Title VIII of the Bipartisan Budget Act of 2015 (H.R. 1314, P.L. 114-74) makes several changes to the Social Security programs. Among these changes is a temporary reallocation of the Social Security payroll taxes so that a larger share is deposited in the Disability Insurance (DI) trust fund to extend the life of this trust fund beyond its current predicted exhaustion in 2016. Under this provision, the allocation of the 12.40% Social Security payroll tax assigned to the DI trust fund increases from 1.80% to 2.37% and the allocation to the Old-Age and Survivors Insurance (OASI) trust fund decreases from 10.60% to 10.03%. These changes last through 2018.
In addition, these provisions extend the Social Security Administration’s (SSA) demonstration authority for the Social Security Disability Insurance (SSDI) programs, make changes to data and earnings reporting, and increase penalties for benefit fraud.
Title VIII of the act includes the following subtitles:
Subtitle A. Ensuring Correct Payments and Reducing Fraud
Subtitle B. Promoting Opportunity for Disability Beneficiaries
Subtitle C. Protecting Social Security Benefits
Subtitle D. Relieving Administrative Burdens and Miscellaneous Provisions
Title VIII of the Bipartisan Budget Act of 2015 (H.R. 1314, P.L. 114-74) makes several changes to the Social Security programs. Among these changes is a temporary reallocation of the Social Security payroll taxes so that a larger share is deposited in the Disability Insurance (DI) trust fund to extend the life of this trust fund beyond its current predicted exhaustion in 2016. Under this provision, the allocation of the 12.40% Social Security payroll tax assigned to the DI trust fund increases from 1.80% to 2.37% and the allocation to the Old-Age and Survivors Insurance (OASI) trust fund decreases from 10.60% to 10.03%. These changes last through 2018.
In addition, these provisions extend the Social Security Administration's (SSA) demonstration authority for the Social Security Disability Insurance (SSDI) programs, make changes to data and earnings reporting, and increase penalties for benefit fraud.
Title VIII of the act includes the following subtitles:
On November 201, the President signed the Bipartisan Budget Act of 2015, P.L. 114-74. Title VIII of the act makes several changes to the Social Security system, including provisions that affect the Social Security Disability Insurance (SSDI) program.1
Section 811 of the act requires the Social Security Administration (SSA) to ensure that Cooperative Disability Investigations (CDI) units are in place to cover all 50 states, the District of Columbia, and the territories by October 1, 2022, subject to available appropriations. CDI units are partnerships between the SSA Office of the Inspector General, SSA field offices, and state and local law enforcement agencies that are designed to detect and resolve issues of disability benefit fraud before benefits are paid.2 There are currently 36 CDI units covering 31 states and Puerto Rico. Section 811 also requires the SSA to report annually to Congress on its progress in attaining nationwide CDI coverage and any areas in which it has been unable to secure the assistance of state and local law enforcement.
Section 812 of the act prohibits the SSA from considering any medical evidence provided by the following health care providers when determining disability eligibility for the SSDI or Supplemental Security Income (SSI) programs, except if good cause exists:
Section 812 also requires the SSA Inspector General and the Department of Health and Human Services (HHS) to provide SSA with information on excluded providers. Within one year of enactment, the SSA is required to issue regulations to carry out this section. This section also applies to determinations made on or after the earlier of the effective date of these regulations or one year after enactment.
Section 813 of the act makes conspiring to commit Social Security fraud by conspiring to commit the offenses specified in Sections 208(a), 811(a), and 1632(a) of the Social Security Act a felony offense.
This section also increases the maximum penalty from incarceration from 5 years to 10 years for the following persons who violate Sections 208(a), 811(a), or 1623(a) of the Social Security Act. This section also increases the maximum civil monetary penalty from $5,000 to $7,500 for the following persons who violate Section 1129(a)(1) of the Social Security Act (related to providing false or misleading evidence):
Section 813 also prohibits the payment of SSDI benefits to any person for whom a civil monetary penalty has been assessed for fraudulently concealing work activity.
Section 814 of the act provides that in cases of misuse of the symbols, emblems, or names of Social Security or Medicare in electronic communications, each dissemination, viewing, or accessing of such communications is considered a separate offense under Section 1140 of the Social Security Act.
Section 815 of the act adds costs associated with work-related continuing disability reviews, CDI units, and fraud prosecutions by U.S. Attorneys to the list of activities covered by the discretionary spending cap adjustments for SSA program integrity authorized by Section 251(b)(2)(B) of the Balanced Budget and Emergency Deficit Control Act of 1985 [2 U.S.C. §910(b)(2)(B)].
In addition, this section makes the following changes to the discretionary spending cap adjustments for SSA program integrity:
Section 821 of the act reauthorizes the SSA's authority to conduct SSDI demonstration projects, including those that waive compliance with benefit requirements, which had terminated in 2005. The authority to initiate SSDI demonstration projects will expire on December 31, 2021, and the authority to carry out such projects will expire on December 31, 2022.
