**[Wage Reporting and Earnings-Related Overpayments in the Social
Security Disability Programs]{.smallcaps}**

**[Status, Implications, and Suggestions for Improvement]{.smallcaps}**

*[Prepared for the:]{.smallcaps}*

![](media/image1.wmf){width="0.6666666666666666in"
height="0.6930555555555555in"}**[Ticket to Work and Work Incentives
Advisory Panel]{.smallcaps}**

*[Prepared by:]{.smallcaps}*

**[Gina A. Livermore, PhD]{.smallcaps}**

**[Cornell Center for Policy Research]{.smallcaps}**

**[4301 Connecticut Ave NW, Suite 330]{.smallcaps}**

**[Washington, DC 20008]{.smallcaps}**

**[www.ccpr.cornell.edu]{.smallcaps}**

**[May 5, 2003]{.smallcaps}**

This paper was prepared for the Ticket to Work and Work Incentives
Advisory Panel under a Social Security Administration contract to The
Urban Institute. The opinions, conclusions, and errors in this report
are the sole responsibility of the author, and do not represent the
official views of the Social Security Administration, The Ticket to Work
and Work Incentives Advisory Panel, The Urban Institute, or Cornell
University.

**[Wage Reporting and Earnings-Related Overpayments in the Social
Security Disability Programs:]{.smallcaps}**

**[Status, Implications, and Suggestions for Improvement]{.smallcaps}**

**[[Contents]{.underline}]{.smallcaps}**

[[Executive Summary]{.smallcaps} ii](#executive-summary)

[I. Introduction 1](#i.-introduction)

[A. Purpose of the Paper 1](#a.-purpose-of-the-paper)

[B. Sources of Information 1](#b.-sources-of-information)

[C. Organization 2](#c.-organization)

[II. The Significance of Timely reporting and processing of earnings
information
2](#ii.-the-significance-of-timely-reporting-and-processing-of-earnings-information)

[A. Work Incentive Provisions 3](#a.-work-incentive-provisions)

[B. SSDI and SSI Overpayments 4](#b.-ssdi-and-ssi-overpayments)

[C. The Ticket to Work Program 15](#c.-the-ticket-to-work-program)

[D. Summary 16](#d.-summary)

[III. SSA Processing of Wage information
17](#iii.-ssa-processing-of-wage-information)

[A. Overview of the Process 17](#a.-overview-of-the-process)

[B. Recent and Planned Changes Affecting Wage Reporting and Overpayments
19](#b.-recent-and-planned-changes-affecting-wage-reporting-and-overpayments)

[C. Challenges to Timely Wage Reporting and Overpayment Avoidance
25](#c.-challenges-to-timely-wage-reporting-and-overpayment-avoidance)

[IV. Suggestions for Improvements 34](#iv.-suggestions-for-improvements)

[A. Facilitate and Increase the Use of Readily Available Earnings Data
34](#a.-facilitate-and-increase-the-use-of-readily-available-earnings-data)

[B. Centralize Work CDR Processing
37](#b.-centralize-work-cdr-processing)

[C. Expand Formats for Reporting Wages Electronically and Receiving
Timely Feedback
38](#c.-expand-formats-for-reporting-wages-electronically-and-receiving-timely-feedback)

[D. Limit Overpayment Liability for Beneficiaries Who Appropriately
Report
40](#d.-limit-overpayment-liability-for-beneficiaries-who-appropriately-report)

[E. Increase Beneficiary Awareness and Promote Self-Efficacy
41](#e.-increase-beneficiary-awareness-and-promote-self-efficacy)

[F. Establish Performance Standards, and Monitor and Allocate Sufficient
Resources to PE Workloads
42](#f.-establish-performance-standards-and-monitor-and-allocate-sufficient-resources-to-pe-workloads)

[G. Establish a Cross-Component Task Force to Address PE Issues
43](#g.-establish-a-cross-component-task-force-to-address-pe-issues)

[V. Summary and Conclusions 43](#v.-summary-and-conclusions)

[References 46](#references)

[List of Acronyms 48](#list-of-acronyms)

[Attachments 49](#attachments)

# Executive Summary

Among Supplemental Security Income (SSI) and Social Security Disability
Insurance (SSDI) beneficiaries who return to work, benefit overpayments
are common. The Social Security Administration (SSA) has historically
lacked procedures to adequately document beneficiary work activity, and
to make adjustments to disability benefit payments in a timely manner.
This paper describes the current status of wage reporting, the
processing of work activity information, and earnings-related
overpayments in the SSI and SSDI programs.

**Importance of Timely Reporting and Processing.** The timely reporting
and processing of earnings information is essential to reduce the
likelihood of overpayments, which are costly and create an additional
administrative burden on SSA. Overpayments are also burdensome to
beneficiaries, as are sudden and unexpected terminations of eligibility
for cash or health insurance benefits that may result from the untimely
processing of earnings information. These types of "shocks," might
create substantial work disincentives for beneficiaries aware of the
risks. From the Ticket to Work (TTW) Employment Network (EN)
perspective, timely reporting and processing of earnings information is
necessary to obtain compensation for successfully serving clients under
TTW.

**Extent of Overpayments.** Earned income is the primary cause of
overpayments (SSA, 2002). Newly detected SSI overpayments were nearly
\$2 billion, or 6% of total outlays in 2001 (SSA, 2003b). For the SSDI
program, little information on overpayments is available. One source
estimates that about 50% of SSDI overpayment dollars were made to people
who should not have received benefits because of earnings, and SSA's
failure to take timely action when SSDI beneficiaries work may account
for about \$350 million in SSDI overpayments in 2001 (GAO, 2002a).

**Percent of Beneficiaries at Risk of Overpayments.** Available
information on overpayments and the percentage of SSI and SSDI
beneficiaries who work suggests that, in a given year, approximately 10%
of beneficiaries engage in work activity and thus, are at risk of
experiencing overpayments. Annual estimates of beneficiary work
activity, however, understate the risk of overpayment because:
beneficiaries remain on the rolls for long periods, so exposure to the
risk is not limited to annual periods; overpayments often accrue and
remain unidentified for many months or years, even after a beneficiary
has ceased working; and beneficiaries who work sporadically may be more
prone to overpayments, but may be less likely to be working at any given
point in time. According to an analysis of beneficiary work activity
over a five-year period, 25% of SSI and SSDI beneficiaries have engaged
in work activity resulting in earnings of \$2400 or more in at least one
calendar year of the previous five (or fewer) since benefit award
(Stapleton and Livermore, 2002).

**Recent Initiatives.** SSA has undertaken several recent initiatives
that address the issue of timely wage reporting and processing,
including:

-   TTW-related efforts such as the Disability Control File, the
    processing of earnings information by the Ticket Program Manager,
    the funding of benefits specialists to assist beneficiaries, SSA
    Employment Support Representatives, and the Modernized Return to
    Work software;

-   Increased SSI redeterminations and a focus on processing the Special
    Title II Disability Workload; and

-   Greater access to and use of available electronic earnings
    information.

**Challenges to Overpayment Prevention.** Despite the recent efforts,
numerous challenges remain. From SSA's perspective, complex program
rules governing the treatment of earnings, earnings definitions,
evidence requirements, monthly accounting, limited automation, limited
resources, diffused responsibility, and competing priorities all
contribute to untimely processing of wage information. From the
beneficiary perspective, understanding reporting and evidence
requirements and work incentive provisions, accurately estimating
monthly income, and taking appropriate follow-up actions represent
significant challenges to the timely reporting of wage information. From
the EN perspective, tracking TTW participant earnings and understanding
evidence and other program requirements represent challenges.

**Suggestions for Improvement.** Actions that SSA might undertake to
address some of these challenges are proposed, and include:

-   Facilitating and increasing the use of available electronic
    quarterly earnings information by adopting a uniform definition of
    earnings, simplifying evidence requirements, and wage averaging;

-   Centralizing work CDR processing in cadres similar to SSA's PASS and
    Special Disability Workload cadres;

-   Expanding the formats for reporting earnings and providing timely
    feedback on the potential impact of earnings on benefits and
    eligibility;

-   Limiting the overpayment liability for working beneficiaries who
    have appropriately reported their earnings;

-   Providing the means for increasing beneficiary awareness of
    reporting requirements and for promoting greater self-efficacy;

-   Establishing mechanisms to measure and monitor post-entitlement (PE)
    workloads, developing performance standards, and allocating
    sufficient resources to address PE workloads; and

-   Establishing a cross-component PE task force to analyze PE issues
    holistically, identify and prioritize areas where improvement is
    needed, develop and implement solutions, and be held accountable for
    monitoring and reporting on the progress and impacts of the
    modifications.

**Implications for Ticket to Work.** TTW has brought about many changes,
some of which will likely improve the processing of work reports. The
fact that these workloads have been inadequately processed in the past
could, however, undermine the success of TTW because: beneficiaries
fearing overpayments may choose not to participate in TTW; beneficiaries
with overpayments that have not been identified but subsequently are
uncovered because of participation in TTW will equate TTW with
overpayments and may choose to withdraw from working and participating
in TTW; ENs submitting their first claims for outcome payments on a
Ticket holder will be forced to wait long periods for payment while SSA
sorts out years of information to determine whether benefits have gone
to zero; and SSA will have permitted the assignment of Tickets by
beneficiaries who are, in actuality, ineligible for TTW.

An easy solution to untimely wage reporting and processing is not
evident. A substantial investment and concerted effort will be required
on SSA's part to address the current challenges. SSA will need to
scrutinize its PE policies and procedures in light of 21^st^ century
processes and capabilities, and adapt accordingly. The agency must also
acknowledge the importance of addressing general PE issues in the
context of the larger public policy goal of supporting work outcomes and
promoting the self-sufficiency of people with disabilities before
significant progress can be made. Earnings-related overpayments are only
one symptom of a much larger and more fundamental issue: the Social
Security disability programs are not designed to support employment.

# I. Introduction

## A. Purpose of the Paper

Among Supplemental Security Income (SSI) and Social Security Disability
Insurance (SSDI) beneficiaries who return to work, benefit overpayments
are common. An overpayment results when a beneficiary is paid SSI and/or
SSDI benefits to which he or she is not entitled. Earned income is the
most common reason for Social Security overpayments.

The Social Security Administration (SSA) has historically lacked
procedures to adequately document beneficiary work activity, and to make
adjustments to disability benefit payments in a timely manner. SSA has
undertaken a number of recent initiatives to address the issue of
overpayments in the SSI program, however, SSA's capabilities for
preventing overpayments due to work activity in the SSDI program remain
particularly poor.

Under the Ticket to Work (TTW) program, the need to accurately track
beneficiary work activity and assess its impacts on benefits in a timely
manner has become critical, not only to TTW participants attempting to
manage their benefits, but also to the Employment Networks (ENs)
providing services to beneficiaries whose payments from SSA are
contingent on the work activity and cash benefit status of their TTW
clients.

Recognizing the inadequacies of current procedures and the importance of
accurate and timely earnings tracking under TTW, SSA has developed new
systems, software, and procedures for tracking beneficiary earnings and
identifying changes in benefit status. Since 1997, SSA has also been
engaged in a number of enforcement activities designed to reduce
overpayments in the SSI program.

The purpose of this paper is to describe: the current status of wage
reporting, the processing of work activity information; the extent of
earnings-related overpayments among disability beneficiaries; and the
potential causes for earnings-related overpayments. While there are many
reasons why overpayments might occur, the focus here is on how earnings,
and the manner in which SSA processes earnings information, affects the
risk of overpayments among SSI and SSDI beneficiaries who work.[^1] The
paper provides a discussion of the implications of overpayments for the
Ticket to Work program and beneficiary work effort , and proposes
actions SSA might consider undertaking to reduce the incidence of
earnings-related overpayments.

## B. Sources of Information

The paper is based on information collected from several key sources:

-   Existing data, reports, and SSA documents describing the wage
    reporting process, SSA systems, and the extent of and reasons for
    overpayments;

-   Interviews with SSA field and central office staff conducted
    specifically for this paper; and

-   Interviews with staff from SSA field and central offices, TTW
    employment networks, state vocational rehabilitation agencies, and
    the TTW Program Manager conducted for purposes of SSA's preliminary
    process evaluation of the Ticket to Work program.[^2]

## C. Organization

The paper is organized as follows:

In ***Section II***, the significance of timely reporting and processing
of earnings information is described. After a brief description of SSA
work incentive provisions, the topics of overpayments, TTW, and the
implications of overpayments for beneficiary work effort are discussed.

In ***Section III***, a description of how SSA processes wage reports is
provided. The section begins with a simplified overview of the process,
then describes recent and planned changes to the process that affect
wage reporting and the risk of overpayments. The section concludes with
a discussion of the challenges associated with timely wage reporting and
overpayment avoidance faced by SSA, beneficiaries, and ENs.

In ***Section IV***, a number of suggestions for improving the
timeliness of wage reporting and information processing are proposed.

A summary and concluding remarks are provided in ***Section V***.

# II. The Significance of Timely reporting and processing of earnings information 

Over time, and particularly during the past decade, there has been a
significant shift in the way society views people with disabilities.
There is now an expectation that people with disabilities can and should
be able to participate in all aspects of mainstream society, including
employment. The state of "disability" is increasingly viewed as a
byproduct of an individual's environment, rather than as a physical,
mental, or emotional health condition or limitation. With the
appropriate training, supports, and environment, even those with what
might be considered very significant physical and/or mental impairments
can live independently and be self-sufficient.

The SSDI and SSI programs are two federal programs that are very
important to the welfare of people with significant disabilities. The
cash benefits provided by these programs, and the associated Medicare
and Medicaid health insurance coverage, are significant sources of
support for over 8 million working-age adults with significant
disabilities. These programs, however, can create work disincentives for
beneficiaries because eligibility and/or benefit levels are tied to
earnings from work, either directly or indirectly. As disability
beneficiaries increase their work effort, benefit levels are reduced
and/or lost completely.

The sections below provide a discussion of the significance of timely
reporting and processing of earnings information. Timely reporting and
processing of earnings information is critical for avoiding benefit
overpayments, as well as unexpected terminations in cash and health
insurance benefits. Timely earnings reporting and processing is also
critical for EN payments under TTW. Overpayments, or the risk of
experiencing an overpayment situation, might also have consequences for
beneficiary work effort. Overpayments, TTW, and the implications of
overpayments for beneficiary work effort are discussed, respectively, in
***Sections B***, ***C***, and ***D*** below. In order to understand the
issue of beneficiary work efforts and the implications for overpayments,
it is necessary to first understand and appreciate the complexity of the
work incentive provisions of the Social Security disability programs. A
brief discussion of these provisions is provided in ***Section A***. The
reader familiar with the disability programs and the complex provisions
related to work and earned income is encouraged to skip this material.

## A. Work Incentive Provisions

The SSDI and SSI programs have a number of work incentive provisions
intended to encourage beneficiaries to work and develop less reliance on
public programs by allowing them to remain eligible for their cash and
health insurance benefits longer at higher levels of earnings. For the
SSDI program, these provisions include the nine month trial work period
(TWP), the deduction for impairment-related work expenses (IRWEs),
employer subsidy, and extended periods of eligibility for cash benefits
and Medicare. For the SSI program, work incentive provisions include:
IRWEs, deductions for blind work expenses, plans for achieving self
support (PASS), the \$1 for \$2 earned income disregard, extended
eligibility for cash benefits and Medicaid through section 1619(a),
extended Medicaid eligibility when cash benefits cease because of
earnings through section 1619(b), and the student earned income
exclusion.[^3]

The 1999 Ticket to Work and Work Incentives Improvement Act created a
number of new provisions and resources to further encourage and support
work attempts by SSDI and SSI disability beneficiaries. These include:

-   Extending the original 36-month Medicare Extended Period of
    Eligibility an additional four and one-half years for most working
    people with disabilities. Most SSDI beneficiaries will be able to
    keep their Medicare coverage at least eight and one-half years after
    they return to work.

-   Greater flexibility to states in developing Medicaid Buy-in
    programs, under which workers with disabilities can purchase
    Medicaid coverage.

```{=html}
<!-- -->
```
-   Benefits Planning, Assistance and Outreach (BPAO) programs in all
    states, the District of Columbia, and five territories providing SSA
    disability beneficiaries with information about SSA work incentives
    and other Federal efforts to remove regulatory and programmatic
    barriers to employment for persons with disabilities.

```{=html}
<!-- -->
```
-   Expedited re-instatement of benefits, where former SSDI/SSI
    beneficiaries can request a re-instatement of benefits if terminated
    because of work activity in the past five years.

-   The Ticket to Work program, where eligible beneficiaries are given
    tickets that may be used to obtain employment-related services from
    participating providers, called Employment Networks (ENs). ENs will
    be reimbursed based on beneficiary employment outcomes and are
    encouraged to provide a wide range of traditional and
    non-traditional employment supports.

-   Waiver of continuing disability reviews (CDRs) during the period a
    beneficiary is participating in the Ticket to Work program;[^4]

-   Elimination of work activity as a criteria for selection for a CDR;
    and

-   Demonstrations that will be conducted to test whether specific
    provisions promote employment among beneficiaries and
    applicants.[^5]

In addition, legislation was passed in 1999 to increase the level of
substantial gainful activity (SGA) from \$500 to \$700 of earnings for
non-blind individuals. The SGA level is a key factor used in the SSDI
and SSI disability determination process. For the first time, the
legislation also requires the SGA level to be indexed each year based on
changes in national average wages for both non-blind and blind
individuals. In 2003, SGA is \$800 for non-blind individuals and \$1330
for blind individuals.

The existing work incentive provisions and recent program changes
demonstrate a commitment on behalf of Congress and the federal
government programs to support the employment efforts of people with
significant disabilities. They also indicate just how complicated the
issue of benefit levels and eligibility become when a disability
beneficiary pursues employment and experiences changes in earned income.
The U.S. General Accounting Office (GAO) continues to remind SSA to
balance the changes so that while expanding and supporting work
opportunities, the agency needs to identify and implement cost-effective
options for simplifying complex policies. In addition, while SSA has
taken steps in trying to return beneficiaries to work, it has not
developed, as GAO has recommended, a comprehensive return-to-work
strategy that focuses on identifying and enhancing beneficiaries' work
capacities. (GAO, 2003a).

## B. SSDI and SSI Overpayments

A significant consequence of untimely wage reporting and/or untimely
benefit adjustment in response to wage reports is a benefit overpayment.
An overpayment results when a beneficiary is paid SSI and/or SSDI
benefits to which he or she is not entitled, and earned income is the
most common reason for Social Security overpayments.

The subsections below provide an overview of the frequency and magnitude
of SSI and SSDI overpayments, why overpayments occur, and how
overpayments are recovered by SSA. The final subsection provides a
discussion of the potential impact of overpayment situations on
beneficiary work efforts.

### 1. Frequency and Magnitude of Overpayments Among SSI/SSDI Beneficiaries

How frequently do beneficiaries experience overpayment situations?
Readily available information to answer the question could not be
identified. Some empirical and anecdotal information suggests that
overpayments among SSI and SSDI beneficiaries who work are common and
costly occurrences.

From 1997 until this year, the SSI program has been designated by GAO as
a high-risk program because of over \$1 billion in annual benefit
overpayments. Newly detected SSI overpayments were nearly \$2 billion,
or 6% of total outlays in 2001 (SSA, 2003b). While these numbers reflect
all SSI recipients and all reasons for overpayments, increases in earned
income is the most common reason for overpayments in the SSI program.
The SSI program has taken steps to reduce the level of overpayments, and
as a result, was removed from GAO's high risk list in January 2003.[^6]

Little information exists regarding the extent of overpayments in the
SSDI program. SSA conducts annual enforcement activities that include
merging Internal Revenue Service (IRS) data on earnings with SSA
administrative data. SSA officials indicate that, annually,
approximately 500,000 alerts related to earnings among SSDI
beneficiaries are generated based on these activities. The alerts
indicate that the earnings information contained in the IRS data do not
match the earnings information contained in SSA administrative data and
that further investigation on the part of SSA should be conducted
because an overpayment situation is likely. In 2001, there were
approximately 6 million SSDI beneficiaries. Alerts, were therefore
generated on approximately 8% of the caseload. While alerts are
generated for SSA staff, the information is not used in any systematic
way to send a reminder or alert to the beneficiary.

