Security.
To be eligible to receive this tax credit, a retiree must file a tax return for tax year 2009. The
Internal Revenue Service (IRS) has not yet published instructions on how tax filers may claim
this tax credit when they file their 2009 income taxes.
Treatment of the Government Retiree Tax Credit by Means-Tested
Programs
The ARRA provides that for the month of receipt and the following two months, any credit or
refund that the recipient is issued as a result of the government retiree tax credit will not be
counted as income or resources for the purposes of determining any person’s eligibility for or
amount of, any means tested benefits provided by any federal or federally funded program.
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Social Security Provisions in the American Recovery and Reinvestment Act of 2009

Legislation to Extend the Economic Recovery
Payment Provision of the ARRA
In the 111th Congress, the following four bills have been introduced that would, if enacted, extend
the economic recovery payment provision of the ARRA and allow eligible SSI recipients, adult
Social Security and Railroad Retirement and disability beneficiaries, and veterans compensation
and pension beneficiaries to receive an economic recovery payment in 2010:
• S. 1685, the Emergency Senior Citizens Relief Act of 2009, introduced by
Senator Bernard Sanders of Vermont;
• H.R. 3597 and H.R. 3810, the Emergency Senior Citizens Relief Acts of 2009,
introduced by Representative Peter DeFazio of Oregon; and
• H.R. 3691, the Seniors and Veterans Economic Stimulus Act of 2009, introduced
by Representative Ginny Brown-Waite of Florida.
The extensions proposed by these bills would apply to new beneficiaries well as beneficiaries
who received economic recovery payments under the ARRA.

Author Contact Information

Scott Szymendera

Analyst in Disability Policy
sszymendera@crs.loc.gov, 7-0014

Acknowledgment
Research assistance for this report was provided by Robert Valenti. All questions should be addressed to
the key policy staff listed below.
Key Policy Staff
Area of Expertise
Name
Phone
E-mail
Proposed supplemental appropriations
Scott Szymendera
x7-0014
sszymendera@crs.loc.gov
to the SSA and proposed one-time
payment to SSI recipients and Social
Security beneficiaries
Health information technology
C. Stephen Redhead
x7-2261
credhead@crs.loc.gov
research and activities

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