Section 822 of the act specifies that SSDI demonstration projects be designed to promote attachment to the labor force.
It requires the following in the report to Congress before any SSDI demonstration project is permitted to waive compliance with benefit requirements:
Section 822 also requires that the SSA not require any person to participate in any SSDI demonstration project and requires the following:
This section also changes the date interim progress reports are due from June 9 to September 30 of each year.
Section 823 of the act requires the SSA to conduct a demonstration project, described below, during a five-year period beginning no later than January 1, 2017. This project will have the following elements:
Section 824 of the act authorizes the SSA to enter into data agreements with payroll data providers for the purposes of efficiently administering Social Security and SSI benefits and preventing improper payments. Before entering into an exchange, the SSA is required to publish notice in the Federal Register.
This section also authorizes the SSA to require each person applying for or eligible for any Social Security benefits based on disability, SSDI benefits, or SSI benefits to provide authorization for the SSA to access that person's records from a payroll data provider for the purposes of determining eligibility for benefits. Any person who provides such authorization will not be penalized if the payroll data provider provided SSA with inaccurate information or in the case of SSI if the person changes employers.
Section 824 also requires the SSA to issue regulations within one year of enactment to implement this section and provide for reduced wage reporting for persons who have authorized the SSA to access their records from payroll data providers.
This section is effective one year after enactment.
Section 825 of the act requires that for the purposes of determining if an individual is engaged in substantial gainful activity for the purposes of SSDI eligibility, the SSA consider earnings from services to have been earned:
Unless the SSA can establish based on readily-available evidence the actual month such earnings were earned or the person, after having been denied benefits due to excess earnings, can demonstrate to SSA that such earnings were actually earned in a different month.
This section is effective upon enactment or as soon as practical thereafter.
Section 826 of the act requires that by September 30, 2017, the SSA establish a system of electronic earnings reporting for any person entitled to Social Security benefits based on disability or SSDI modeled after the SSI electronic earnings reporting system.
Section 831 of the act applies the deemed filing rules to all persons, including those at or above full retirement age for Social Security benefits. Under current law, if a person is entitled to or receiving a retired-worker benefit and is also eligible for a spousal benefit, the person is deemed to have filed an application for spousal benefits if he or she is below the full retirement age. Similarly, if a person is entitled to a spousal benefit and is also eligible for a retired-worker benefit, the person is deemed to have filed an application for retired-worker benefits if he or she is below the full retirement age. As a result, the person becomes dually entitled to a retired-worker benefit and a spousal benefit, with the spousal benefit being subject to reduction under the dual entitlement rule. This section extends the deemed filing rule to persons at or above the full retirement age.
Under current law, the deemed filing process does not apply to persons who are full retirement age or older. Therefore, a person who has attained full retirement age could file for spousal benefits only and delay filing for his or her own retired-worker benefit. In this way, the person could receive spousal benefits while accruing delayed retirement credits, which increase the person's retired-worker benefit by 8% per year from full retirement age to age 70. Under this section if a person is entitled to a retired-worker benefit and is also eligible for a spousal benefit, the person is deemed to have filed an application for spousal benefits. Similarly, if a person is entitled to a spousal benefit and is also eligible for a retired-worker benefit, the person is deemed to have filed an application for retired-worker benefits. As under current law, the spousal benefit is subject to reduction under the dual entitlement rule. This provision is effective for persons who reach age 62 in 2016 or later.
Section 831 also provides that in cases in which a person who has attained full retirement age files for retired-worker benefits and requests that those benefit payments be suspended, no benefits will be payable to another person based on his or her work record, and no benefit will be payable to that person based on another person's work record during the period of benefit suspension.
Generally under current law, a person cannot claim a spousal benefit on a worker's record if the worker has not yet filed for benefits. However, if a worker has attained full retirement age, he or she could file for retired-worker benefits and request that the benefit payments be suspended. This process allows a spouse who has attained full retirement age to claim spousal benefits on the worker's record (the spouse may also choose to delay filing for his or her own retired-worker benefit in order to accrue delayed retirement credits) and allows the worker to accrue delayed retirement credits on his or her own retired-worker benefit. Under this section, if any person who has attained full-retirement age and requests that his or her benefits be suspended, no benefits are payable to a spouse or other person based on his or her work record and he or she is not entitled to benefits based on his or her spouse's or other person's work record during the period of suspension. This provision is effective for requests for benefit suspensions submitted 180 days after enactment.
Section 832 of the act requires that in all disability determinations for the purposes of determining SSDI or SSI eligibility, no determination be made unless the SSA has made every reasonable effort to ensure that in a case with a mental impairment, a qualified psychiatrist or psychologist has completed the medical review of the case and any applicable residual functional capacity assessment; and in a case with a physical impairment, a qualified physician has completed the medical review of the case and any applicable residual functional capacity assessment.