The available information on overpayments and the percentage of SSI and
SSDI beneficiaries who work suggests that, in a given year,
approximately 10% of beneficiaries engage in work activity and
therefore, are at risk of experiencing earnings-related benefit
overpayments. Annual estimates of beneficiary work activity, however,
likely understate the potential risk of overpayments because of several
factors:

-   Beneficiaries remain on the rolls for long periods of time, so their
    exposure to the risk of, and potential liability for, overpayments
    is not limited to annual periods;

-   Overpayments frequently accrue and remain unidentified for many
    months or years, even after a beneficiary has ceased working; and

-   Beneficiaries who work sporadically may be more prone to
    overpayments, but may be less likely to be working at any given
    point in time.

Essentially, any individual who has ever received disability benefits
and worked while receiving those benefits is at risk of experiencing an
overpayment. Data pooled from three years of the Survey of Income and
Program Participation and matched to SSA administrative data indicate
that, in a given year, about 10% of all disability beneficiaries have
engaged in work activity, measured as earnings of \$300 or more per
year. About another 5% of beneficiaries are engaged in activities that
are preparing them for work, defined as having participated in a
training programs or been enrolled school during the year. Looking over
a longer period, these data indicate that 25% of disability
beneficiaries had recent earnings, defined as earnings of \$2400 or more
in any calendar year in the previous five years, but only including
years since disability benefit award (Stapleton and Livermore, 2002).
These data appear to be at odds with the widespread perception that few
disability beneficiaries work. For example, a recent GAO report notes
"...relatively few disability beneficiaries work and no more than 1
percent leave the DI and SSI beneficiary rolls each year because of
their work." (GAO, 2002a, p. 5). While it might be that annual exits due
to work are low, 1 in 4 beneficiaries working at some point during a
period of five years or less is clearly more than "relatively few."

### 2. Why Overpayments Occur

Overpayments can occur for a number of reasons. Some common reasons for
overpayments in the SSI program are:

-   Changes in wages or earnings;

-   Changes in living arrangements and the income of household members;
    and

-   Changes in resources.

A recent GAO report (GAO, 2002b), states that recipient non-reporting of
key information accounted for around 75% of approximately 1 million
payment errors each year. These figures apply to the entire SSI program,
and not specifically to working-age adults. These figures may also be
somewhat misleading in light of the procedures for estimating income for
purposes of computing monthly SSI payments. SSI recipients are required
to submit estimates of monthly income for a period of 12 months. In most
cases, actual income is then assessed retrospectively (called a
redetermination) and under- or overpayments are computed. Unscheduled
redeterminations can occur if a significant change in income or living
arrangements is reported. By the very nature of the SSI program rules,
small to moderate under- and overpayments are common over a 12 month
period. Earned income has been the primary cause of SSI overpayments for
over a decade (SSA, 2002), accounting for approximately 25% of
overpayments detected among all SSI recipients (GAO, 2002b). The
percentage is likely much higher among working-age disabled adult
recipients.

For the SSDI program, no analogous information about the frequency of
overpayments could be identified. Given the eligibility requirements of
the program, however, it seems logical to believe that earnings and
earnings-related issues (e.g., IRWE, subsidy) would be the primary cause
of SSDI overpayments, as the only other reason an SSDI beneficiary would
become ineligible for benefits is because of medical improvement. SSDI
has not been on GAO's high risk list, and therefore, has not been
subject to the same scrutiny and collection of information on
overpayments as the SSI program. A recent GAO report on concurrent
beneficiaries (those receiving both SSI and SSDI) notes, however, that a
one-time analysis of SSA disability overpayments based on data from 2000
described by SSA officials indicated that about 50% of the overpayment
dollars were made to people who should not have received benefits
because of their earnings. Based on this information, the report also
indicates that failure to take timely action on SSA's part when SSDI
beneficiaries work may account for about \$350 million in SSDI
overpayments in 2001 (GAO, 2002a).

There are essentially only two reasons why an overpayment situation
would occur in either program:

-   Information affecting benefits or eligibility is not reported
    timely; and/or

-   Reported information affecting benefits or eligibility is not
    processed timely.

The first three scenarios below illustrate, according to a BPAO trainer
who has viewed hundreds of such cases, very common overpayment scenarios
and experiences among disability beneficiaries who go to work.[^7] The
fourth scenario, while less common, is representative of the overpayment
experiences of some members of a specific group of working
beneficiaries, those with statutory blindness.[^8] The scenarios
illustrate the complexity of the SSI and SSDI programs and the
difficulties resulting from work efforts that beneficiaries experience
with the programs.

#### Overpayment Scenario 1: The Diligent Wage Reporter

Jack is an SSDI beneficiary who receives a notice from SSA that he
should have been terminated from benefits more than a year ago due to
SGA level employment and now owes SSA over \$18,000 in benefit
overpayments. Jack is extremely upset about this correspondence and
makes an appointment with the local BPAO Benefits Specialist to
determine what has happened and if anything can be done about it. The
Benefits Specialist researches the case and uncovers the following chain
of events:

1.  Jack went to work more than five years ago earning more than the TWP
    amount, but less than the SGA guideline. He reported his earnings
    via Social Security's 800 number. The person he spoke to indicated
    that the information would be recorded, but that his earnings were
    not high enough to affect his benefits.

2.  When Jack did not receive any correspondence from the SSA confirming
    his employment, he became anxious. He visited the local SSA field
    office with his pay stubs to report his earnings in person. The SSA
    employee at the front desk told him that he did not need to submit
    pay stubs at that time. She said that he would be reviewed after his
    Trial Work Period. In addition, he was told that he was not earning
    enough money to affect his benefit check. She told him that SSA
    would contact him for more information when it was needed.

3.  Jack continued to work and never received any inquiries from SSA.
    After about a year, he again called the SSA 800 number. The SSA
    employee he spoke to said they were aware that he was working and
    that he was, indeed, entitled to his SSDI check. Jack indicated that
    he was earning more now than he was previously. The SSA employee
    said that she would mail a form to Jack to complete giving more
    information about his work. Jack received the form a week later,
    completed it, and returned it to SSA.

4.  Jack continued to work and now had earnings over the SGA level. He
    never received any further correspondence from SSA confirming the
    information he had reported previously. Because he had diligently
    reported his wages, he assumed that he was entitled to the SSDI
    payments he continued to receive. Jack continued working at
    SGA-level employment for several more years until his disability
    worsened and he needed to resign. This occurred during Jack's EPE.

5.  Jack did not work again until after his EPE at which time he began
    receiving earnings over the SGA level. He again reported his
    employment via the 800 number, but never received any correspondence
    from SSA. After nearly a year, Jack went to the local SSA field
    office with his pay stubs and met with an SSA Claims Representative
    (CR). She told Jack that he was over the SGA guideline and that his
    SSDI eligibility probably should have been terminated some time ago.
    She said that she needed to verify his wages with his employer and
    would contact him with more information at a later date. She advised
    Jack not to cash any more SSDI checks, as repayment may be
    necessary.

6.  Jack waited for three months and never heard back from SSA. He
    returned to the field office and met with another CR. That CR
    indicated that Jack's employer never responded to SSA's inquiries
    for wage verification. The CR also stated that a review cannot be
    conducted until Jack's master file (the paper folder) has been
    received at the field office from one of SSA's program service
    centers. Apparently, the file was never requested subsequent to
    Jack's previous visit to the field office. The CR said that SSA can
    use pay stubs to verify earnings and asks if Jack has these. Jack
    states that he already submitted them, but for some reason they are
    not in Jack's file.

7.  Jack finally received a notice of termination two months later. The
    Benefits Specialist noticed that Jack had incurred potential IRWEs
    and a subsidy that was never developed. While Jack had incurred a
    substantial overpayment, the final amount due was only \$3,000 once
    the appropriate work incentives were applied.[^9]

#### Overpayment Scenario 2: The Confused Concurrent 

Emily is a concurrent beneficiary receiving both SSI and SSDI payments.
She took a job earning \$800 per month and reported her earnings to SSA.
Within several weeks, Emily received a letter from SSA indicating that
her SSI check would cease due to earnings, but that her Medicaid would
continue. Emily assumed that, because she had received this letter, her
earnings were fully accounted for by SSA. Approximately one year later,
Emily received some forms from SSA to complete asking about her wages,
living arrangement, bank accounts, as well as other information. Her
case manager helped her to complete the forms and she returned them to
SSA. Emily continued to receive her Medicaid card each month, but did
not receive any SSI cash payments. Her SSDI payments continued
unchanged.

Emily continued working and earning more than \$800 per month, and
received no further communication from SSA. Three years later, Emily
received a letter from SSA notifying her that she had been overpaid. Her
SSDI benefits should have been terminated many months ago due to her
employment, and she had been overpaid by more than \$10,000. A week
later, Emily received another letter from SSA notifying her that SSA
owed her for SSI payments she should have received. Emily became very
confused and anxious. She tells her case manager that she is going to
quit her job because working caused such a mess.

#### Overpayment Scenario 3: The SSI Bait and Switch

Jill is an SSI recipient who achieved paid employment through a
supported employment program. She has worked successfully at several
different jobs for more than eight years. All during this time, Jill
reported her earnings to SSA in a timely fashion and worked closely with
SSA to ensure that overpayments or underpayments were kept to a minimum.
Recently, Jill received a notice from SSA indicating that she might be
eligible for SSDI benefits, which should have begun several years ago,
but were overlooked by SSA due to a computer error. The letter states
that she must apply for SSDI benefits, or risk losing her SSI
eligibility.

Jill and her family are alarmed by the letter and make an appointment to
meet with a Benefits Specialist. The Benefits Specialist discovers that
Jill should have begun receiving SSDI benefits five years ago. The SSDI
benefit would have been high enough to make Jill ineligible for SSI. In
addition, Jill worked for more than a year in a job earning over the SGA
level after her SSDI eligibility should have been established. SSA
determined, retrospectively, that Jill should have lost SSDI eligibility
at that time. SSA informs Jill that she owes all of the SSI payments she
has received from the point when she would have been SSDI eligible five
years ago, onwards. SSA also informs Jill that she is owed SSDI payments
from the point at which she was SSDI eligible to the point when her work
above SGA would have terminated her SSDI eligibility (i.e., when she
completed the TWP). The end result is that Jill suddenly and
unexpectedly loses both SSI and SSDI eligibility, as well as her
eligibility for Medicaid. Jill and her family are stunned, as they had
been diligently adhering to the SSI work incentive provisions when
making decisions about Jill's employment. Jill needed to preserve her
Medicaid eligibility in order to pay for expensive, disability-related
medications she requires. The family does not know what they will do to
pay for Jill's medications.

***Overpayment Scenario #4: The Blind Leading the Blind***

Bob is an SSDI blind beneficiary. For the past five years he has
operated a facility that sells newspapers and snack items in a federal
building under the terms of the Randolph-Shepard Act, where he has
earned approximately \$25,000 annually in net self-employment income.
Each year, Bob has submitted his tax return to SSA indicating his self
employment income. Bob received a notice from SSA indicating that his
SSDI benefits should have been terminated over four years ago and that
he has been overpaid by nearly \$50,000. Bob is shocked. When he first
started working, his vocational rehabilitation (VR) counselor had told
him that blind individuals can work at higher levels than others, and
with his work expenses, he would be able to earn the amounts he was and
not lose his SSDI. After recovering from his initial shock, Bob takes
the letter to a lawyer, who tells him that the overpayment is likely
erroneous because SSA may not have applied the blind SGA level, and
likely has not deducted Bob's unincurred business expenses in
calculating SGA. Under the Randolph-Shepard Act, Bob is permitted to
operate his facility rent-free in the federal building. The value of the
free rent should be deducted as an unincurred business expense when
calculating Bob's SGA. The lawyer asks if Bob has requested to have his
benefit payments reinstated. Bob says no because he missed the 10-day
deadline for requesting payment reinstatement.

The lawyer instructs Bob to speak with the building manager and attempt
to obtain a market value for the space that Bob's facility occupies. Bob
contacts the building manager but, because the building is owned and
fully occupied by the federal government, no rental value could be
obtained. Bob's lawyer then instructs him to obtain two or three
professional real estate appraisals. Bob obtains two appraisals but must
pay the appraisers a fee of \$200 each. The appraisals indicate that the
market value of Bob's space is approximately \$1000 per month.

Bob, with the assistance of his lawyer, requests reconsideration, and
meets with an SSA CR to review his case to ensure that SSA is applying
the blind SGA level and to provide information on the unincurred
business expenses. The CR acknowledges that the blind SGA was not
applied, but is unfamiliar with the provision related to unincurred
business expenses. She says she will consider the information and notify
him of the decision. Bob subsequently receives a letter stating that the
original overpayment amount is correct. He then files an appeal for a
hearing before an administrative law judge (ALJ). With the assistance of
his lawyer, and after considerable expense and anxiety, Bob's
overpayment decision is overturned by the ALJ one year later, during
which time he did not receive any SSDI benefits.

The above four scenarios represent situations where beneficiaries
reported their earnings to SSA in a timely manner, but because of a lack
of automation in recording wage reports, lack of systematic collection
of information pertinent to work incentives, and complex program rules,
immense challenges remain in the processes used by SSA to document
earnings and adjust benefits, resulting in significant overpayments. In
Jack's situation (Scenario 1) the reason for the overpayment is that SSA
simply did not process the information reported in a timely manner. In
Emily's case (Scenario 2), SSA processed the reported earnings
information and made adjustments to her SSI benefits, but neglected to
do so for her SSDI benefits until several years later. Similarly, in
Jill's situation (Scenario 3), SSA processed the earnings information
for her SSI benefits, but as Jill continued to work and achieved
sufficient quarters of covered earnings to become eligible for SSDI, no
alert was generated in SSA's systems that she was eligible for SSDI. In
Bob's case (Scenario 4), SSA did not "know" he was blind, and thus, did
not apply the blind SGA, and the staff person processing Bob's
information was unfamiliar with a relatively obscure work incentive
provision. In addition, both Jack and Bob had no vehicle for submitting
information to SSA about IRWEs, subsidy, and unincurred business
expenses on an ongoing basis in order to avoid the overpayments in the
first place. The reasons for these overpayment situations and the
challenges faced by SSA in processing work reports are discussed further
in ***Section III***.

Another common scenario is that beneficiaries simply do not report their
earnings. This may be intentional, out of fear of losing benefits and
under a presumption that the chances and consequences of being caught
are small. It may also be unintentional, due to ignorance of reporting
requirements and procedures, work incentive provisions, and the effect
of earnings on benefits and eligibility. In other words, it might be due
to an inability to figure out how and what to report when and to whom.
SSA currently does not mail targeted reminders to this population
despite its vulnerability to non-reporting.

### 3. Non-Reporting Penalties and Overpayment Recovery[^10]

#### a. Penalties

Beneficiaries are required, as a condition of their eligibility for
benefits, to report changes in earnings or other factors that might
affect eligibility. In the SSI program, changes must be reported within
10 calendar days of the end of the month in which the change occurred.
If a recipient fails to report an event that affects the SSI benefit,
there may be a penalty deduction in later benefit payments as follows:

-   \$25 penalty for the first occurrence;

-   \$50 penalty for the second occurrence; and

-   \$100 for each subsequent failure.

SSA does not typically impose a penalty if the beneficiary is without
fault or demonstrates good cause for not reporting an event. According
to one source, penalties were only assessed in 3,500 of approximately
750,000 cases of SSI recipient non-reporting that resulted in
overpayment (GAO, 2002b).

SSDI beneficiaries are also required to report a set of specific changes
related to earnings and income. With respect to earnings, SSDI
beneficiaries are required to report:

-   Changes in work status, such as: work beginning; work stopping; and
    work activity increases; and

-   Changes in disability-related work expenses.

Information regarding penalties that SSA might assess for failure to
report such changes under the SSDI program could not be identified.

Under both programs, more serious fines or imprisonment may be imposed
for deliberate attempts to defraud. Such actions include, but are not
limited to: making false statements or misrepresentations in applying
for benefits; making false statements or misrepresentations of material
facts at any time if for use in determining benefit rights; and
concealing, or failing to reveal, information about events affecting
initial or continued right to benefits or the amount of payment.

#### b. Overpayment Recovery

If SSA finds that a beneficiary has been overpaid, the beneficiary will
be sent a Notice of Overpayment. The Notice of Overpayment will note the
amount of the overpayment and indicate that the beneficiary must return
the overpaid amount within 30 days.

If the beneficiary believes the overpayment determination to be
incorrect, either because the amount is incorrect or because the reason
given by SSA for the overpayment is incorrect, the beneficiary may
request reconsideration. The beneficiary must request reconsideration in
writing and submit the request to the local SSA field office within 60
days of receiving the Notice of Overpayment. The beneficiary also has 10
days to file a request for payment reinstatement while the decision is
being appealed.

For reconsideration of the decision, the beneficiary may request: a case
review, where an SSA CR will review the paper file and make a decision
based on the review; an informal conference, where the beneficiary can
meet with a CR to review the case and provide additional information; or
a formal conference, where the beneficiary brings witnesses to help
present his or her case to the CR. At the same time as requesting
reconsideration of the decision, a beneficiary might request a personal
conference to discuss a waiver of the overpayment, if one is ultimately
determined (described further below).

After reconsideration, if SSA's decision is that the beneficiary was
overpaid, the beneficiary can appeal the decision. The appeals process
is similar to the process for initial disability determination denials.
The beneficiary has 60 days to file an appeal for a hearing before an
ALJ. If the ALJ decision is unfavorable, the beneficiary may appeal to
the SSA Appeals Council. If the decision is still unfavorable, the
beneficiary's last resort is to take the case to the courts. These last
three steps generally involve the assistance of an attorney or legal
advisor. During the appeals process, SSA may begin to recover the
overpayment. If the beneficiary wins the appeal, SSA is required to
return the amounts recovered.

If the beneficiary believes SSA to be correct in the amount of the
overpayment, or is denied appeals of an overpayment, he or she may
request a waiver. A waiver may be granted if the beneficiary is not at
fault for the overpayment and cannot afford to repay the amount. SSA
will automatically grant waivers for small overpayments if all of the
following conditions are met:

-   the amount is less than \$500 (available one time in each period of
    entitlement);

-   the beneficiary did not cause the overpayment by making a false
    statement to SSA; and

-   the beneficiary submits a request for the waiver.

To request the waiver, the beneficiary must complete an Overpayment
Recovery Questionnaire. This form contains questions about whether the
beneficiary reported the change(s) that led to the overpayment, and
whether he or she knew that reporting the change was required. It also
asks questions about the beneficiary's income. The information is used
to determine whether or not the overpayment was the fault of the
beneficiary and whether or not the beneficiary can afford to repay the
amount. Reasons that might indicate that the overpayment was not the
fault of the beneficiary include instances where the beneficiary:

-   has difficulty reading and did not know what was supposed to be
    reported to SSA;

-   has difficulty remembering or understanding directions;

-   believed he or she reported every change that might have caused an
    overpayment, and has a written acknowledgement of making the report
    in a timely fashion;

-   was not informed of the reporting requirement; or

-   applied for SSI and/or SSDI a long time in the past and did not
    remember the reporting rules.

For beneficiaries not receiving SSI, all income and expenses must be
listed on the form to determine ability to repay. If the beneficiary is
an SSI recipient, it is assumed that he or she cannot afford to repay
the overpayment. The beneficiary need only indicate that he or she is
receiving SSI in the section requesting financial information.

As noted above, beneficiaries may request a Personal Conference, where
they meet with an SSA representative in person to discuss the reasons
for the overpayment and to request a waiver.

