Perhaps the most important of these recommendations concerns access to restitution of cash benefits that have been lost through fraud, abuse, or misappropriation. Under current law, when a payee has been determined to have misused benefits, SSA can reissue the benefits only in cases where SSA is found to have been negligent in investigating or monitoring the payee. In nearly all other cases, the individual beneficiary loses his or her benefits. It is very difficult for the beneficiary to claim this reissue on his or her own and can result in extreme hardship for beneficiaries. At the same time, NAMI wants to ensure that this long-overdue reform does not result in SSA retreating from its existing duty of demanding restitution of misused funds from former payees to ensure that an appropriate deterrent to misuse is not eroded.
Current requirements allow either state licensing or bonding.
Mandating that institutional payees meet both requirements will ensure necessary state oversight of business practices and investigation by surety companies that issue bonds. Proceeds from redeemed bonds would also reduce the costs to Social Security from misused benefits that are reissued. Third, NAMI supports efforts to ensure that organizational payees that have been found to have misused an individual's benefits cannot qualify for any fees from that individual's benefits for the months the payee misused the funds. It is troubling that any organizational payee has ever been able to actually profit by collecting fees from beneficiaries they were simultaneously defrauding. NAMI would like to see this long overdue reform expanded by requiring SSA to notify the beneficiary that their organizational payee has been found to have misused funds and has had fees withheld.