Under a pilot program currently being administered by the SSA, disability examiners in 20 states and territories may make disability determinations without a physician or psychologist having reviewed the case.4 This provision terminates this pilot and requires that all disability determinations be made after a medical review.
This section is effective for determinations made one year after enactment.
Section 833 of the act reallocates the share of the Social Security payroll tax designated for the Disability Insurance (DI) trust fund that pays SSDI benefits and administrative costs. Under current law, the combined payroll Social Security payroll tax is 12.40% of covered earnings, with half (6.20%) being paid each by the employer and worker. Under the current allocation, 10.60% is allocated to the Old Age and Survivors Insurance (OASI) trust fund and 1.80% to the DI trust fund.5 Under this section, for the period between January 1, 2016, and December 31, 2018, 10.03% of the combined payroll tax will be allocated to the OASI trust fund and 2.37% to the DI trust fund. The total payroll tax rate will not change. The intent of this reallocation is to increase the amount of money in the DI trust fund to delay its exhaustion which is currently predicted to occur in 2016.6
Section 834 of the act requires that in any case of Social Security or SSI overpayment, in determining if the recovery of such overpayment should be waived because it would defeat the purpose of the title, the SSA requires the person to provide authorization for the SSA to obtain the person's financial records from financial institutions if the SSA determines such records are necessary. If person refuses to grant such authorization, the SSA may, on that basis, refuse to grant the waiver. This section also includes provisions regarding how this process will comply with other federal financial and privacy laws.
This section is effective for determinations made three months after enactment.
Section 841 of the act requires the SSA and Office of Personnel Management (OPM) to enter into an agreement to carry out the following procedures:
This process will be subject to the following limitations:
OPM is also required to pay quarterly the SSA an amount estimated by the SSA to be equal to its costs of carrying out this section.
This section is effective for past-due SSDI benefits payable one year after enactment.
Section 842 of the act removes the requirement that the SSA make determinations of pre-1957 military wage credits every five years as the Social Security trust funds have been fully reimbursed for these credits.
Section 843 of the act adds divorced spouses of railroad workers to the list of Social Security beneficiaries whose information is transmitted electronically from the SSA to the Railroad Retirement Board for the purposes of benefit coordination. Under current law, spouses of railroad workers but not divorced spouses have their information transmitted electronically.
Section 844 of the act eliminates Sections 226(i) and 226A(c) of the Social Security Act that are obsolete.
Section 845 of the act requires SSA to make three new reports to Congress:
For each FY2016 through FY2021, SSA must report to Congress on the amounts above the discretionary spending caps spent on program integrity activities. This report must include
The SSA must annually report to Congress on work-related continuing disability reviews to determine if earnings exceed the substantial gainful activity level. This report must include
By January 1 of each year, the SSA must submit to Congress a report on the number and value of overpayments recovered or scheduled to be recovered during the previous fiscal year for Social Security and SSI respectively, including the terms and conditions of such repayments and the number and value of overpayments waived during the previous fiscal year.
Section 846 of the act requires OPM to conduct examinations for the hiring of administrative law judges upon request of the SSA with the first examination to be held no later than April 1, 2016, and other examinations to take place no later than December 31, 2022.
This section requires that such examinations take place even if a person who has taken a previous examination has filed an appeal of his or her determination if
Section 846 also provides that all costs associated with examinations requested by the SSA be paid by the SSA.
Author Contact Information
Acknowledgments
[author name scrubbed] contributed to the section of this report on the closure of unintended loopholes (Section 831 of the act).
| 1. |
For additional information on the SSDI program, see CRS Report RL32279, Primer on Disability Benefits: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), by [author name scrubbed]. |
| 2. |
For additional information on CDI units, see the website of the SSA Office of the Inspector General at http://oig.ssa.gov/cooperative-disability-investigations-cdi. |
| 3. |
Significant contributions to this section were made by [author name scrubbed]. |
| 4. |
The single decisionmaker model is currently used in Alabama, Alaska, California (Los Angeles and Los Angeles North only), Colorado, Florida, Guam, Kansas, Kentucky, Louisiana, Maine, Michigan, Missouri, Nevada, New Hampshire, New York, North Carolina, Pennsylvania, Vermont, Washington, and West Virginia. |
| 5. |
For additional information on the Social Security trust funds and payroll taxes, see CRS Report RL33028, Social Security: The Trust Funds, by [author name scrubbed]. |
| 6. |
For additional information on the DI trust fund and its predicted exhaustion date, see U.S. Congress, House Committee on Ways and Means, The 2015 Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, prepared by The Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, 114th, Cong., 1st, sess., July 22, 2015, H. Doc. 114-51 (Washington: GPO, 2015). |
| 7. |
For additional information on disability annuities for federal employees, see CRS Report RS22838, Disability Retirement for Federal Employees, by [author name scrubbed]. |