If SSA does not grant a waiver, the beneficiary can request
reconsideration in writing within 60 days. The reconsideration and
appeals process for a waiver is the same as that described above for the
overpayment determination.

Beneficiaries ultimately required to repay an amount may request a
payment arrangement, under which SSA permits them to repay the amounts
they owe in small increments each month. If a payment arrangement is not
requested by the beneficiary, SSA may automatically take the whole SSDI
benefit, and/or 10% of the SSI benefit. SSA attempts to recover
overpayments within three years, but SSA cannot withhold more than 10%
of an SSI benefit, even if it takes more than three years to recover the
overpayment. SSA is also permitted to recover overpayment amounts from
future federal tax refunds and Social Security retirement benefits that
the beneficiary might receive. In cases where the overpayments were made
to a representative payee, the representative payee is liable for the
repayment. SSA is permitted to use the same means to recover
overpayments from representative payees as from beneficiaries
themselves.

According to one source, approximately 60% of SSI overpayments
identified will eventually be recovered (SSA, 2000). In recent years,
much greater emphasis has been placed on overpayment recovery. GAO has
criticized SSA for being too liberal in its waiver policies and for not
pursuing overpayment recovery aggressively enough (GAO, 2002b). The
Foster Care Improvement Act of 1999 included provisions that allow SSA
greater flexibility in pursuing overpayments. In particular, it
authorized the use of cross-program benefit recovery; that is, Title II
SSDI or retirement benefits can be withheld to recover past SSI
overpayments.

### 4. Implications for Beneficiary Work Effort and Well-Being

Overpayments, or the risk of experiencing an overpayment, might affect a
beneficiary's decision to go to work, or the decision to continue
working. When deciding whether or not to work, a beneficiary is weighing
the known costs and benefits. If the financial and psycho-social gains
from work do not exceed what must be given up (e.g., cash and in-kind
benefits, work-related expenses, time doing other activities, physical
or mental well-being), then it is unlikely that he or she will work.

The perceived threat of an overpayment situation creates additional
costs to working. There are time and monetary costs associated with:

-   developing an adequate understanding of the SSI and SSDI programs
    and the actions that must be undertaken to avoid overpayment
    situations;

-   reporting the appropriate earnings information to SSA and carefully
    monitoring benefits to ensure that the information is processed
    correctly; and

-   addressing an overpayment, if actually experienced (e.g., the filing
    of forms in a timely manner, interactions with SSA, retaining legal
    or other assistance).

Perhaps a more significant work disincentive than the time and monetary
costs noted above may be the risk of facing the financial and
psychological effects of a large, and unexpected debt to the federal
government at some time in the future, and the consequences of a sudden
and unexpected termination of cash or health insurance benefits.

Information obtained via focus groups conducted with workers with
significant disabilities for a recent study on the employment of people
with disabilities, sponsored by the U.S. Department of Health and Human
Services, illustrates some of the costs borne by beneficiaries who
experience overpayments. The following is an excerpt from one of the
study's reports, based on the focus group findings:[^11]

> Participants across focus groups related numerous stories about SSI
> overpayments, including difficulty in identifying and resolving them.
> In some cases, participants were aware that they were receiving
> overpayments (due to eligibility or earnings), but they were
> unsuccessful in resolving the issue quickly, or at all, until the
> Social Security Administration eventually and independently identified
> the overpayment, and requested the money be returned:

-   "I went down there with a case manager and we reported everything.
    > And they said, 'Okay, everything\'s fine.' It\'s, like, you
    > [should]{.underline} be getting that money. And then some time
    > goes by. I don\'t think anything about it and...like a year or
    > something goes by, and another case manager says, 'Wait a minute.
    > You\'re being overpaid. You\'re going to have to pay all that
    > money back.' And so I start to go, 'Oh my God, it\'s going to be
    > thousands of dollars.' And so we went down to SSI and they said,
    > 'Well, there\'s nothing we can do about it. You have to just put
    > that money all in an account and just save it.'... But we came to
    > the conclusion \[that\] if I had saved all that money, then they
    > would have taken my medical benefits away from me because I'd have
    > too much money that I\'m saving... They do it to everybody. And it
    > doesn\'t help you get on your feet. It doesn\'t help you keep a
    > job. I\'ve worked very hard to get where I am, and I really don\'t
    > think it\'s fair that I have a \$7,000 debt that I have to pay
    > back."

-   "I reported everything correctly and I get the response back,
    > 'Everything is fine. Don\'t worry about it. We\'ll inform you.'
    > And then at some point, I got a letter saying, 'Okay, well, you
    > make too much money so the money benefit is now over. Sign this
    > that you acknowledge and agree.' I did, I sent it back in. And at
    > the same time, they send me another check... Must be my last one,
    > that\'s fine. Then I get another check. And for about eight
    > months, they send me a check... I informed them, 'By the way, did
    > you know you\'re still sending me money?' I don\'t hear anything
    > back, but I get another check. I need the money, and obviously you
    > either don\'t care or you\'ve missed something. So I don\'t
    > contact them. Then, over a year later, they contact me saying,
    > 'Oh, by the way, we\'ve overpaid you. Now you owe us money.'"

> Most recipients of SSI overpayments \[in the focus groups\] were
> eventually acquiescent regarding reimbursement:

-   "If they make an overpayment\...well it\'s your mistake."

-   "I owed them about \$3,700 by the time it was all over."

-   "I'm paying \$10 a month for the next 19 years to pay back \$2,300.
    > They're taking it out of my Social Security."

-   "It's because I was working and \[I was\] on SSI. On my first check
    > when I was on SSI, I was working and they sent me my retroactive
    > and I was working all that time so I have to pay it back."

> However, at least one participant found that by continually
> challenging the request for reimbursement the debt was eventually
> forgiven, a process that he likens to his initial application for
> benefits:

-   *"SSI has \[a\] form... You just call them on the phone or look them
    in the face and say, 'I cannot pay. What can we do?'... And they
    will eventually hand you that form. \[Then\] it takes months and
    months and months of resubmitting this same form over and over and
    over... It\'s just like applying\--this is the funny part\--it\'s
    just like applying for SSI in the beginning. You get the three
    denials, and then finally with enough people behind you, they\'ll
    finally accept it. \[You tell them,\] 'I have no money. I\'m
    incapable of paying this money back.' Denied. Start again. Denied.
    Start again. Denied. Start again. 'Oh, okay, here you go.' It\'s the
    same exact process."*

For the risk of experiencing an overpayment to create a disincentive to
work, beneficiaries must be aware of the costs and consequences of
overpayment situations, and must believe that there is a nontrivial risk
of experiencing those costs and consequences if they choose to work.
While numerous surveys and focus groups with beneficiaries provide
anecdotal evidence that beneficiaries fear losing cash and health
insurance benefits if they attempt to work,[^12] little information
regarding whether beneficiaries view the threat, or actual experience,
of an overpayment as a deterrent to work could be identified. According
to a staff member of an agency that provides legal services to
beneficiaries who recently testified before the Work Incentives Advisory
Panel, it is common for working beneficiaries to discontinue their work
effort after receipt of an overpayment notice (Cebula, 2003).

Economic theory would posit that the risk of overpayment and SSA's
inability to process work issues in a timely manner could create an
*incentive* to work for some beneficiaries. Overpayments are essentially
interest-free loans from the government that, typically, have rather
easy repayment terms. Savvy beneficiaries anticipating overpayments and
knowing that they will not be discovered for some time might be induced
to work and use the overpayment funds for some purpose that increases
their overall well-being, but with the knowledge and expectation that
they will be required to repay it someday. This is entirely theoretical
speculation, and no information, anecdotal or otherwise, could be
identified to support or refute such an hypothesis.

## C. The Ticket to Work Program

Under TTW, participating employment service providers, called Employment
Networks (ENs), assist eligible SSI and SSDI beneficiaries to go to
work, and receive payments if the beneficiary achieves specific earnings
targets.[^13] In order to receive payment from SSA, the EN must submit
evidence of the Ticket holder's monthly earnings. Such evidence
generally takes the form of employer pay stubs (originals or copies),
which are submitted by the EN to MAXIMUS, acting as the Ticket Program
Manager. The Ticket Program Manager certifies the earnings information
and enters it into SSA's administrative system. SSA is then responsible
for verifying the earnings information, making the appropriate
adjustment to benefits, and determining if payment to the EN is
warranted.

TTW adds a new stakeholder to the process of reporting earnings and
ensuring timely benefit adjustments -- the EN. Because EN payments are
entirely dependent on EN reporting of appropriate earnings information
and on the Ticket Program Manager and SSA processing that information,
ENs have a strong incentive to ensure that earnings are reported timely
and that benefits are adjusted appropriately for the Ticket holders that
they serve. The ability of ENs to generate revenue from TTW and to
recover costs associated with serving Ticket holders depends upon it.

Timely reporting and processing of earnings information is also
important under TTW given the Ticket eligibility criteria. One of the
requirements for eligibility to receive a Ticket is that the beneficiary
must be in cash benefit status. If SSA has not conducted work CDRs or
redeterminations in a timely manner, it is possible that it will issue
Tickets to beneficiaries who are already working and are, in actuality,
ineligible for TTW. SSA's policy regarding Ticket assignments made by
beneficiaries found, retroactively, to be ineligible for TTW because of
past work could not be confirmed in time for the final draft of this
paper. Only two undesirable scenarios appear possible, however: either
SSA invalidates the Ticket assignment, or SSA honors it. If SSA
invalidates the Ticket assignment retroactively, then the EN working
with the beneficiary will not be eligible for payments and will have
borne the cost of providing services up to the point where the Ticket
assignment was determined invalid. A policy such as this would place
even greater risk on ENs than the TTW outcome-based reimbursement system
already imposes. If SSA honors the Ticket assignment in such cases, then
SSA will be paying ENs for beneficiaries ineligible to assign Tickets,
thereby undermining the cost-effectiveness of the program.[^14]

## D. Summary

The timely reporting and processing of earnings information is essential
for a number of reasons:

-   From SSA's perspective, timely reporting and processing of earnings
    will reduce the likelihood of overpayments, which are costly and
    create an additional administrative burden on the program. It will
    also reduce the likelihood that ineligible beneficiaries receive and
    assign Tickets.

-   Overpayments are costly and burdensome to beneficiaries, as are
    sudden and unexpected terminations of eligibility for cash or health
    insurance benefits that may result from the untimely processing of
    earnings information. These types of "shocks," which are associated
    with increased earnings, might create substantial work disincentives
    for beneficiaries aware of the risks. Those unaware of the potential
    risk and consequences may not be making optimal decisions regarding
    their work effort. Timely feedback regarding the effect of earnings
    on benefits and eligibility is necessary for beneficiaries to be
    able to make rational and informed decisions.

-   From the EN perspective, timely reporting and processing of earnings
    information is necessary to obtain compensation for successfully
    serving clients under TTW.

# III. SSA Processing of Wage information

The sections below describe the status of wage reporting and processing.
A simplified overview of the process is first provided in ***Section
A***. Recent and planned changes to SSA's processes that affect wage
reporting and the risk of overpayments are presented in ***Section B***.
***Section C*** provides a discussion of the many challenges associated
with timely wage reporting and overpayment avoidance faced by SSA,
beneficiaries, and ENs.

## A. Overview of the Process

When SSA receives information on beneficiary earnings, there are a
number of steps and procedures that must be undertaken to verify the
earnings and make any necessary changes to benefit levels or eligibility
status. These steps include the following:

**Reporting earnings.** Beneficiaries, their representatives, or other
third parties can make work reports by various means: by phone to an SSA
teleservice center, field office, or program service center; by mail to
a field office or program service center; or in-person at a field
office. The initial earnings report may also come by way of the Ticket
Program Manager, from an EN submitting earnings evidence for purposes of
payment. SSA also undertakes periodic enforcement activities to identify
cases where earnings have not been reported to SSA. Annually, SSA data
are matched to IRS earnings data to identify potential earnings issues.
Cases meeting certain criteria are flagged and an alert is generated for
one of SSA's seven program service centers to further investigate and
develop the case. The program service centers frequently pass the case
onto the beneficiary's local field office for further development. SSA
also conducts similar enforcement activities for the SSI program on a
quarterly basis. Quarterly earnings information from the U.S. Department
of Health and Human Services, Office of Child Support Enforcement (OCSE)
is matched to SSA data on SSI recipients.[^15] Cases with earnings are
flagged for further investigation and development. SSA field office
staff in 29 states also have on-line access to the quarterly earnings
data, which may be used in the SSI redetermination process. Currently,
the quarterly OCSE data can only be used for the SSI program. SSA is
working on an agreement with OCSE to be able to use the data for the
SSDI program as well.

**Gathering, certifying, evaluating and posting the evidence.** When a
report of earnings is received, SSA must gather the appropriate evidence
to support the earnings allegation. A document presented as evidence of
earnings must be assessed to determine if it is an original, legible,
unaltered, and clearly identifies the beneficiary. If so, the document
is photocopied and certified by the SSA employee. Original statements
from employers or beneficiaries might also be submitted as evidence. The
SSA teleservice center, program service center, or field office staff
receiving the earnings report may mail out other forms for the
beneficiary to complete in order to collect the necessary information to
process the earnings report. The SSA staff member must also complete the
necessary forms and system inputs to establish a control for the PE
development.

The SSA employee will evaluate the evidence to determine whether it is
sufficient to meet SSA's standards for primary or secondary evidence.
Primary evidence is evidence that stands alone in establishing earnings,
and the source of the information is the employer. Primary evidence, in
order of highest-to-lowest probative value, includes: pay stubs (or
similar document) given to an employee as evidence of earnings;
employer-prepared wage statements; and oral statements of the employer
given to and documented by an SSA employee on the appropriate SSA form.
Secondary evidence is evidence with a lesser probative value and the
source of which is other than the employer. Examples of secondary
evidence, in order of highest-to-lowest value, include: records from
third-party sources (state unemployment insurance, unions); federal or
state tax returns; employee business records; and beneficiary statements
of earnings.

If the evidence submitted is not primary, the SSA employee must attempt
to develop it to primary evidence. In addition, the SSA employee must
ensure that the necessary information is contained in the evidence,
including: employee name; SSN; total earnings; period covered by the
earnings; pay date; and employer name, address or ID information. If
primary evidence is not available, the SSA employee must develop
acceptable secondary evidence. Further development of the evidence might
include requests for information, via mail or phone, to the employer
and/or beneficiary. The certified primary or secondary evidence is
posted in SSA's administrative system. The information must be keyed
into a series of evidence screens.

**Verifying countable earnings and making SGA determinations.** After
the earnings evidence is collected, it must be evaluated to determine if
there are any eligibility issues generated by the evidence. Such issues
might include the triggering of a TWP month, work or earnings above the
SGA level, or changes to SSI benefits. To make such determinations, the
countable earnings must first be verified. This means that any IRWEs,
BWEs, and wage subsidies must be taken into account. After countable
earnings are verified, the SSA employee can develop the case for TWP,
SGA, and continued eligibility for and level of benefits. In the SSDI
program, the development process is referred to as a work CDR. To make
the final determinations, the SSA employee must have the paper folder on
the case. These are typically stored at the program service centers, so
if the case is being developed by field office personnel, the folder
must be requested and sent. According to a recent GAO report, employees
in several field offices indicated that they often do not receive the
folders back from the program service centers in a timely manner.
Estimates of the time it took the program service center to return these
cases ranged from 1 to 10 years (GAO, 2002a).

Because of the work incentive provisions and eligibility requirements of
the SSI program, there is not the equivalent of a work CDR. Monthly SSI
benefits are dependent on monthly income. When monthly earnings (or
other income, resources, or living arrangements) change, monthly SSI
benefits must be adjusted. SSI cases undergo scheduled and/or
unscheduled redeterminations of financial eligibility. At the beginning
of a claim, or after a periodic post-eligibility review, SSI recipients
must estimate how much they will be paid each month for the next 14
months. SSI recipients experiencing changes in income must report those
changes to SSA by the 10^th^ day of the month following the change.
Benefits are generally not immediately adjusted, however, in response to
the reported information. Eventually, SSA will initiate a
redetermination of financial eligibility and will request proof to
verify that the estimate was accurate, collecting pay stubs or other
documentation from the beneficiary.[^16] The length of time before such
a scheduled request is made depends on the beneficiary's profile with
respect to reported changes, data matches indicating changes in income,
and SSA's assessment of the likelihood of a payment error.[^17]
Unscheduled redeterminations might also occur in response to a reported
change which affects eligibility or benefit amounts.

**Adjusting benefits/eligibility information on the administrative
record.** After the SSA employee has completed the process of assessing
the impact of the reported earnings on benefits and eligibility, the
outcomes of the work CDR and/or redetermination are posted to the
administrative record, and notifications of any changes to benefits or
eligibility status are generated and mailed to the beneficiary.

The above description grossly oversimplifies the actual process. There
are numerous administrative actions (e.g., forms sent, information
follow-up, diaries established to generate "tickles" for future actions)
that must be undertaken to fully process earnings reports and make
benefit adjustments. Some reports must be recorded on paper for storage
in the paper folder, while others are recorded electronically. In
general, reports for the SSI record are electronically stored, while
most SSDI reports must be processed on paper.

## B. Recent and Planned Changes Affecting Wage Reporting and Overpayments

### 1. Ticket to Work and Related Efforts

The Ticket to Work program has generated a number of changes that will
enhance and/or expedite the processing of earnings information, and
likely reduce the chances of overpayments.

#### a. The Integrated Disability Management System

SSA needed to develop a number of enhancements to its administrative
systems in order to accommodate TTW and the administration of the
disability programs, in general. The plan is referred to as the
Integrated Disability Management System (IDMS), the development of which
will occur in phases. In the first release of the new system, the CDR
Control File served as the foundation. This file, however, only
contained information on Ticket-eligible beneficiaries. In the second
systems release, which occurred in late November 2002, the Disability
Control File (DCF) became the foundation. The DCF covers *all* SSDI and
SSI disability beneficiaries, and contains information about Ticket
eligibility and use status as well as a variety of other data from SSA
administrative records needed to administer TTW.

Collecting and accurately documenting earnings information is critical
to the administration of TTW due to the nature of the EN payment system.
In the past, SSA systems have not facilitated this activity, and
historically there has been a lack of resources devoted to disability
work issue cases (discussed further below). The DCF will facilitate the
processing of earnings information because it will maintain earnings
information for both the SSI and SSDI programs in a single location. In
the long-term, the plan is for the DCF to further automate the work CDR
process, and allow only one work CDR to be operative at a time on a
case, thereby eliminating simultaneous development activities that might
occur by program service center and field office staff.

While the DCF represents progress, in its current release, there are
some limitations:

-   It is relatively "low tech." Earnings information must be entered in
    a screen-by-screen format without data synchronization. In other
    words, the same data (e.g., standard information from multiple,
    nearly identical pay stubs for a beneficiary) must be re-keyed over
    and over.

-   The DCF is not currently integrated for general workload processing.
    The focus in the current release is to enhance EN payment processes.
    It does not contain an electronic file for wage reporting that can
    easily be used for purposes of work CDRs or SSI redeterminations.

-   The DCF is not yet linked to the Modernized Return to Work (MRTW)
    software. MRTW, which is described further below, is a new software
    program that automates and simplifies the development of work CDRs.

The priorities for the first two releases of the IDMS were to establish
the most critical and basic functionality for SSA and the Ticket Program
Manager to be able to administer TTW. It is anticipated that the
capabilities of IDMS will continue to be developed and enhanced over
time. In the short-term, however, the DCF appears to be causing
difficulties for field staff. According to the recent testimony of an
American Federation of Government Employees (AFGE) official before the
Ticket to Work and Work Incentive Advisory Panel (Fehner, 2003) the DCF,
as implemented, is very cumbersome and hampering the processing of PE
workloads. She notes that, in addition to the complexities and
significant effort needed to process cases that existed prior to the
DCF, the DCF can add up to 150 additional screens that employees must
now navigate to complete the process. These screens are in addition to
the MRTW and the PC-CDR (another software program used to process work
CDRs), because the DCF is not currently integrated with these other
programs. According to this AFGE official, employees across the country
have complained about the complexity and time added to the process by
the DCF.

#### b. Ticket Program Manager

MAXIMUS, Inc. was contracted by SSA to act as the Ticket Program Manager
for a period of five years beginning in late September 2000. One of the
functions of the Ticket Program Manager is to certify the earnings
documentation submitted by ENs for purposes of EN payments. This
activity is typically conducted by SSA field office staff, but SSA's
General Council agreed that the Ticket Program Manager could act as an
agent of SSA and certify earnings to facilitate EN payments. Allowing
the Ticket Program Manager, a contractor, to conduct this function
represents a significant departure from past SSA practice.

The Ticket Program Manager collects and evaluates the earnings
information submitted by ENs in the same manner that SSA staff evaluate
and certify earnings documentation. The Ticket Program Manager attempts
to develop the evidence submitted by ENs to primary. After certification
of the evidence, the Ticket Program Manager posts the information to SSA
systems. SSA staff must then verify the earnings and make any necessary
benefit adjustments. If cash benefits are zero based on the verified
earnings, a code is passed to the Ticket Program Manager indicating
this, and the Ticket Program Manager is authorized to process outcome
payments to ENs.[^18]

The reporting of earnings by ENs to the Ticket Program Manager, and the
subsequent processing of the earnings information that must be done in
order for EN payment to be authorized, should significantly reduce the
likelihood of overpayments among the relatively small number of working
beneficiaries who are using their Tickets.

#### c. Resources for Working Beneficiaries

**Benefit Specialists.** Section 121 of the Ticket to Work and Work
Incentives Improvement Act authorized the creation and funding of
Benefits Planning, Assistance and Outreach (BPAO) programs. The purpose
of the BPAO initiative is to provide SSA disability beneficiaries with
***accurate*** and ***timely*** information about SSA work incentives
and other federal efforts to remove regulatory and programmatic barriers
to employment for persons with disabilities. Trained benefits
specialists in local BPAO programs work with individual beneficiaries to
explain the myriad of regulations, provisions, work incentives and
special programs that complicate an individual's decision to enter or
reenter the workforce. Where available, BPAOs request a Benefits
Planning Query from SSA (described further below) to help explain the
number of TWP months available and the effect of work on cash and health
insurance benefits and the effect on others in the family unit. BPAO
benefit specialists are not SSA employees, and are intended only to
provide information and counseling on work incentives and benefit
issues. They do not advocate on behalf of beneficiaries. BPAOs support
beneficiaries who choose to enter employment by assisting them in
complying with all relevant regulations and reporting procedures in an
effort to avoid overpayments and unexpected terminations in eligibility
for cash and health insurance benefits.

Benefit specialists receive two weeks of intensive training on work
incentive issues. The training is provided by one of three BPAO
Technical Assistance (TA) centers funded by SSA.[^19] After the initial
training, benefit specialists receive ongoing TA and support through
these centers. There are 116 BPAO programs now providing services to SSA
beneficiaries in all 50 states, the District of Columbia, and five
territories. Collectively, the 116 BPAO projects employ over 400 benefit
specialists, and have served over 30,000 beneficiaries since
implementation in early 2001. The BPAO projects represent a new and
significant resource available to beneficiaries for information and
guidance on work and disability benefit issues.

**Employment Support Representatives.** Section 121 of the Ticket to
Work and Work Incentives Improvement Act (now Section 1149 of The Social
Security Act) also mandated that SSA "...establish a corps of trained,
accessible and responsive work incentives specialists..." to assist
beneficiaries with disabilities who want to start or continue working.
In response to this mandate, SSA piloted a new, temporary position, the
Employment Support Representative (ESR), with 32 ESRs serving 54 sites
nationally.

The ESR pilot was conducted from July 2000 until September 2001. ESRs
were selected from among GS 11 claims representatives, underwent six
weeks of intensive training on SSA work incentive provisions and related
issues, and received a promotion to the temporary GS 12 ESR position. In
addition to the role of providing beneficiaries information about work
incentive provisions, the 32 ESRs were tasked with conducting outreach
and providing information to the general disability community. The ESR
pilot ended in September 2001 and was considered a success (SSA, 2001c).

SSA is considering how to best provide information and services related
to SSA's employment support programs to beneficiaries with disabilities
who want to work, nationally. One plan that SSA is considering includes,
among other things, improving SSA field personnel knowledge about SSA's
employment support programs through training, designating specific GS-12
SSA field personnel, using existing work incentive liaisons located in
field offices to provide the work incentives information, program
expertise, and case processing knowledge needed in the local field
offices, and using existing public affairs specialists to fulfill the
outreach role previously filled by ESRs. Of the 32 original ESRs, 21 are
still functioning in that capacity, although the specific role of an ESR
varies depending on the needs of the office in which the ESR is located.
Currently, when an individual vacates the ESR position for one reason or
another, the position expires.

#### d. Modernized Return to Work Software

Recently, SSA has developed the Modernized Return to Work (MRTW)
software to collect and process information about SSDI beneficiary work
and earnings. MRTW was developed by staff at SSA's Chicago Regional
Office, in collaboration with Minnesota and Wisconsin-based SSA staff,
as a means to improve development, control, and accuracy and to reduce
the burden and complexity of work CDRs. The software automates the
generation of forms verifying monthly earnings mailed to beneficiaries
and employers. The software totals earnings if a beneficiary has
multiple employers, computes gross earnings, and applies SGA adjustments
and special conditions to derive total countable earnings per month and
year. This amount is then sent to other software, the Personal
Computer-Continuing Disability Review (PC-CDR) that calculates TWP, SGA,
EPE months, and generates notices for field personnel.

MRTW is expected to greatly improve the process for developing and
documenting beneficiary work issues and will provide a place to store
monthly earnings information, which can be transferred to other
administrative files. According to one ESR who has been using MRTW, the
software significantly reduces the time it takes for field office staff
to do a work CDR (by up to 2 hours per case). MRTW can also provide a
means to measure the workload related to documenting work issues to
appropriately measure work credits. The primary drawback of MRTW is that
it was developed for use only on SSDI claims. The reason for this is
that the SSI earnings documentation is based on a definition of wages
when paid and the wage verification process was already mostly
automated, whereas, the process for SSDI cases is based on a definition
of wages when earned and the recording process is almost entirely
manual.

The Benefits Planning Query function of MRTW allows easy access to
information about work, earnings, and benefit status. The query pulls
the necessary information from the Master Beneficiary Record and, in the
future, from the DCF. While some of the work incentive-related
information on the Master Beneficiary Record is often incomplete and
outdated (due to delays in work CDR processing and other challenges
described in the next section), it is still better than no information
at all. It is expected that the DCF will be more up to date. BPAO staff,
ENs, and others familiar with the Benefits Planning Query have begun
requesting and making use of the Benefits Planning Query information in
assisting their clients with benefits planning and TTW issues.

The MRTW was piloted among the 32 ESRs in October 2001, and was made
available for optional use by all field offices in August 2002.
Currently, it is only being utilized in a very limited fashion.
Widespread use of MRTW has likely been hampered by the fact that field
staff are now told that they must enter earnings information into the
DCF. Because MRTW and the DCF are not integrated, field staff would need
to enter all of the earnings information twice. Currently, use of the
DCF is mandatory while use of MRTW is optional.

### 2. SSI Redeterminations and the Special Disability Workload

Since designation as a high-risk program by GAO in 1997, the SSI program
has undertaken a number of initiatives to address the problem of
overpayments. One such effort has been to increase the number of SSI
redeterminations processed and to improve the profiles that are used to
select cases for review (SSA, 2003b). In 2001, SSA conducted
approximately 360,000 (or about 14%) more redeterminations than it
conducted in 1998 (SSA, 2003b). According to another source, SSA has
also begun requiring field offices to complete 99% of assigned SSI
redetermination reviews and cases where computer matching identifies a
potential overpayment due to unreported wages and other factors (GAO,
2002c).

In 2002, SSA began a concerted effort to process what is referred to as
the Special Title II Disability Workload. The Special Disability
Workload is comprised of over 500,000 SSI-only recipients who, at some
point, became eligible for SSDI. The SSI administrative systems,
however, failed to identify these situations and generate appropriate
alerts for case processing. According to one source, SSA has been aware
of this situation for over seven years, but has been either unwilling or
unable to address it until recently (AFGE, 2002). SSA is now focusing
resources on the processing of this workload.

### 3. Access to Electronic Earnings Data

During the past several years, SSA has increased its access to
electronic data on earnings (as well as other financial information),
and increased its use of the electronic data for purposes of detecting
and addressing overpayments. Examples of these activities include the
following (GAO, 2003a):

-   Developing and implementing software that scans internal and
    external databases for financial/employment information to detect
    potential changes, then generates alerts for further investigation;

-   Establishing direct field office access to OCSE earnings data and
    state administrative records in 42 states; and

-   Increasing the frequency of matching SSI reported earnings
    information to the Master Earnings Record information from annually
    to semi-annually, to flag unreported earnings.

As noted previously, SSA can only use the OCSE earnings data for
purposes of SSI program enforcement, but is in the process of
negotiating use of these data for purposes of SSDI program enforcement.
According to an SSA official, the agency has submitted a scope agreement
to OCSE and expects to gain the ability to conduct quarterly batch data
matches in about one year. This official also notes that 29 states have
already granted SSA various levels of on-line access to quarterly state
earnings records. Use of these data, however, are at the option of the
SSA field offices in those states.

Finally, a number of sources (GAO, 2003a; SSA, 2002; SSA, 2003) describe
an SSA effort to pilot test telephone touchtone technology as a means to
improve wage and income reporting in the SSI program. The SSI Automated
Wage Reporting Pilot will be conducted from May 2003 through October
2003. Beginning in May, a limited number of SSI recipients and deemors
will be able to report wages by using a special toll-free telephone
number. Potential pilot participants will be selected from a group of
SSI recipients being canvassed nationwide. Beginning in late March and
early April 2003, potential pilot participants will receive a contact
letter from their local field offices. The letter advises the recipient
that he/she has been chosen to help SSA test a new program for people
who work and receive SSI. It directs individuals who would like to
participate in the test to call the local field office. The local field
office telephone number will be provided in the letter. Field offices
will provide the pilot participants with more details about the pilot
either by mail or during an in-office visit. A total of 326 field
offices and approximately 4,000 recipients/deemors will be selected to
participate in the pilot.

All individuals selected will need a pin and password to participate in
the pilot. SSI pilot participants will be able to use password services
beginning in early April 2003. Once callers have created a password,
they will be ready to report their monthly gross wages, in dollars and
cents, before deductions. The field office will train participants on
using SSA\'s pin and password system and the new SSI automated wage
reporting system.

Pilot participants who have obtained a pin and password and wish to use
the automated wage reporting system will:

1.  Dial the toll-free number (1-866-929-2437);

2.  Enter an SSN (pin) and password;

3.  Enter the monthly gross wages, in dollars and cents, before
    deductions;

4.  Verify the amount entered. The system will repeat the amount of
    wages it has recorded and ask the caller if this amount is correct;
    and

5.  Confirm the amount of wages the system has recorded by either saying
    \"yes\" or by pressing the number \"1\" on the telephone keypad. If
    the caller is not able to confirm the wages, the system will direct
    him/her to re-enter the amount of wages. The caller will then be
    asked to verify and confirm the amount of wages re-entered.

The wages will automatically be posted to SSA's systems by the next day.

## C. Challenges to Timely Wage Reporting and Overpayment Avoidance

### 1. Challenges from the SSA Perspective

SSA faces a number of significant challenges in it's efforts to process
earnings information and make timely post-entitlement (PE) decisions
regarding benefit levels and eligibility for SSI and SSDI beneficiaries
who work.

#### a. Complex Program Rules with Respect to the Treatment of Earnings

The rules and regulations governing the SSI and SSDI programs are
complex. The complexity makes the processing of earnings information
that might affect benefits or eligibility difficult. The program
complexities associated with work effort and earnings imply that a
substantial level of knowledge is required on the part of the SSA
employee to accurately process the information. Examples of the
complexity related to the processing of earnings information are
described below.

**Differing, and sometimes inconsistent, rules governing SSI and SSDI**.
The work incentive and eligibility provisions of the two disability
programs differ greatly. The effect of an additional dollar of earnings
in one program is entirely different than in the other, and also depends
on the level of earnings at which the additional dollar is earned. SSI
benefits are reduced \$1 for every \$2 of earnings after a \$65 earned
income exclusion and \$20 general income exclusion. Benefits under SSDI
remain unaffected by work until work is above the level of SGA, then are
terminated altogether if earnings exceed SGA after a nine-month TWP has
been completed. Another complication is the fact that "earnings" are
defined differently across the two programs. For SSI, the date when
wages were *paid* is of relevance to benefits and eligibility, whereas
the period when wages were *earned* is relevant for SSDI eligibility.
Concurrent beneficiaries (those receiving both SSI and SSDI benefits)
are subject to both sets of rules and the interaction of the rules of
the two programs compounds the complexity of trying to assess the effect
of earnings on benefits and eligibility. Failure to recognize that a
working SSI recipient has become eligible for SSDI is an important
example, and the effect that loss of SSDI eligibility might have on SSI
payments to concurrent beneficiaries is another. The Special Disability
Workload and the complexities between the two programs create an
atmosphere of confusion, and unnecessary mistrust that SSA's outreach
messages regarding return-to-work supports cannot be relied upon.

**Numerous factors must be taken into account in making PE
determinations based on changes in earnings.** SSA employees must be
knowledgeable about a complex set of work incentive provisions that
affect benefits and eligibility and must know the circumstances and
processes for collecting and applying information related to the
numerous provisions. For example, CRs must be knowledgeable about:
IRWEs; BWEs; subsidies, unincurred business expenses, student earned
income exclusions; 1619(b) provisions that differ across states, may
differ by individual, and change annually; TWP, blind versus non-blind
SGA, and 1619(a) earnings levels that change annually; and PASS. While
SSA is able to recognize an SSI recipient with statutory blindness, it
is unable to easily identify an SSDI blind case without the paper folder
and a trained eye to seek the information. Blind SSDI beneficiaries, in
most cases, must proactively identify themselves to SSA in order for the
blind SGA levels to be applied during the work CDR process. This creates
confusion in counseling and in processing wage reports and overpayments,
as depicted in Overpayment Scenario #4 (***Section III***). In addition,
SSA does not have a systematic mechanism for collecting information on
IRWEs, subsidies, and unincurred business expenses in the SSDI program
on an on-going basis as they accrue. This information is frequently not
collected or taken into account until after an overpayment notice has
been mailed to the beneficiary. All of these factors add difficulty to
the processing of work activity information in a timely manner.

**Earnings at any time since benefit award, and in some cases, lifetime
earnings, must be taken into account to assess current eligibility and
benefits.** For SSDI, one must determine that nine TWP months have been
achieved within a five-year period before benefits are terminated due to
work above SGA. For SSI, recipients who work under the SSI work
incentive provisions may achieve SSDI insured status, which is dependent
on the age of the beneficiary, lifetime earnings, and recent earnings.
If working below SGA at the time SSDI insured status is achieved, the
resulting SSDI benefits will affect SSI eligibility and benefits. If
working above SGA, the attainment of SSDI insured status will have no
impact on SSI eligibility or benefits.

#### b. Monthly Accounting

The monthly accounting used to determine eligibility and benefit levels
in the disability programs creates a considerable burden on SSA staff,
particularly with respect to the SSI program. The SSI program considers
a person's monthly income to determine monthly benefits, and counts all
income, including wages, when it is paid. As discussed previously, SSI
recipients must estimate how much they will be paid each month for the
next 14 months, and then subsequently submit evidence supporting the
accuracy of the estimate. As SSI redeterminations frequently cover a
period of 12 months or longer, SSA staff must review numerous pay stubs
and other information to compute the exact level of income for each and
every month during the period, based on the pay dates of the reported
income sources.

This is further complicated if the monthly income of a working SSI
recipient is paid biweekly on Fridays. Monthly income may vary depending
on when the pay days fall each month. Generally, under these
circumstances, the SSI recipient will receive three pay checks (instead
of two) during two months in each year. All else constant, this will
cause the computed SSI benefits for two of the months to be
substantially less than the SSI benefits computed for all other months
of the year. Thus, this accounting complexity also results in an uneven
stream of SSI benefits.

#### c. Limited Automation and Labor-Intensive Administrative Processes

SSA employees presented with evidence of earnings must not only
understand the complicated rules and regulations governing the programs,
but must also be capable of undertaking the administrative actions
necessary to fully process the information. The processes are, to a
large extent, paper-driven, and require the beneficiary's permanent
paper folder in order to be fully implemented. Procedures illustrating
the paper-driven, labor intensity of the process include the following:

-   The photocopying of pay stubs or other earnings documentation, then
    having to manually enter the information from each pay stub into SSA
    systems;

-   The need for field office staff to retrieve paper folders from the
    program service centers in order to develop work CDRs;

-   Earnings information must be entered twice for concurrent
    beneficiaries, once in the SSI administrative system and once in the
    SSDI administrative system. In addition, earnings information from
    the same paycheck must be defined twice to determine when paid for
    SSI and when earned for SSDI.

-   If the earnings information is ambiguous or incomplete, paper forms
    are sent to beneficiaries and/or employers requesting additional
    information. Follow-up, by phone and/or mail, on requested
    information not returned must also be undertaken and all follow-up
    attempts and contacts are to be documented.

-   While computations are automated to a large degree for the SSI
    program, the process for conducting a work CDR in the SSDI program
    is largely manual.[^20] SSA claims representatives use pencil and
    paper to evaluate many months or years of earnings information to
    determine when TWPs, EPEs, and eligibility for cash benefits
    started, ended, and/or re-started. According to one SSA interviewee,
    a typical work CDR generally takes several hours to complete.

The independence of the SSI and SSDI administrative systems also
contributes to overpayments to concurrent beneficiaries in response to
increases in earnings. As depicted in Overpayment Scenario 2 (***Section
II***), beneficiaries might report their earnings, but the information
might only be entered and processed in one system and not the other. In
addition, bifurcation of the two programs is a contributing factor to
the Special Disability Workload currently faced by SSA. As noted above,
the Special Disability Workload is comprised of over 500,000 SSI-only
recipients who, at some point, became eligible for SSDI. The SSI
administrative systems, however, failed to identify these situations and
generate appropriate alerts for case processing. The consequences for
some of these beneficiaries is depicted in Overpayment Scenario 3
(***Section II***). The retroactive eligibility and benefit
determination can result in a sudden and unexpected loss of eligibility
for both programs, loss of the associated Medicare and Medicaid
benefits, and an overpayment liability, all as a consequence of work and
earnings information not being processed appropriately.

#### d. Limited Resources, Diffused Responsibility, and Competing Priorities

Processing earnings reports and making timely adjustments to benefits
can take a back seat to other tasks that must be completed by SSA
employees. For several years, the concern has been voiced that the
resources allocated to administer SSA programs is insufficient.[^21] At
the same time, the agency continues to down-size its workforce. Work
CDRs and SSI redeterminations simply do not occur as frequently as they
should because there is insufficient staff to devote to those activities
in light of other workload priorities. The low priority of the PE
workload has been attributed to several factors:

-   Performance standards, similar to those established for initial
    claims defined in terms of processing time and decision accuracy, do
    not exist for this workload.

-   The workload is not accurately measured and reflected in SSA's
    systems used to measure productivity and estimate ongoing resource
    needs. Historically, no work credit is given to a field office for
    an SSDI work CDR unless SGA and/or TWP actions are taken and
    documented in the system. It can take many months for these types of
    documentations to occur, but at the same time, field office staff
    have spent time working the cases and developing the work-related
    issues. This time is not accurately reflected in the current work
    measurement system. The absence of systematic information on this
    workload has kept it "hidden" from SSA management staff.

-   Responsibility for various aspects of the workload is spread across
    numerous entities (teleservice centers, field offices, program
    service centers) and no single unit or individual is held
    accountable.

-   SSA is frequently "fighting fires." In other words, resources are
    frequently diverted and focused on whatever the pressing issue of
    the moment may be (as defined by Congress, GAO, and/or upper SSA
    management).

Findings from a recent survey of SSA management, conducted by the
National Council of Social Security Management Associations (NCSSMA,
2002), support these assertions and indicate some of the frustration and
dissatisfaction experienced by field staff with respect to their ability
to adequately perform their jobs and provide quality service to the
public. Among the findings were the following:

-   96% of respondents believed that SSA's downsizing of management has
    had a significant and negative impact on the quality and accuracy of
    the work performed.

-   92% of respondents believed that SSA's work measurement system fails
    to reflect the amount of work accomplished and the staff required to
    achieve agency service goals.

-   94% of respondents believed that SSA headquarters is out of touch
    with the field and unaware of, or not interested in, the problems
    being experienced in the field.

Some respondents provided comments that further reflect the extent of
the frustration on the part of field office managers with the lack of
appropriate resources:

> "HELP! We continue to drown in ever increasing workloads. We turn our
> attention to the latest priority workload and then are castigated for
> letting another workload slip. Once in a while someone above our level
> recognizes that we don't have enough people to even do an adequate
> job, but in the next breath they can't believe that we haven't met the
> redetermination goal yet and we are blamed for not being effective
> managers. Effective managers? We need magicians!" (p. 34).
>
> "If field offices are in existence to provide service to the public we
> are missing our mark. Field offices are not staffed to serve the
> customers. They are staffed according to the amount of work completed
> in the previous year. These are 2 very different things. The majority
> of field offices have severe backlogs in post entitlement workloads
> that remain on the back burner since so much emphasis is on processing
> claims and workloads which have a definitive goal and a workload count
> attached to them. The public is not served using this approach." (p.
> 31).

Over the past few years, SSA has made a significant effort to allocate
resources towards the timely processing of SSI redeterminations. The
agency set high targets for performance, and field staff responded. As a
result of these, and other efforts, SSI was removed from GAO's list of
high-risk programs. The PE workloads under the SSDI program, however,
have not been subject to the same level of scrutiny. One reason for this
may be that very little information is available regarding the status of
this workload. Because the process is primarily manual until the very
last stages of development, it cannot be easily measured or monitored,
and existing measures are relatively meaningless. The fact that SSDI PE
workloads cannot be accurately measured or monitored makes them easy to
ignore relative to other workloads that are more closely tracked. With
TTW, this may be changing, but only on a case-by-case basis. When an EN
submits a claim for an outcome payment, SSA must process the outstanding
work CDR issues to make a determination that cash benefits have been
reduced to zero before the EN can be paid. According to SSA officials,
cases where ENs have submitted payment claims do not receive any special
or expedited treatment; they are processed in the same manner as other
PE workloads. In actuality, however, because SSA Office of Employment
Support Programs staff are monitoring and following up on the status of
the case, the case will be processed more quickly. SSA regional office
staff note that they have been heavily involved in Ticket payment cases
and in encouraging field offices to develop work issues and verify
earnings on the DCF in a timely manner. While there are still not a
large number of Ticket payment cases that need field office
intervention, regional office staff note that the cases that do need
field office actions are usually quite complex and involve several
avenues of development and large outlays of field office staff time. The
very newness of the EN payment system on the DCF makes each case very
labor intensive in researching all the necessary actions to take on the
various systems once the beneficiary has begun to work.

#### e. Knowledge, Culture, and Perception of Issues Facing Working Beneficiaries

Historically, SSA's culture has not supported beneficiary return-to-work
efforts. The disability programs operate on the premise that those
eligible are unable to work at substantial levels. The nature of the
programs has focused on providing income support and access to health
insurance in a manner akin to the Social Security old age programs, but
not other supports that might assist a beneficiary in achieving greater
self-sufficiency. Other types of supports have been under the purview of
other health and human service agencies. SSA is an agency established to
evaluate information, determine eligibility, and issue checks. It is not
equipped to address the myriad of life-altering events that have
implications for the self-sufficiency of people with significant
disabilities. SSA CRs and other staff are not case managers. They
process claims based on the rules and regulations of the program.

The narrow function of SSA, along with the rules and regulations under
which the disability programs operate, can engender attitudes and
perceptions among SSA staff who deal with the public, attitudes that are
not supportive of beneficiary work efforts. Perceptions personally
encountered over the past ten years in working on issues related to the
programs include the following:

-   Once on the disability programs, few leave.

-   Few beneficiaries, particularly those in the SSDI program, work.
    Only a tiny percentage of SSDI beneficiaries who do work will do so
    at levels that will affect their eligibility for benefits.

-   Beneficiaries who attempt to obtain information about work incentive
    provisions, to maximize the use of those provisions, and to work and
    keep their benefits, are "gaming" the system.

-   Overpayments happen because beneficiaries purposefully don't report
    their earnings.

The perceptions of the field staff processing beneficiary information
are important in light of the challenges noted above: program
complexity, limited automation, limited resources, unmonitored
workloads, and competing priorities. If beneficiary work is perceived as
an infrequent event that seldom has significant consequences for
eligibility, then the perceived importance of developing an in-depth
knowledge of the work incentive provisions, and the importance of
collecting and processing earnings information in a timely manner will
be diminished.

Two examples illustrate how attitudes, combined with the everyday
realities of being under-staffed and having to juggle competing
priorities, work to perpetuate overpayment situations:

-   According to one SSA interviewee, many SSDI CRs believe that they do
    not need wage information to be reported on a regular basis from
    SSDI beneficiaries. The term used for those who report their monthly
    earnings is "over-reporters." These beneficiaries are frequently
    told by CRs to "come back and see me in a year."

-   According to another interviewee, SSI recipients who were reporting
    their monthly earnings to their local field office received letters
    from the field office telling them that they need not continue to
    report their earnings each month, and that they will be contacted by
    SSA in a year for further information.

It is certainly true that reporting earnings monthly may be unnecessary
in many cases because the amounts reported will not change eligibility
or benefits. But how can a beneficiary or CR know that in advance? The
message inherent in these examples is that reporting earnings timely is
not important because SSA cannot, will not, or need not do anything with
the information anyway. If CRs and other SSA staff with whom
beneficiaries interact to report earnings project the attitude that such
reporting is unnecessary, why should beneficiaries bother to undertake
the burden of timely reporting?

#### f. Ticket to Work EN Payments[^22]

The outcome payment system for ENs under TTW presents a challenge for
SSA. The primary difficulty is determining the point where disability
benefits equal zero. This is difficult for all of the reasons noted
above related to the processing of earnings information and adjusting
benefits and eligibility status appropriately. It is particularly
difficult for SSDI beneficiaries, because of factors such as expedited
reinstatement, provisional payments, the TWP, and discrepancies between
actual payments and what should have been paid (i.e., adjustments for
past overpayments and underpayments). Retroactive payment adjustments
are often made to the Master Beneficiary Record, changing payment
history to reflect what it should have been, rather than what was
actually paid, further complicating the EN payment process. The EN
payment system cannot handle over- and under-payments automatically; it
must be done manually, so that dealing with a beneficiary's over- and
under-payments can be problematic, especially if there are a large
number. Given the low priority that SSA has placed on the processing of
the PE workload in the past, it is likely that over- and under-payments
will be encountered frequently in the processing of EN payments under
TTW, at least initially.

The interaction between SSDI and SSI payments for concurrent
beneficiaries is another complicating factor. When SSDI benefits cease
because of work or earnings, SSI benefits increase in many cases. SSA
has had to develop an approach to integrate SSDI and SSI earnings and
payment postings. This enhancement to the EN payment system was
implemented with the second release of the IDMS in late November 2002,
but still requires dual entry of the same earnings data.

### 2. Challenges from the Beneficiary Perspective

Beneficiaries face their own set of challenges to ensuring the timely
reporting and processing of earnings information. The challenges
described below are compounded by disability-related difficulties SSI
and SSDI beneficiaries are faced with in their everyday lives.
Navigating SSA's administrative processes and understanding and
complying with complex program requirements can be a significant
challenge for many beneficiaries whose impairments affect their
cognitive and communication skills. It may also be a challenge for many
to devote the necessary time and effort required, especially if they are
taking on the added effort of work.

#### a. Understanding Evidence and Processing Requirements and Work Incentive Provisions

Beneficiaries are told that they must report changes in their earnings
to SSA. SSI recipients are required to report any changes in income or
living arrangements within 10 calendar days after the end of the month
the event or change occurred. But what does "reporting" mean, exactly?
In theory, a beneficiary can simply call SSA's 800 number, report the
information, and this should trigger a series of follow-up actions on
SSA's part to collect and document the alleged earnings with the
appropriate evidence. In reality, the process is very labor intensive,
and full of opportunities for the necessary steps to be done improperly,
overlooked, or ignored by the many different entities that might be
involved in the process (beneficiaries, employers, and teleservice
center, field office, and program service center staff), especially in
light of more pressing workload issues faced by SSA employees. If
beneficiaries understand the evidence requirements, and how and when it
is best to submit the evidence, the likelihood of the information being
appropriately processed might improve.

In addition, SSDI beneficiaries lack a formal and regular mechanism for
reporting IRWEs, subsidies, and unincurred business expenses, if
applicable. While beneficiaries are told they must report earnings,
until an overpayment is experienced, they are frequently unaware of
these work incentive provisions or the need to document them. Once the
overpayment is experienced, it may be difficult to reconstruct many
years of history and obtain the information necessary to accurately take
into account these work incentive provisions.

Finally, beneficiaries currently do not receive any manner of receipt or
confirmation of reported earnings, except for the work reports that are
recorded in the MRTW. The pending H.R. 743 (Social Security Protection
Act of 2003) would require SSA to issue a receipt when a person
receiving disability benefits reports work or changes in earnings. The
current lack of any documentation of this sort makes it impossible for
beneficiaries to know for certain that the information reported has been
recorded and acknowledged by SSA.

#### b. Accurately Estimating Monthly Income

As discussed previously, SSI recipients must estimate how much they will
be paid each month for the next 14 months, and then subsequently submit
evidence supporting the accuracy of the estimate. Ideally, variations in
monthly income (for example, the variation due to biweekly pay dates)
will cancel out monthly benefit over- and underpayments over the course
of the year. Poor estimates of monthly income and/or unexpected changes
to income, resources, or living arrangements can, however, lead to
significant net over- or underpayments at the next redetermination.

#### c. Taking Appropriate Follow-up Actions

Many beneficiaries fail to take appropriate follow-up actions or to
remain persistent in pursuing the resolution of a suspected overpayment.
According to one benefit specialist, beneficiaries frequently assume
that, if they have appropriately reported their earnings and they
continue to receive benefit checks, that they must be entitled to them
because SSA should know what it is doing. Because beneficiaries often
believe that SSA staff know what they are doing and are providing
accurate information, they are not diligent about documenting their
interactions with SSA in writing, directing inquiries to specific
personnel, or requesting written responses or other documentation from
the SSA staff with whom they interact. Taking the appropriate follow-up
actions may require a significant amount of effort, but more
importantly, it also requires a substantial familiarity with the
programs' work incentive and eligibility provisions to even be able to
discern when benefit receipt is inappropriate and follow-up is
necessary.

### 3. Challenges from the EN Perspective[^23]

The requirement that ENs track and report the earnings of the clients
they are serving, and seeking payment for, under TTW presents a few
challenges for ENs.

#### a. Tracking Earnings

According to information collected during TTW process evaluation
interviews with staff from all state VR agencies and 27 ENs operating in
the 13 Phase 1 states, interviewees from about half of the ENs reported
significant concerns about the feasibility and/or appropriateness of
tracking client earnings:

-   Some considered the tracking requirements invasive of the client's
    privacy, believing it inappropriate to require the client to report
    earnings to the EN for such a long period of time (as long as 60
    non-consecutive months), and also believing that clients will have
    little interest in doing so.

```{=html}
<!-- -->
```
-   Others were concerned about the administrative burden posed by the
    tracking requirement. Some noted that, when sufficient payments are
    received as TTW matures, they will consider hiring additional staff
    to perform tracking and other administrative activities.

We found widespread concern among interviewees about the ability of ENs
and state VR agencies to obtain the documentation that SSA requires to
verify earnings, and concerns that delays in obtaining the documentation
would result in lengthy payment delays. One EN interviewee noted that,
despite the fact that her organization pays TTW clients \$25 to submit
the earnings documentation each month, it has encountered difficulty
obtaining the information from some clients. According to another EN, on
two occasions, TTW clients have quit their jobs when asked for their pay
stubs, due to a fear of losing their benefits.

Perceptions regarding the feasibility and anticipated level of effort
required to track earnings varied. Several EN interviewees reported that
their existing systems would support, or could be modified to support,
the long-term earnings tracking requirements of TTW. The systems of
several ENs were built to track earnings for only 90 days, the period
typically necessary for payment for services delivered to clients
referred by state VR agencies.

Some of the approaches that have been adopted by ENs for collecting the
information from beneficiaries include:

-   Aggressive pursuit of wage information, generally by telephone,
    through both the employee and employers.

-   Contract stipulations with Ticket holders that require TTW clients
    to provide the necessary wage documentation. Clients might also be
    asked to sign a release that allows the EN to obtain earnings
    information directly from employers.

```{=html}
<!-- -->
```
-   Payment to beneficiaries for reporting the required evidence. One
    example is the EN noted above that pays beneficiaries \$25 for
    submission of the required evidence each month.

-   Notifying beneficiaries that refusal to submit the required
    information is a violation of federal law, as well as notifying
    employers from whom the information is requested that failure to
    comply is a violation of federal law.

#### b. Understanding Evidence Requirements

Ticket Program Manager staff members responsible for processing EN
claims report experiencing some difficulty conveying to EN staff the
particulars regarding earnings evidence requirements, including the
difference between primary and secondary evidence, and the required
elements of each. For example, some VR agencies have stated that they
only have quarterly earnings from state Unemployment Insurance data to
submit. While such data provide secondary evidence of earnings,
additional investigative development is required to verify earnings by
SSA, which will delay payment. ENs are being encouraged by the Ticket
Program Manager to meet the requirements for primary evidence in order
to expedite payment. With respect to primary earnings evidence, one
issue that often must be addressed is the fact that pay stubs may not
contain all of the information necessary for SSA to process the claim.
The subtle differences in how wages are defined under SSI and SSDI (paid
vs. earned), and the fact that employer pay stubs do not always reflect
both pieces of information, complicate the EN payment process even when
ENs have been diligent about collecting the earnings information from
beneficiaries.

Interviewees at three ENs that had, at the time of our interviews,
submitted claims for payment expressed dissatisfaction with the duration
of time required for payment processing. Staff at two ENs reported
receiving payment about 120 days after filing a claim. They indicated
that they had been told to expect payment in 60 to 90 days. Interviewees
believed that four months is far too long to process EN payments and
that it is imperative that SSA rectify this problem for TTW to succeed.
Staff of two other ENs that had participated previously in the AP
program said their experience with that program does not promote
confidence that payments will be made expeditiously or in a manner
consistent with program requirements.[^24]

Ticket Program Manager staff note that the EN payment process has been
slow because:

-   The first claims submitted by an EN are generally difficult because
    of the EN's inexperience with the process and lack of knowledge of
    SSA's information needs to certify evidence as primary.

-   The first payment for each beneficiary is often difficult and time
    consuming because retroactive adjustments to a beneficiary's record
    may be necessary. The process becomes much easier after the first
    payment for a particular beneficiary.

In an attempt to alleviate problems and shorten the long delay for
claims processing, the Ticket Program Manager is suggesting that ENs
tell beneficiaries to contact their SSA field offices and submit
employment information before the EN submits the first payment request.
In order for SSA to adjust benefits in response to earnings information,
beneficiaries must report their employment status and earnings to SSA.
Reports of earnings to the EN do not replace the requirement that
beneficiaries report earnings to SSA directly. This added reporting
burden for the beneficiary increases the reporting requirement confusion
and the likelihood that one or the other report will not be filed.

# IV. Suggestions for Improvements

There are numerous challenges associated with ensuring timely reporting
and processing of earnings information. Below, several actions that SSA
might undertake are proposed, with the goal of reducing the challenges
associated with reporting and processing earnings and reducing the risk
of overpayments. The suggested actions include the following:

-   Facilitate and increase the use of available electronic quarterly
    earnings information by adopting a uniform definition of earnings,
    simplifying the evidence requirements, and wage averaging;

-   Centralize work CDR processing in cadres similar to PASS and Special
    Disability Workload Cadres;

-   Expand the formats for reporting earnings and for providing timely
    feedback on the potential impact of earnings on benefits and
    eligibility;

-   Limit the overpayment liability for beneficiaries who have
    appropriately reported their earnings;

-   Increase beneficiary awareness of reporting requirements and promote
    greater self-efficacy;

-   Establish mechanisms to monitor PE workloads, develop performance
    standards, and allocate sufficient resources to address PE
    workloads; and

-   Establish a cross-component PE task force to analyze PE issues
    holistically, identify and prioritize the areas of needed
    improvement, develop and implement solutions, and be held
    accountable for monitoring and reporting on the progress and impacts
    of the changes.

##  A. Facilitate and Increase the Use of Readily Available Earnings Data

As noted in previous sections, SSA has been engaged in numerous efforts
to increase the use of electronic quarterly earnings data and improve
automation so that unreported work activity and earnings that affect
eligibility and benefits will be identified and processed more quickly.
While these activities have generally been undertaken under the heading
of "enforcement" and "overpayment detection and recovery," the processes
developed could form the basis for more general PE workload processing
procedures in the future. Given the current, labor-intensive and
burdensome nature of wage reporting and processing requirements, an
obvious way to improve upon the process would be to increase the use of
existing sources of information on wages, and to automate the process as
much as possible. There are two significant obstacles that must be
overcome, however, before SSA can make any substantial progress towards
the unification of the disability programs, the use of electronic
earnings data, and greater automation of PE workloads. The first relates
to the separate earnings definitions used in the SSI and SSDI programs.
The second relates to SSA's reliance on exact monthly earnings amounts
for eligibility and benefit determinations.

### 1. Uniform Definition of Earnings

The SSI and SSDI policy differences related to the counting of wages
creates unnecessary complexity and administrative burden. SSI policy
requires that wages be counted when received, regardless of when earned.
SSDI policy indicates that wages, as a measure of work activity, are to
be counted based on when the work is performed, regardless of when the
wages are received. The source of the "paid vs. earned" difference
arises from the difference in how wages affect the payment calculation
for SSI, versus the SGA determinations required for SSDI.

Adopting a uniform definition of wages for both programs, and basing
that definition on when wages are *paid*, has several advantages:

-   Information routinely reported by employers, and used by SSA,
    reflects wages *paid*. All of the electronic data sources utilized
    by SSA for PE eligibility purposes, (including IRS, OCSE, and state
    Unemployment Insurance data) record quarterly earnings information
    on the basis of when paid. In addition, several SSA officials note
    that the wage information submitted by employers at the request of
    SSA often reflects wages paid, even when information on wages earned
    is specifically requested. The differing definitions are confusing
    to employers, as well as ENs that must submit wage information in
    order to receive payment under TTW. According to one SSA official,
    over 600 employers nationwide now use The Work Number^®^, a wage
    verification service, when responding to SSA and other agency
    requests for wage verification.[^25] Employers utilizing The Work
    Number^®^ report only wages paid. It appears that SSA has made no
    systemic policy or procedural adjustments for wages paid or earned
    when verified by The Work Number^®^.

```{=html}
<!-- -->
```
-   The administrative burden of processing earnings information would
    be reduced. Greater use of electronic data sources, based on when
    wages are paid, would facilitate process automation. Using wages
    paid as the single measure of earnings would also eliminate the need
    to collect the information necessary to determine when wages were
    earned, which may reduce the number of follow-up requests for
    clarifying information from beneficiaries and employers. Finally, it
    would eliminate the need for two different sets of computations for
    concurrent beneficiaries.

-   A uniform definition of wages would facilitate SSI and SSDI
    integration. It is difficult to design automated systems to address
    both SSDI and SSI PE workloads due to the complex differences in the
    definition of earnings used in the two programs.

> In summary, adopting a uniform definition of wages based on when wages
> are paid will reduce confusion, reduce administrative burden,
> facilitate the use of existing electronic quarterly earnings data, and
> facilitate systems integration across the two disability programs.

### 2. Simplify Eligibility and Evidence Requirements Related to Earnings

Simplifying the process of estimating and verifying wages, particularly
for the SSI program, would facilitate the use of quarterly electronic
earnings data and reduce the effort expended by beneficiaries and SSA in
wage accounting activities.

A recent SSA study (SSA, 2001b) proposes options whereby SSA would use
average wages, rather than the exact amount paid each month, to estimate
and verify wages for purposes of SSI benefits and eligibility. The two
options include:

-   Assign wages to a month using the average wage over the number
    months worked at a specific job during a year, or over the calendar
    year, whichever is less. When estimating wages, SSA would use the
    expected annual amount divided by 12. When verifying wages, SSA
    would divide wages paid during the year by the lesser of the number
    of months worked during the year or 12, then post the wages to the
    appropriate months.

-   Assign wages to a month using the average wage over the calendar
    year, regardless of the number of months worked. When estimating,
    SSA would use the expected annual amount divided by 12. When
    verifying wages, SSA would divide wages paid during the year by 12.

The study evaluates the effect of these changes on annual benefits, SSA
employee work hours, and administrative costs. The findings indicate
that implementing wage averaging in the SSI program would: have little
or no effect on annual benefits for most beneficiaries; lead to
negligible changes in program costs for beneficiaries in continuous
payment status; and would save an estimated \$250 million in
administrative costs over five years.

There is already a precedent for wage averaging in the SSI program.
Self-employed recipients estimate how much they will earn for the year,
rather than having to estimate monthly amounts. SSA divides the annual
estimate by 12 to compute SSI benefits. Subsequently, when SSA verifies
earnings from self employment, it uses the recipient's tax return for
verification of the annual amount.

Wage averaging could also be used to simplify SGA computations and work
CDRs in the SSDI program, particularly if used in conjunction with an
earnings definition based on when wages are paid, and quarterly and
annual electronic earnings data.

If average paid wages are used as the basis for eligibility and benefit
determinations, then the evidence requirements for earnings should also
be simplified in both programs to further facilitate the PE processing
of wage information. Electronic quarterly OCSE, state Unemployment
Insurance, and/or annual IRS earnings data could be used as the first
and/or default source of earnings information, and be supplemented by
reports by beneficiaries and employers in instances where the electronic
data are inadequate (e.g., self employment income) or where significant
discrepancies between self-reported and electronic data exist.
Corroboration of reported earnings information via employers or other
detailed documentation would be done as the *exception*, rather than the
rule.

Because the SSI program must also consider income from a variety of
other sources, the availability of quarterly electronic earnings data
could never completely replace beneficiary reporting requirements. But,
as wages are the primary reason for SSI and SSDI overpayments, and the
most time-consuming aspect of SSI redeterminations (SSA, 2001b), wage
averaging and greater reliance on electronic earnings data and
automation have significant potential to reduce both SSA and beneficiary
burdens. Greater automation and use of quarterly electronic earnings
data would also increase the frequency that beneficiary work activity is
checked and verified, thereby minimizing overpayments. There is already
a precedent in SSA policy for verification of earnings on a quarterly
basis. Section SI 02302.060 of SSA's Program Operations Manual System
(POMS) indicates that, in addition to the annual SSI redetermination
required for section 1619(a) and (b) cases, earned income must be
verified at least quarterly. This policy likely reflects the recognition
that beneficiary work status can change over relatively short periods
and result in consequences to benefits and eligibility. The rationale
for this policy should also be applied to the SSDI program and serve as
a device to record, verify, and evaluate the effect of return to work on
SSDI benefits in a timely (at least quarterly) manner.

In general, it would seem useful for SSA to scrutinize its PE policies
and procedures in light of 21^st^ century processes and capabilities,
and to adapt accordingly. Federal and state governments already require
employers to submit earnings data on their employees. SSA needs to
develop the means to make expeditious use of these data for purposes of
managing its programs. While full and timely access to these data are
short-run obstacles, SSA's own policies and procedures appear to be far
greater hindrances to widespread and efficient use of available
electronic earnings information in PE workload processing.

## B. Centralize Work CDR Processing

SSDI work CDRs are labor intensive and require an in-depth knowledge of
SSDI work incentives and eligibility provisions. In addition,
responsibility for conducting tasks associated with work CDRs is
currently spread across teleservice centers, program service centers,
and field offices. As much of the process is not automated, it requires
the movement of paper folders, forms, and notifications between
components, increasing the chances that errors and oversights will
occur.

One improvement would be for SSA to place primary ownership of the work
CDR workload within a single component. This could be either the field
office or program service center. Assigning responsibility to a single
component would eliminate hand-offs, facilitate more uniform processing,
and establish greater accountability.

Going a step further, SSA could establish a unit or units devoted *only*
to SSDI PE work issues. These units might be staffed with CRs that have
undergone training similar to the training provided to ESRs, who would
specialize in the processing of work CDRs. The difference would be that
these CRs would not undertake the outreach and work incentive education
activities that were conducted by ESRs during the ESR pilot. Several
units could be located within each region in a manner similar to SSA's
PASS and Special Disability Workload cadres. While face-to-face contact
with all beneficiaries would not be possible, it would seem that in the
case of work CDRs, face-to-face contact is far less critical than
establishing a specific unit as the single repository for earnings
information and holding that unit accountable for following up and
processing the information requested and received.

## C. Expand Formats for Reporting Wages Electronically and Receiving Timely Feedback

Expanding the formats by which beneficiaries can easily report earnings
information and receive fast feedback regarding the potential effect of
the information on benefits and eligibility might improve beneficiary
reporting, reduce the likelihood of overpayments, and/or reduce the
unexpected consequences of overpayments.

### 1. Electronic Reporting

Touchtone telephone and internet-based methods could be developed as
electronic means for beneficiaries to report monthly earnings, but also
to provide instant feedback on benefits and eligibility issues. There is
already precedent for using these reporting methods in public programs.
Touchtone phone reporting is used by some states for weekly reporting
requirements for Unemployment Insurance, and internet-based eligibility
processes have already been developed and successfully used for state
Medicaid programs (Lewin, 2001b). As discussed previously, SSA is
piloting a touchtone reporting system for the SSI program.

Electronic reporting and feedback have the potential to reduce the
burden of reporting, inform beneficiaries of the potential consequences
of earnings, speed up the processing of information, and make more
timely adjustments to benefits. An electronic wage reporting and
feedback application for the Social Security disability programs might
work as follows: A beneficiary inputs the earnings amounts via phone or
internet (along with other information needed to identify the
beneficiary and indicate the period of the earnings), and in response to
the information reported, would receive a message indicating one or more
of the following:

-   The amount reported will likely have no impact on the current
    monthly SSI/SSDI benefit;

-   The amount reported may reduce/increase the monthly SSI benefit;

-   The amount reported is sufficient to trigger a TWP month, and a
    brief explanation of the potential effect of having worked nine
    months or more at this level;

-   The amount reported exceeds the level of SGA, and the potential
    consequences to monthly benefits.

The messages would contain all the appropriate disclaimers and
qualifiers, but the basic message would be that the amount worked is or
is not significant to benefits, and that the beneficiary should
undertake some specific action and/or expect some change in benefit or
eligibility status. The "instant" feedback could be followed-up with a
letter generated automatically which acts both as a receipt/confirmation
that SSA received the information reported, and an opportunity to convey
information to the beneficiary about the potential impact on benefits of
the earnings amounts reported. The instant feedback and letters could
also emphasize the fact that monthly benefits will not adjust
immediately, and that the beneficiary will likely be overpaid for one or
more months.

There are two limitations to this suggestion. First, the feedback
information can never be specific enough to truly reflect each
beneficiary's specific benefit computation. It can only be as tailored
and specific as SSA administrative systems will allow. That is
particularly problematic for SSDI, because currently, the work CDR
process is primarily manual. But even relatively untailored feedback
might be useful for reminding beneficiaries of the earnings thresholds
and consequences relevant to SSDI, as well as the effect of changes in
earnings on SSI benefits. The feedback messages and receipt letters
would also serve as frequent reminders to the beneficiary to: report
earnings; remain mindful of the potential effects on benefits; be aware
that SSA will not adjust payments immediately; and to expect an
overpayment that must be repaid.

A second, and probably more significant, limitation to this suggestion
is that the reported information is only useful to SSA if it is actually
*used*. As noted previously, current evidentiary requirements and
program rules would make it difficult for SSA to use the information
except for purposes of estimates for SSI computations or as just another
flag for possible earnings issues that require further development. It
would likely not speed up development for purposes of adjusting
benefits, and thus, would not have much of an effect on the incidence of
overpayments. Touchtone and internet reporting will only become
effective tools for preventing overpayments when SSA is able to make
better use of electronic earnings data and further automate its work CDR
processes.

Along with its ability to automate the work CDR development process,
MRTW has several features that represent steps in the direction of SSA
being able to provide feedback to beneficiaries in response to reported
earnings. First, MRTW has a function whereby it produces a letter, or
receipt, acknowledging the information reported by the beneficiary.
Second, the Benefits Planning Query feature of MRTW provides feedback
regarding recent earnings, TWP and EPE months.[^26] MRTW's
effectiveness, however, is hampered by the fact that it is not
integrated with the DCF and its use is not widespread.

### 2. EN Reporting of Beneficiary Earnings

The burden of reporting earnings might be lessened for some
beneficiaries if SSA would allow the earnings information submitted, by
way of ENs, to be sufficient for purposes of meeting the SSA reporting
requirements. Currently, beneficiaries participating in TTW are required
to submit earnings evidence directly to SSA, regardless of the fact that
they might have already submitted such evidence to the EN, who in turn,
has submitted it to the Ticket Program Manager, who subsequently submits
it to SSA. The duplication of effort seems unnecessary if the
information ultimately ends up and is processed in the same place. For
SSDI beneficiaries in particular, where earnings are the only type of
income information of ongoing interest to SSA, the duplicate reporting
seems unnecessary.

SSA must certainly maintain its reporting requirements and procedures,
because not all beneficiaries who work will participate in TTW, and for
SSI, income other than earnings must be reported. It seems, however,
that greater integration of the existing requirements with the TTW
processes could be rather easily achieved. The Ticket Program Manager
has been established, for purposes of interfacing with SSA systems, to
mimic an SSA field office. It would seem, then, that it could also mimic
a field office for the general purpose of receiving earnings reports,
rather than just for the specific purpose of receiving earnings reports
to process EN payment claims. This is particularly the case since the
DCF is now, presumably, the electronic storage site for all earnings
information to be used by both the SSI and SSDI programs.[^27]

Allowing the information reported by way of ENs to satisfy the SSA
reporting requirements for beneficiaries participating in TTW might also
have added benefits for ENs. It could be marketed as a "service" to
beneficiaries. The EN would be responsible for submitting the earnings
information, and for monitoring the Ticket Program Manager and SSA to
ensure timely processing of the information.

## D. Limit Overpayment Liability for Beneficiaries Who Appropriately Report 

Currently, SSA will waive overpayments if they are under \$500, or if
they are not due to the fault of the beneficiary and the beneficiary
demonstrates that the overpayment cannot be repaid. Features of the SSI
program appear to provide some protections from extremely large
overpayments (the expectation of monthly reporting, redeterminations
conducted at relatively short intervals), but this is generally not the
case for SSDI beneficiaries. Because SSDI payments are, on average,
higher than SSI payments, and because SSDI overpayments can go
undetected for many years, they have the potential to sum to tens of
thousands of dollars.

In support of the objective of promoting beneficiary work efforts and
engendering greater trust in the program, SSA could establish policies
that limit beneficiary liability for overpayments under certain
circumstances. For the SSDI program in particular, SSA might consider
limiting overpayment liability to an amount equal to benefits paid for a
period of six months, after any over- and underpayment amounts have been
taken into account. This type of overpayment waiver would only be
offered to SSDI beneficiaries who demonstrate that they have
appropriately reported work and earnings changes to SSA, and the
overpayment occurred entirely because SSA did not process the reported
information. For this policy to work, it would require that SSA issue
receipts or some manner of acknowledgement for wage reports similar to
the requirements of H.R. 743.

A policy such as this:

-   would demonstrate that SSA recognizes the limitations of its current
    process and is willing to accept some of the burden associated with
    overpayments when the beneficiary is not at fault;

-   might lead to greater accountability on SSA's part because the
    waivers, and associated lost overpayments, would provide documented
    evidence and statistics on SSA's inability to process work CDRs. It
    would also make it more costly for SSA to ignore the processing of
    work CDRs; and

-   would demonstrate that SSA recognizes the significant impact a large
    overpayment can have on the financial and non-financial well-being
    of the beneficiaries whose work attempts it is trying to support.

## E. Increase Beneficiary Awareness and Promote Self-Efficacy

Overpayments, even under the most ideal circumstances, are inevitable if
a beneficiary goes to work for any period of time. Even if beneficiaries
report earnings timely, SSA cannot make instantaneous adjustments.
Beneficiaries who return to work need to understand and plan for this.
They also need to know how and when it is important to report earnings,
need to be aware of when SSA is not processing the information reported
and making appropriate adjustments to benefits, and need to know how to
follow up and pursue suspected overpayments. Given the current state of
how the programs operate, beneficiaries who return to work need to
develop a healthy distrust of SSA's administrative processes and take on
greater responsibility for preventing and/or planning for overpayment
situations. Currently, the only way beneficiaries can guarantee that
they will not suffer the adverse consequences of an unexpected
overpayment is by tracking their earnings, noting "pivotal" earnings
events that may change benefits or eligibility status, and being
doggedly persistent in seeking accurate information and resolution of
the issue.

Teaching beneficiaries about work incentive provisions, how to deal with
SSA processes, and how to take ownership of the risk of overpayment is
very difficult. It is not so different from the challenges associated
with the complex federal income tax system. There are, perhaps, some
lessons from the income tax system that can be applied to earnings
reporting in the disability programs.

> **Lesson 1: Awareness.** Everybody knows the magic date of April
> 15^th^ with respect to income taxes. It is a certainty and the typical
> taxpayer receives numerous reminders of the tax due date in the form
> of employer W2 forms, 1099 forms, and federal and state tax filing
> forms being mailed to the taxpayer, public service announcements, and
> H&R Block commercials. SSA also has its reporting forms and
> information requests, but they likely do not arrive at consistent
> intervals or in a timely manner. Working beneficiaries need some
> manner of periodic reminders to report earnings, of events that
> trigger eligibility changes, and of how and to whom the earnings
> should be reported. SSA might consider sending out the equivalent of a
> Benefits Planning Query statement on a quarterly or annual basis to
> any beneficiary with recent work activity, along with reminders about
> the consequences of work activity and how to report earnings. These
> might be automatically generated from the alerts arising from SSA's
> enforcement activities using electronic earnings information. There is
> already precedent for this type of activity in the Social Security
> retirement program. Retirement beneficiaries will receive a "Mid-Year
> Mailer" requesting a revised estimate of earnings when, based on SSA
> review of annual IRS data, earnings exceed certain amounts.[^28]
>
> **Lesson 2: Tools and Assistance.** Some taxpayers require assistance
> to sort out their income taxes, while others can do it on their own or
> with the help of tax preparation tools. The same is likely true for
> beneficiaries trying to navigate work incentive provisions and
> administrative requirements. The IRS supports numerous tools and forms
> of assistance to taxpayers (e.g., extensive website information,
> instruction manuals, tax help-lines, the Volunteer Income Tax
> Assistance and Tax Counseling for the Elderly programs). SSA has
> recently made available two important resources for assistance -- the
> BPAO programs and ESRs. It is too early to determine how effective
> these resources are and whether the level of support currently
> provided by SSA for these resources is sufficient to meet the demand
> for them, but in general, these and other forms of assistance should
> be pursued. SSA might consider developing and supporting the
> dissemination of tools that will assist beneficiaries in tracking
> their earnings and relevant work incentive information (e.g., IRWEs,
> subsidies, unincurred business expenses), and becoming aware of
> eligibility event triggers. One such tool for beneficiaries, in the
> form of a workbook, already exists.[^29] Computerized versions might
> also be developed and disseminated via SSA's website. If SSA were
> truly to enter the E-government era, it would utilize a web- or
> PC-based program similar to TurboTax^®^, to have beneficiaries
> self-report earnings information electronically, which is later
> verified via quarterly and annual earnings data submitted by
> employers. TurboTax^®^, in agreement with the IRS, does not require
> the submission of the paper forms W2 and 1099. If there is some
> discrepancy with the information submitted to the IRS by the employer
> or financial institution, the IRS might then require the taxpayer to
> submit additional information.
>
> **Lesson 3: Penalties and Timely Enforcement.** The IRS imposes stiff
> penalties on tax evaders and those who incorrectly file their tax
> returns. The IRS also uses a sophisticated system to flag tax returns
> for audit, based on probability profiles. SSA has similar tools at its
> disposal for purposes of enforcement, but it appears that the tools
> may be underutilized. Earnings alerts frequently go unheeded and
> penalties for non-reporting are rarely levied. Penalties may be an
> effective means for making beneficiaries aware of reporting
> requirements, but they will only be effective at reducing overpayments
> if they are applied in a timely and consistent manner. It would seem
> ridiculous to apply a \$25 penalty for non-reporting two years after
> the violation and in conjunction with a very large overpayment. But a
> small penalty applied immediately and consistently would likely
> encourage timely reporting. More general use of penalties could only
> be implemented, however, when SSA has developed a mechanism for
> acknowledging and documenting wage reports and providing receipts to
> beneficiaries for the reported information. It would be unfair to
> penalize beneficiaries who report their earnings, but because of SSA's
> current, manual system for processing the information, the information
> is lost and proof of the reported information is unavailable.
>
> Because of the added importance and greater cost implications to SSA
> of reporting earnings under TTW, additional requirements and reporting
> penalties for beneficiaries who assign Tickets to ENs might also be
> considered.

## F. Establish Performance Standards, and Monitor and Allocate Sufficient Resources to PE Workloads

As noted previously, SSA has made a significant effort over the past
several years to allocate resources towards the timely processing of SSI
redeterminations. The PE workloads under the SSDI program have not
received the same level of attention. It appears that SSA can neither
accurately measure this workload nor monitor its performance. The
absence of reliable information about the SSDI PE workload is alarming.
SSA cannot begin to address the underlying causes of overpayment
situations among beneficiaries that return to work without first
developing the means to quantify the issue.

SSA needs to develop the ability to monitor the status of earnings
alerts generated from IRS data, and the progress of SSDI cases as they
move between SSA components and as work issues are developed. Once a
system for accurately tracking the workload has been established, SSA
needs to set timeliness and accuracy goals for the process, including
goals for each action and component. The performance information could
then be used to establish accountability, ensure timely actions to
minimize overpayments, evaluate manager performance, and allocate
resources appropriately.

As noted previously, SSA has already developed a mechanism for tracking
SSDI PE workloads as part of MRTW. Integration of MRTW with the DCF, and
making use of MRTW mandatory should be a priority of SSA.

## G. Establish a Cross-Component Task Force to Address PE Issues

It seems clear that the causes and implications of earnings-related
overpayments stem from and affect many different components within SSA.
This creates tremendous challenges to addressing the issue of untimely
processing of earnings information. No single component has the ability
to address all of the root causes, which appear to spawn from: program
policies; operational procedures; systems; the training, management, and
roles of staff at various levels and from various components; and the
knowledge and behaviors of beneficiaries.

SSA should consider establishing a cross-component PE task force. The
responsibilities of the task force would be to analyze PE issues
*holistically*, identify and prioritize the areas of needed improvement,
develop and implement solutions, and be held accountable for monitoring
and reporting on the progress and impacts of the changes. The task force
would be comprised of representatives from components within the offices
of: Operations; Systems; Disability and Income Security Programs;
Finance, Assessment, and Management; Policy; Human Resources; and
possibly others.

A cross-component task force will, however, only be effective in
addressing PE issues if it is empowered and provided adequate resources
to explore, test, implement, and measure the impact of changes to the
system. If the agency is not truly committed to addressing the program
inadequacies that plague disability beneficiaries attempting to work, a
PE task force will be ineffective and a waste of valuable effort. Before
any significant progress can be made, the agency must perceive the
importance of addressing general PE issues in the context of the larger
public policy goal of supporting work outcomes and promoting the
self-sufficiency of people with disabilities. Earnings-related
overpayments are only one symptom of a much larger and more fundamental
issue: the Social Security disability programs simply are not designed
to support employment.

# V. Summary and Conclusions

Unanticipated benefit overpayments can have significant, negative
consequences for beneficiary work efforts and well-being. The shock of a
large debt to the government can weaken an already tenuous attachment to
the labor force a beneficiary may have struggled to achieve. Timely
reporting and processing of earnings information is essential to
avoiding overpayments, but SSA faces numerous challenges under its
current system. While TTW has necessitated a number of changes to SSA's
systems and has generated a greater focus on PE work issues, SSA still
has a long road to travel before large and unanticipated overpayments
due to beneficiary work effort become something of the past.

Numerous individuals and entities are involved in reporting earnings,
processing the information so that disability benefits are adjusted
appropriately, and dealing with overpayments that are identified.
***Table A-1,*** provided as an attachment to this paper, enumerates and
summarizes the many entities involved in PE earnings-related issues,
along with the roles and challenges associated with each as addressed in
this paper. Underlying these functions are the basic program rules,
systems, and procedures governing PE issues, which are developed and
evaluated by many different components within SSA. ***Table A-2***, also
provided as an attachment, enumerates the various SSA offices believed
to be involved in the development and evaluation of PE-related policies,
systems, and procedures.

Although there are numerous SSA components and external entities
involved in the PE process and many reasons why overpayments occur, an
initiative designed to reduce overpayments can be conceptualized in a
relatively simple framework. ***Exhibit 1*** below presents a basic
framework that characterizes an initiative to reduce the incidence of
earnings-related overpayments as being comprised of three principal
components: the direct effects; intermediate outcomes; and the final
outcomes the initiative is intended to achieve.

Exhibit 1: Framework for Conceptualizing an Overpayment Reduction
Initiative

+--------------+-------------------------------------------------------+
| **           | **Overpayment Reduction Initiative**                  |
| Initiative** |                                                       |
|              |                                                       |
| **⇓**        |                                                       |
+--------------+-------------------------------------------------------+
| **Direct     | -   Reduced complexity of program rules and evidence  |
| Effects**    |     requirements                                      |
|              |                                                       |
| **⇓**        | -   Greater coordination and integration of SSI and   |
|              |     SSDI                                              |
|              |                                                       |
|              | -   Increased automation/reduced labor intensity of   |
|              |     work CDRs                                         |
|              |                                                       |
|              | -   Greater tracking, monitoring, and management of   |
|              |     PE workloads                                      |
|              |                                                       |
|              | -   More frequent assessment/monitoring of            |
|              |     beneficiary work activity                         |
|              |                                                       |
|              | -   Reduced beneficiary reporting burden              |
|              |                                                       |
|              | -   More tools and frequent reminders for             |
|              |     beneficiaries about reporting requirements and    |
|              |     the impact of work on benefits                    |
+--------------+-------------------------------------------------------+
| **           | -   Reduced processing time for work-related PE       |
| Intermediate |     actions                                           |
| Outcomes**   |                                                       |
|              | ```{=html}                                            |
| **⇓**        | <!-- -->                                              |
|              | ```                                                   |
|              | -   Benefit/eligibility adjustments achieved more     |
|              |     timely                                            |
|              |                                                       |
|              | -   Greater beneficiary awareness of and compliance   |
|              |     with reporting requirements                       |
|              |                                                       |
|              | -   Reduced incidence of Ticket assignments by        |
|              |     ineligible beneficiaries                          |
+--------------+-------------------------------------------------------+
| **Final      | -   Reduced incidence of earnings-related             |
| Outcomes**   |     overpayments                                      |
|              |                                                       |
|              | -   Greater support for and improvement in            |
|              |     beneficiary work efforts                          |
|              |                                                       |
|              | -   Reduced long-term disability program costs        |
+--------------+-------------------------------------------------------+

In this framework, the *direct effects* represent the direct actions or
results of the initiative. These are the means by which the initiative
produces the intended final outcomes---reduced incidence of
overpayments, greater support for working beneficiaries, and reduced
long-term program costs. If the initiative fails to produce these direct
effects, it presumably cannot work, at least according to the
assumptions underlying the means that will lead to the desired outcomes.
If direct effects are substantial, they can have an impact on
*intermediate* and *final* outcomes. An intermediate outcome is an
outcome of the initiative, narrowly related to the specific activities
of the initiative. Intermediate outcomes can act as indicators of
program success, but do not necessarily represent the primary goal or
purpose of the initiative. Final outcomes represent the broad goals or
purposes of the initiative. Representing an initiative in such a
framework is helpful, particularly if the nature of the initiative and
direct effects are complex and diffused over numerous entities. The
framework forces the user to articulate the intended means and outcomes,
thereby providing a basis for questioning underlying assumptions and
developing indicators of progress and success. It also helps one not to
lose sight of the forest for the trees.

Both beneficiaries and SSA need to take greater ownership of the PE
process, but an easy solution to the issue of earnings-related
overpayments is not evident. Minimizing the risk of overpayments for
beneficiaries who return to work will require significant resources and
a concerted effort on SSA's part, both to foster beneficiary compliance
with reporting requirements and to process the information reported. SSA
is engaged in large-scale changes to its administrative systems to
accommodate TTW. To date, the changes brought about by the
implementation of the DCF represent small steps towards addressing the
fundamental reasons for overpayments due to work activity. The DCF has
not reduced the administrative burden, but rather, seems to have added
to it. In the short-run, this might be expected of any new system, but
in the long-run, SSA needs to incorporate features in the DCF to support
the decision making and workload processing undertaken by field staff.
The fact that the DCF and MRTW were developed independently of one
another seems an indication of a major disconnect between the needs of
field staff in processing workloads and the needs of central office
staff in managing programs.

TTW has brought about many changes, some of which will likely improve
the processing of work reports. The fact that ENs must submit proof of
earnings to be paid, and that benefits must be appropriately adjusted
before an EN payment determination can be made have raised the
importance of processing PE workloads. There are now a few more squeaky
wheels demanding that the workload be processed. But the fact that these
workloads have not been adequately processed in the past could undermine
the success of TTW in a number of ways:

-   Beneficiaries fearing overpayments may choose not to participate in
    TTW; [^30]

-   Beneficiaries with overpayments that have not been identified but
    subsequently are uncovered because of participation in TTW will
    equate TTW with overpayments and may choose to withdraw from working
    and participating in TTW;

-   ENs submitting their first claims for outcome payments on a Ticket
    holder will be forced to wait long periods for payment while SSA
    sorts out years of information to determine whether benefits have
    gone to zero; and

-   SSA may allow the assignment of Tickets by beneficiaries who are
    already working and are, in actuality, ineligible for TTW. Depending
    on SSA's policy regarding these Ticket assignments, either SSA or
    ENs will bear the cost of this mistake.

It will require a substantial investment on SSA's part to address the
current challenges, but to ignore the importance of timely reporting and
timely processing of PE issues could be, in many ways, much more costly
to SSA in the long run.

# References

American Federation of Government Employees. 2002. Field Employees Not
to Blame for Title II Disability Workloads. AFGE Council 220 Hot Topics.
April 23, 2002. http://afgec220.org/hottopics3.htm.

Cebula, Raymond. 2003. Testimony before the Ticket to Work and Work
Incentives Advisory Panel. Washington, DC. February 12, 2003.

Fehner, Carol.2003. Testimony before the Ticket to Work and Work
Incentives Advisory Panel. Washington, DC. February 12, 2003.

Hill, S., Livermore, G. and A. Houtenville (forthcoming). "Rising Health
Care Expenditures and the Employment of People with High-Cost Chronic
Health Conditions," Chapter 5 in The Decline in Employment of People
with Disabilities: A Policy Puzzle (Stapleton and Burkhauser, eds.).
Kalamazoo, MI: W.E. Upjohn Institute.

The Lewin Group, Inc. 2001a. Research on Employment Supports for People
with Disabilities: Summary of the Focus Group Findings. Report prepared
for the U.S. Department of Health and Human Services, Assistant
Secretary for Planning and Evaluation. The Lewin Group: Falls Church,
VA. September 2001. http://aspe.hhs.gov/daltcp/reports/fgfind.htm

The Lewin Group, Inc. 2001b. Business Case Analysis of *health e app*: A
Web-based Enrollment Application for Public Health Insurance Programs.
The Lewin Group: Falls Church, VA. June 2001.
<http://www.healtheapp.org/busicase.asp>.

Livermore, G., D. Stapleton, M. Nowak, D. Wittenburg, and E. Eiseman.
2000. The Economics of Policies and Programs Affecting the Employment of
People with Disabilities. Report prepared for the National Institute on
Disability and Rehabilitation Research. Cornell University: Ithaca, NY.
http://www.ilr.cornell.edu/extension/files/download/Economics.policies.programs.pdf

Livermore, G., M. Nowak, D. Stapleton, J. Kregel, E. Bouchery, and A.
Glosser. 2003. Evaluation Design for the Ticket to Work Program:
Preliminary Process Evaluation. Report prepared for the Social Security
Administration. The Lewin Group: Falls Church, VA. March 11, 2003.
http://www.ccpr.cornell.edu/TTW_Prelim_Eval.pdf.

National Council of Social Security Management Associations. 2002.
Survey of Management. Hackensack, NJ: February 2002.
http://www.ncssma.org/Files/SurveyofManagement.pdf

Pine Tree Legal Assistance. 1996. How to Cope with Social Security
Overpayments. Pine Tree Legal Assistance: Portland, ME.
http://www.ptla.org/ptlasite/cliented/benefits/overpay.htm

Social Security Administration. Undated. Program Operations Manual
System (POMS). http://policy.ssa.gov/poms.nsf.

Social Security Administration. 2000. The Supplemental Security Income
Program at the Millennium. Washington, DC: November 30, 2000.
http://www.ssa.gov/policy/programs/SSI/millennium/ssi_millennium.pdf

Social Security Administration. 2001a. Online Social Security Handbook.
Your Basic Guide to the Social Security Programs.
http://www.ssa.gov/OP_Home/handbook/ssa-hbk.htm.

Social Security Administration. 2001b. Simplifying the Supplemental
Security Income Program: Challenges and Opportunities. Washington, DC.
http://www.ssa.gov/policy/programs/SSI/simplification/simplification.pdf

Social Security Administration. 2001c. Final Report for Employment
Support Representatives (ESR) Pilot. Washington, DC: November 2001.

Social Security Administration. 2002. Testimony of Deputy Commissioner
Lockhart before the Ways and Means Subcommittee on Human Resources, on
Stewardship of the SSI Program. July 25, 2002. Social Security
Administration Communications to Congress
http://www.ssa.gov/policy/congcomm/testimony_072502.html.

Social Security Administration. 2003a. 2003 Red Book: A Summary Guide to
Employment Support for People with Disabilities under the Social
Security Disability Insurance and Supplemental Security Income Programs.
SSA Pub. No. 64-030. Prepared by the Office of Disability and Income
Security Programs. January 2003.
www.ssa.gov/work/ResourcesToolkit/redbook.html

Social Security Administration. 2003b. 2002 SSI Annual Report.
Washington, DC.

Social Security Advisory Board. 1999. How the Social Security
Administration Can Improve Its Service to the Public. Washington, DC:
September 1999. http://www.ssab.gov/stpweb.pdf

Social Security Advisory Board. 2001a. Agenda for Social Security:
Challenges for the New Congress and the New Administration. Washington,
DC: February 2001. http://www.ssab.gov/Overview1.pdf

Social Security Advisory Board. 2001b. Statement on the Supplemental
Security Income Program. Washington, DC: May 2001.
http://www.ssab.gov/ssirept2001.pdf.

Stapleton, D. and G. Livermore. 2002. Evaluation Design for the Ticket
to Work Program. Report prepared for The Social Security Administration.
The Lewin Group, Inc.: Falls Church, VA. June 2002.

U.S. General Accounting Office. 2002a. SSA Disability: Enhanced
Procedures and Guidance Could Improve Service and Reduce Overpayments to
Concurrent Beneficiaries. GAO-02-802. Washington, DC: September 2002.

U.S. General Accounting Office. 2002b. Supplemental Security Income:
Progress Made in Detecting and Recovering Overpayments, but Management
Attention Should Continue. GAO-02-849. Washington, DC: September 2002.

U.S. General Accounting Office. 2002c. Supplemental Security Income:
Status of Efforts to Improve Overpayment Detection and Recovery.
GAO-02-962T. Washington, DC: July 2002.

U.S. General Accounting Office. 2003a. Major Management Challenges and
Program Risks: Social Security Administration. GAO-03-117. Washington,
DC: January 2003.

U.S. General Accounting Office. 2003b. High-Risk Series: An Update.
GAO-03-119. Washington, DC: January 2003.

# List of Acronyms

AFGE American Federation of Government Employees

ALJ Administrative Law Judge

CDR Continuing Disability Review

CR Claims Representative

DCF Disability Control File

BPAO Benefits Planning, Assistance, and Outreach

EN Employment Network

EPE Extended Period of Eligibility

ESR Employment Support Representative

GAO General Accounting Office

IDMS Integrated Disability Management System

IRS Internal Revenue Service

IRWE Impairment Related Work Expenses

MRTW Modernized Return to Work software

NCSSMA National Council of Social Security Management Associations

OCSE Office of Child Support Enforcement

PASS Plan for Achieving Self Support

PC-CDR Personal Computer-Continuing Disability Review software

PE Post Entitlement

POMS Program Operations Manual System

SGA Substantial Gainful Activity

SSA Social Security Administration

SSDI Social Security Disability Insurance

SSI Supplemental Security Income

TA Technical Assistance

TTW Ticket to Work program

TWP Trial Work Period

# Attachments

**Table A-1: Entities Involved in Processing Earnings-Related PE
Issues**

**Table A-2: SSA Components Involved in Developing and Evaluating PE
Policies, Systems, and Procedures**

Table A-1: Entities Involved in Processing Earnings-Related PE Issues\*

+---------+-------------------------------+----------------------------+
| **E     | **Role**                      | **Challenges/Potential     |
| ntity** |                               | Problems Associated with   |
|         |                               | Entity**                   |
+---------+-------------------------------+----------------------------+
| **      |                               |                            |
| Sources |                               |                            |
| of      |                               |                            |
| Ea      |                               |                            |
| rnings- |                               |                            |
| Related |                               |                            |
| Inform  |                               |                            |
| ation** |                               |                            |
+---------+-------------------------------+----------------------------+
| *       | -   Report earnings and other | -   Non-reporting          |
| *Benefi |     work related activities   |                            |
| ciaries |     to SSA                    | -   Understanding          |
| and     |                               |     reporting and evidence |
| Represe |                               |     requirements           |
| ntative |                               |                            |
| P       |                               | -   Understanding work     |
| ayees** |                               |     incentive provisions   |
|         |                               |                            |
|         |                               | -   Accurately estimating  |
|         |                               |     monthly income         |
|         |                               |                            |
|         |                               | -   Understanding when and |
|         |                               |     how to take follow-up  |
|         |                               |     actions                |
+---------+-------------------------------+----------------------------+
| **Empl  | -   Respond to SSA request    | -   Most likely to report  |
| oyers** |     for information to verify |     only earnings when     |
|         |     earnings reports          |     paid                   |
|         |                               |                            |
|         |                               | -   May be unresponsive or |
|         |                               |     slow to respond to SSA |
|         |                               |     requests for           |
|         |                               |     information            |
+---------+-------------------------------+----------------------------+
| **TTW   | -   Report beneficiary        | -   Understanding          |
| Emp     |     earnings to the Ticket    |     reporting and evidence |
| loyment |     Program Manager for       |     requirements           |
| Net     |     purposes of EN payment    |                            |
| works** |     under TTW                 | -   Understanding work     |
|         |                               |     incentive provisions   |
|         |                               |                            |
|         |                               | -   Tracking beneficiary   |
|         |                               |     earnings               |
|         |                               |                            |
|         |                               | -   Payment delays         |
+---------+-------------------------------+----------------------------+
| **IRS** | -   Annual IRS data used by   | -   Data not sufficient    |
|         |     SSA for purposes of SSDI  |     for                    |
|         |     program enforcement       |     benefits/eligibility   |
|         |                               |     determinations         |
|         |                               |                            |
|         |                               | -   Data only available on |
|         |                               |     annual basis           |
+---------+-------------------------------+----------------------------+
| *       | -   Quarterly OCSE data used  | -   Data not sufficient    |
| *Office |     by SSA for purposes of    |     for                    |
| of      |     SSI program enforcement.  |     benefits/eligibility   |
| Child   |                               |     determinations         |
| Support |                               |                            |
| Enforc  |                               | -   Data only available on |
| ement** |                               |     quarterly basis        |
|         |                               |                            |
|         |                               | -   Data only widely       |
|         |                               |     available for use on   |
|         |                               |     SSI cases              |
+---------+-------------------------------+----------------------------+
| **SSA   |                               |                            |
| (and    |                               |                            |
| Cont    |                               |                            |
| ractor) |                               |                            |
| Com     |                               |                            |
| ponents |                               |                            |
| I       |                               |                            |
| nvolved |                               |                            |
| in      |                               |                            |
| Pro     |                               |                            |
| cessing |                               |                            |
| Ea      |                               |                            |
| rnings- |                               |                            |
| Related |                               |                            |
| Inform  |                               |                            |
| ation** |                               |                            |
+---------+-------------------------------+----------------------------+
| **Tele  | -   Responds to               | Not Addressed              |
| service |     beneficiary/third-party   |                            |
| Ce      |     inquiries on work issues  |                            |
| nters** |                               |                            |
|         | -   Receives earnings report  |                            |
|         |     from beneficiaries/third  |                            |
|         |     parties                   |                            |
|         |                               |                            |
|         | -   Mails forms to            |                            |
|         |     beneficiary requesting    |                            |
|         |     additional information or |                            |
|         |     instructs field office to |                            |
|         |     mail forms                |                            |
|         |                               |                            |
|         | -   Notifies field offices of |                            |
|         |     reports                   |                            |
+---------+-------------------------------+----------------------------+
| **      | -   Responds to               | -   Provides inaccurate    |
| Program |     beneficiary/third-party   |     information to         |
| Service |     inquiries on work issues  |     beneficiaries          |
| Ce      |     Receives earnings reports |                            |
| nters** |     from beneficiaries/third  | -   Duplicates field       |
|         |     parties                   |     office activities      |
|         |                               |                            |
|         | -   Receives alerts generated | -   Neglects to respond to |
|         |     from IRS data matches     |     enforcement alerts     |
|         |                               |     generated from IRS     |
|         | -   Develops earnings         |     data matches           |
|         |     evidence and/or refers    |                            |
|         |     cases to field office     | -   Delays in responding   |
|         |                               |     to folder requests     |
|         | -   Verifies earnings and     |     from field offices     |
|         |     determines impact on      |                            |
|         |     eligibility/benefits      | -   Delays in developing   |
|         |                               |     earnings evidence due  |
|         | -   Posts changes in          |     to requirements and    |
|         |     eligibility/benefits to   |     competing priorities   |
|         |     MBR and SSR               |                            |
|         |                               | -   Delays in making       |
|         | -   Generates notices to      |     eligibility/benefit    |
|         |     beneficiaries             |     determinations due to  |
|         |                               |     process complexity,    |
|         |                               |     labor intensity,       |
|         |                               |     missing information,   |
|         |                               |     and competing          |
|         |                               |     priorities             |
|         |                               |                            |
|         |                               | -   Delays in making both  |
|         |                               |     SSI and SSDI           |
|         |                               |     determinations for     |
|         |                               |     concurrent             |
|         |                               |     beneficiaries due to   |
|         |                               |     system bifurcation     |
|         |                               |                            |
|         |                               | -   Inaccurate             |
|         |                               |     determinations due to  |
|         |                               |     insufficient           |
|         |                               |     information or         |
|         |                               |     insufficient           |
|         |                               |     experience             |
+---------+-------------------------------+----------------------------+

**Table A-1 (continued): Entities Involved in Processing
Earnings-Related PE Issues\***

+---------+-------------------------------+----------------------------+
| **E     | **Role**                      | **Challenges/Potential     |
| ntity** |                               | Problems Associated with   |
|         |                               | Entity**                   |
+---------+-------------------------------+----------------------------+
| **SSA   |                               |                            |
| (and    |                               |                            |
| Cont    |                               |                            |
| ractor) |                               |                            |
| Com     |                               |                            |
| ponents |                               |                            |
| I       |                               |                            |
| nvolved |                               |                            |
| in      |                               |                            |
| Pro     |                               |                            |
| cessing |                               |                            |
| Ea      |                               |                            |
| rnings- |                               |                            |
| Related |                               |                            |
| Info    |                               |                            |
| rmation |                               |                            |
| (conti  |                               |                            |
| nued)** |                               |                            |
+---------+-------------------------------+----------------------------+
| **Field | -   Responds to               | -   Provides inaccurate    |
| Of      |     beneficiary/third-party   |     information to         |
| fices** |     inquiries on work issues  |     beneficiaries          |
|         |                               |                            |
|         | -   Receives earnings report  | -   Duplicates program     |
|         |     from beneficiaries/third  |     service center         |
|         |     parties                   |     activities             |
|         |                               |                            |
|         | -   Develops earnings         | -   Delays in developing   |
|         |     evidence                  |     earnings evidence due  |
|         |                               |     to requirements and    |
|         | -   Verifies earnings and     |     competing priorities   |
|         |     determines impact on      |                            |
|         |     eligibility/benefits      | -   Delays in making       |
|         |                               |     eligibility/benefit    |
|         | -   Posts changes in          |     determinations due to  |
|         |     eligibility/benefits to   |     process complexity,    |
|         |     MBR and SSR               |     labor intensity,       |
|         |                               |     missing information,   |
|         | -   Generates notices to      |     and competing          |
|         |     beneficiaries             |     priorities             |
|         |                               |                            |
|         |                               | -   Delays in making both  |
|         |                               |     SSI and SSDI           |
|         |                               |     determinations for     |
|         |                               |     concurrent             |
|         |                               |     beneficiaries due to   |
|         |                               |     system bifurcation     |
|         |                               |                            |
|         |                               | -   Inaccurate             |
|         |                               |     determinations due to  |
|         |                               |     insufficient           |
|         |                               |     information or         |
|         |                               |     insufficient           |
|         |                               |     experience             |
+---------+-------------------------------+----------------------------+
| *       | -   Adjudicates EN payment    | -   Delays in adjudicating |
| *Office |     claims                    |     EN payments due to     |
| of      |                               |     delays in collecting   |
| Emp     | -   Determines beneficiary    |     and processing past    |
| loyment |     Ticket eligibility        |     work activity          |
| Support |                               |     information            |
| Pro     | -   Terminates Tickets        |                            |
| grams** |                               | -   Inaccurate             |
|         |                               |     determinations of      |
|         |                               |     Ticket eligibility due |
|         |                               |     to delays in           |
|         |                               |     collecting and         |
|         |                               |     processing past work   |
|         |                               |     activity information   |
+---------+-------------------------------+----------------------------+
| *       | -   Informs ENs of Ticket     | -   Inaccurate information |
| *Ticket |     assignability             |     re: Ticket             |
| to Work |                               |     assignability due to   |
| Program | -   Collects and certifies    |     delays in SSA          |
| Ma      |     earnings information      |     collecting and         |
| nager** |     received with payment     |     processing past work   |
|         |     claims from ENs           |     activity information   |
|         |                               |                            |
|         | -   Make outcome payments to  | -   Educating ENs about    |
|         |     ENs                       |     reporting and evidence |
|         |                               |     requirements           |
|         |                               |                            |
|         |                               | -   Educating ENs about    |
|         |                               |     reasons for payment    |
|         |                               |     delays                 |
+---------+-------------------------------+----------------------------+
| **      | -   Conducts enforcement      | Not Addressed              |
| ?????** |     activities using IRS and  |                            |
|         |     OCSE earnings data to     |                            |
|         |     profile beneficiaries     |                            |
+---------+-------------------------------+----------------------------+
| **E     |                               |                            |
| ntities |                               |                            |
| I       |                               |                            |
| nvolved |                               |                            |
| in      |                               |                            |
| Actions |                               |                            |
| Ass     |                               |                            |
| ociated |                               |                            |
| with    |                               |                            |
| Ide     |                               |                            |
| ntified |                               |                            |
| Overpay |                               |                            |
| ments** |                               |                            |
+---------+-------------------------------+----------------------------+
| *       | -   Liable for overpayment    | -   Understanding waiver,  |
| *Benefi |                               |     reconsideration, and   |
| ciaries | -   Request reinstatement of  |     appeals processes      |
| and     |     benefits                  |                            |
| Represe |                               | -   Financial and          |
| ntative | -   Request overpayment       |     psychosocial burden of |
| P       |     waiver and undertakes     |     unexpected overpayment |
| ayees** |     associated actions        |     and associated actions |
|         |                               |     to address it          |
|         | -   Request personal          |                            |
|         |                               |                            |
|         |    conference/reconsideration |                            |
|         |     and undertakes associated |                            |
|         |     actions                   |                            |
|         |                               |                            |
|         | -   Request appeal and        |                            |
|         |     undertakes associated     |                            |
|         |     actions                   |                            |
+---------+-------------------------------+----------------------------+
| **BPAO  | -   Assist beneficiaries in   | Not Addressed              |
| Benefit |     understanding overpayment |                            |
| Specia  |     circumstances and the     |                            |
| lists** |     procedures for addressing |                            |
|         |     overpayments              |                            |
|         |                               |                            |
|         | -   Assist beneficiaries with |                            |
|         |     collecting required       |                            |
|         |     information and assessing |                            |
|         |     the accuracy of SSA       |                            |
|         |     overpayment               |                            |
|         |     determinations            |                            |
+---------+-------------------------------+----------------------------+

**Table A-1 (continued): Entities Involved in Processing
Earnings-Related PE Issues\***

+---------+-------------------------------+----------------------------+
| **E     | **Role**                      | **Challenges/Potential     |
| ntity** |                               | Problems Associated with   |
|         |                               | Entity**                   |
+---------+-------------------------------+----------------------------+
| **E     |                               |                            |
| ntities |                               |                            |
| I       |                               |                            |
| nvolved |                               |                            |
| in      |                               |                            |
| Actions |                               |                            |
| Ass     |                               |                            |
| ociated |                               |                            |
| with    |                               |                            |
| Ide     |                               |                            |
| ntified |                               |                            |
| Overp   |                               |                            |
| ayments |                               |                            |
| (conti  |                               |                            |
| nued)** |                               |                            |
+---------+-------------------------------+----------------------------+
| *       | -   Assist beneficiaries in   | Not Addressed              |
| *Lawyer |     addressing overpayment    |                            |
| s/Legal |     determinations            |                            |
| Adv     |                               |                            |
| isors** |                               |                            |
+---------+-------------------------------+----------------------------+
| **Field | -   Assist beneficiaries in   | Not Addressed              |
| Of      |     understanding overpayment |                            |
| fices** |     circumstances and the     |                            |
|         |     procedures for addressing |                            |
|         |     overpayments              |                            |
|         |                               |                            |
|         | -   Assist beneficiaries with |                            |
|         |     collecting required       |                            |
|         |     information to assess the |                            |
|         |     accuracy of SSA           |                            |
|         |     overpayment               |                            |
|         |     determinations            |                            |
|         |                               |                            |
|         | ```{=html}                    |                            |
|         | <!-- -->                      |                            |
|         | ```                           |                            |
|         | -   Process requests          |                            |
|         |     reinstatement of benefits |                            |
|         |                               |                            |
|         | -   Process requests for      |                            |
|         |     overpayment waiver        |                            |
|         |                               |                            |
|         | -   Process requests for      |                            |
|         |     personal                  |                            |
|         |                               |                            |
|         |    conference/reconsideration |                            |
|         |                               |                            |
|         | ```{=html}                    |                            |
|         | <!-- -->                      |                            |
|         | ```                           |                            |
|         | -   Initial processing of     |                            |
|         |     appeal request            |                            |
+---------+-------------------------------+----------------------------+
| **ALJs  | -   Review and make           | Not Addressed              |
| and     |     determinations regarding  |                            |
| Appeals |     waiver and overpayment    |                            |
| Co      |     determination appeals     |                            |
| uncil** |                               |                            |
+---------+-------------------------------+----------------------------+

\* Based on the information collected and reviewed for this paper, and
on the author's assumptions regarding the roles and responsibilities of
specific components. It is beyond the scope of this paper to investigate
and describe all of the components within SSA conducting PE-related
functions. Inaccuracies and omissions are probable.

**Table A-2: SSA Components Involved in Developing and Evaluating PE
Policies, Systems, and Procedures\***

+-------------------+--------------------------------------------------+
| **SSA Office**    | **Development/Evaluation Function**              |
+-------------------+--------------------------------------------------+
| **Operations**    | -   Develop and maintain computer systems used   |
|                   |     for SSI and SSDI PE workload processing      |
| **Systems**       |                                                  |
+-------------------+--------------------------------------------------+
| **Disability and  | -   Develop systems used to administer TTW       |
| Income Security   |                                                  |
| Programs**        |                                                  |
|                   |                                                  |
| **Systems**       |                                                  |
+-------------------+--------------------------------------------------+
| **Operations**    | -   Develop tools/decision support software for  |
|                   |     PE workload processing                       |
| **Systems**       |                                                  |
+-------------------+--------------------------------------------------+
| **Operations**    | -   Develop forms, automated notices,            |
|                   |     information requests, and informational      |
| **Disability and  |     materials sent to beneficiaries,             |
| Income Security   |     representative payees, and employers         |
| Programs**        |                                                  |
|                   |                                                  |
| **Systems**       |                                                  |
|                   |                                                  |
| *                 |                                                  |
| *Communications** |                                                  |
+-------------------+--------------------------------------------------+
| **Disability and  | -   Develop program policies, definitions, and   |
| Income Security   |     procedures related to PE issues and ensure   |
| Programs**        |     accurate and comprehensible description of   |
|                   |     such in POMS                                 |
| **Policy**        |                                                  |
|                   |                                                  |
| **Operations**    |                                                  |
|                   |                                                  |
| **General         |                                                  |
| Council**         |                                                  |
+-------------------+--------------------------------------------------+
| **Operations**    | -   Identify issues with PE policies and         |
|                   |     procedures, and investigate and implement    |
| **Disability and  |     solutions                                    |
| Income Security   |                                                  |
| Programs**        |                                                  |
|                   |                                                  |
| **Finance,        |                                                  |
| Assessment and    |                                                  |
| Management**      |                                                  |
|                   |                                                  |
| **Policy**        |                                                  |
+-------------------+--------------------------------------------------+
| **Disability and  | -   Develop and negotiate data use agreements    |
| Income Security   |     with external entities                       |
| Programs**        |                                                  |
|                   |                                                  |
| **Policy**        |                                                  |
|                   |                                                  |
| **Systems**       |                                                  |
+-------------------+--------------------------------------------------+
| **Human           | -   Develop and implement staff training         |
| Resources**       |     curricula                                    |
|                   |                                                  |
| **Operations**    |                                                  |
+-------------------+--------------------------------------------------+
| **Finance,        | -   Develop performance standards and quality    |
| Assessment and    |     assurance procedures                         |
| Management**      |                                                  |
|                   |                                                  |
| **Operations**    |                                                  |
|                   |                                                  |
| **Disability and  |                                                  |
| Income Security   |                                                  |
| Programs**        |                                                  |
|                   |                                                  |
| **Human           |                                                  |
| Resources**       |                                                  |
+-------------------+--------------------------------------------------+
| **Finance,        | -   Develop workload measures and conduct        |
| Assessment and    |     workload measurement and monitoring          |
| Management**      |                                                  |
|                   |                                                  |
| **Operations**    |                                                  |
|                   |                                                  |
| **Systems**       |                                                  |
+-------------------+--------------------------------------------------+
| **Inspector       | -   Monitor extent of program overpayments       |
| General**         |                                                  |
|                   | -   Develop policies and procedures associated   |
|                   |     with fraud prevention                        |
+-------------------+--------------------------------------------------+

\* Based on the information collected and reviewed for this paper, and
on the author's assumptions regarding the roles and responsibilities of
specific components. It is beyond the scope of this paper to investigate
and describe all of the components within SSA conducting PE-related
functions. Inaccuracies and omissions are probable.

[^1]: In addition to changes in earnings, SSI overpayments might be
    caused by changes in: living arrangements, marital status, the
    number of household members, the income of other household members,
    assets or resources. For SSDI, overpayments might be caused by
    changes in impairment related work expenses, subsidy, unincurred
    business expenses, marital status (for disabled adult children), or
    because of medical improvement.

[^2]: Under a separate contract with SSA, I directed the preliminary
    Ticket to Work process evaluation. This effort involved an extensive
    review of information on TTW, as well as interviews with staff from
    SSA, the Ticket Program Manager, the 13 state vocational
    rehabilitation agencies, and 27 non-SVRA ENs operating in the first
    13 TTW states. The information cited in this paper from these
    activities is documented in Livermore et al. (2003).

[^3]: See the Red Book (SSA, 2003a) for further description of the SSDI
    and SSI work incentive provisions.

[^4]: Medical CDRs are conducted periodically to assess whether a
    beneficiary is still medically eligible for SSI and/or SSDI.

[^5]: These include: Centers for Medicare and Medicaid Services (CMS)
    demonstrations to maintain independence and employment that allow
    states to provide Medicaid coverage to certain groups *before* their
    health conditions become severe enough for these individuals to
    become eligible through spend down or disability; demonstrations to
    test the impact of reducing SSDI benefits by \$1 for every \$2 of
    earnings over a specified level instead of the wholesale loss of
    benefits when earnings exceed SGA; and SSA demonstrations to try to
    manage disability and prevent the need for coming onto the
    disability rolls among disability applicants.

[^6]: Although removing SSI from the high risk list, GAO placed federal
    disability programs government-wide on its high risk list in 2003.
    The reasons noted for designating federal disability programs as
    high risk include outdated economic, workforce, and medical
    concepts, and poor positioning with respect to providing meaningful
    and timely support to Americans with disabilities in the face of the
    aging baby-boomers and potential for rapid program growth (GAO,
    2003b).

[^7]: The first three overpayment scenarios were provided courtesy of
    Lucy Miller, a work incentives trainer with the Virginia
    Commonwealth University Technical Assistance Center for SSA's BPAO
    project.

[^8]: Overpayment Scenario #4 was provided courtesy of Jim McCarthy, an
    attorney and legislative analyst with the National Federation of the
    Blind.

[^9]: When an SSDI beneficiary's disability results in the need for
    extra assistance at work, a reduced production rate, frequent
    breaks, or fewer job duties than coworkers in a similar job, a
    subsidy might be computed when determining SGA. The subsidy reflects
    the fact that the individual\'s income is not only pay for his/her
    work product, but also represents either direct help from someone
    else, or full pay for lower productivity than other employees. In
    assessing SGA, SSA attempts to assess earnings that can be
    attributed directly to the individual and the earnings potential if
    other supports were absent. The subsidy is SSA's adjustment to the
    value of the gross earnings, which involves deducting the cost
    attributed to the extra help or special work situation of the
    individual.

[^10]: Information in this section is derived from Pine Tree Legal
    Assistance (1996); POMS GN 022; and SSA (2001a).

[^11]: The Lewin Group (2001a), pp. 35-36.

[^12]: See Livermore et al. (2000) for a discussion of the impact of
    income and in-kind support programs on the employment of people with
    disabilities and a review of studies on the issue. See Hill et al.
    (forthcoming) for a more recent review of studies of the effects of
    health insurance on the employment of people with disabilities.

[^13]: ENs can receive two types of payments: milestone payments and
    outcome payments. Milestone payments are based on the beneficiary
    attaining monthly earnings at or above the non-blind SGA level.
    Outcome payments are based on the beneficiary attaining monthly
    earnings sufficient to reduce the SSI or SSDI cash benefit to zero.

[^14]: According to one interviewee, SSA has made outcome payments to
    ENs in cases where the Ticket was assigned, and a subsequent action
    was taken to retroactively terminate benefits because of work or
    earnings as of a date preceding the date of Ticket assignment. This
    suggests that SSA's current policy is to honor the Ticket assignment
    regardless of retroactive work-related eligibility changes.

[^15]: OCSE has developed a national database, the National Directory of
    New Hires, under the authority of the Personal Responsibility and
    Work Opportunity Reconciliation Act of 1996 for the purpose of
    helping states enforce child support orders. As of October 1997,
    states have been required to submit the following to OCSE: quarterly
    wages from employer quarterly wage reports; information on new hires
    from W4 forms; and unemployment insurance information. While the
    main purpose of the file is child support enforcement, it is being
    used by SSA to enforce SSI income reporting requirements.

[^16]: Scheduled redeterminations are supposed to occur every 12 to 14
    months.

[^17]: According to one source (SSA, 2001b), if wages are not verified
    by the end of 14 months, the estimated wage of the 14^th^ month
    remains in effect until a new estimate is obtained. Usually, SSA
    will not attempt to assess earnings and other factors for purposes
    of payment determination any further than two years and two months
    in the past.

[^18]: Milestone payments are evaluated and authorized by SSA.

[^19]: The three organizations awarded contracts by SSA to conduct
    program training and provide TA to BPAOs are Virginia Commonwealth
    University, Cornell University, and the University of Missouri.

[^20]: Recent enhancements to the work CDR process are described in the
    next section.

[^21]: See, for example, Social Security Advisory Board (1999).

[^22]: Information in this section is derived from Livermore et al.
    (2003).

[^23]: Information in this section is derived from Livermore et al.
    (2003).

[^24]: Each described previous, unsuccessful efforts to collect payments
    under the AP program.

[^25]: The Work Number® is an automated service that provides controlled
    access to a database of employment and earnings records on
    approximately 60 million employees nationwide. Among other things,
    it can be used by social service programs to help determine
    eligibility and to facilitate benefit payment accuracy. For more
    information, see www.theworknumber.com.

[^26]: The Benefits Planning Query feedback is, however, only as
    up-to-date as the electronic administrative data from which the
    information is derived.

[^27]: This might already be the case in actuality. If TTW participants
    do not report earnings directly to SSA, but report them via the EN,
    it would seem that the end-result benefit adjustment in response to
    earnings would occur regardless.

[^28]: See POMS RS 02510.010.

[^29]: See the handbooks developed by Michael Walling at
    www.wallinginc.com.

[^30]: In his testimony to the Ticket to Work and Work Incentives
    Advisory Panel, Cebula (2003) notes that participants in a recent
    focus group, convened at his Disability Law Center in Boston, MA,
    referred to Ticket to Work as the ticket to overpayments. Many of
    the agency personnel in attendance were steering their clients clear
    of TTW due to bad experiences with overpayments and the resulting
    dealings with SSA.