SECTION 1. DENIAL OF CASH BENEFITS TO DRUG ADDICTS AND ALCOHOLICS.

    (a) Amendments Relating to Title II Disability Benefits.--
            (1) In general.--Section 225(c) of the Social Security Act 
        (42 U.S.C. 425(c)) is amended--
                    (A) by striking ``(c)(1)(A)'' and inserting 
                ``(2)(A)'';
                    (B) by striking paragraph (7) and by redesignating 
                paragraphs (2) through (6) as paragraphs (3) through 
                (7), respectively; and
                    (C) by inserting before paragraph (2) as 
                redesignated by subparagraph (A) the following new 
                paragraph:
    ``(c)(1) No cash benefits shall be payable under this title to any 
individual who is otherwise entitled to benefits under this title based 
on disability, if such individual's alcoholism or drug addiction is a 
contributing factor material to the Commissioner's determination that 
such individual is disabled.''.
            (2) Treatment Requirements.--
                    (A) Section 225(c)(2)(A) of such Act (42 U.S.C. 
                425(c)(2)(A)), as redesignated by paragraph (1), is 
                amended to read as follows:
    ``(2)(A)(i) Any individual who would be entitled to cash benefits 
under this title but for the application of paragraph (1) may elect to 
comply with the provisions of this subsection.
            ``(ii) Any individual who is entitled to cash benefits 
        under this title by reason of disability (or whose entitlement 
        to such benefits is suspended), and who was entitled to such 
        benefits by reason of disability, for which such individual's 
        alcoholism or drug addiction was a contributing factor material 
        to the Commissioner's determination that such individual was 
        disabled, for the month preceding the month in which this 
        paragraph takes effect, shall be required to comply with the 
        provisions of this subsection.
                    (B) Section 225(c)(2)(B) of such Act (42 U.S.C. 
                425(c)(2)(B)), as so redesignated, is amended--
                            (i) by striking ``who is required under 
                        subparagraph (A)'' and inserting ``described in 
                        clause (ii) of subparagraph (A) who is 
                        required''; and
                            (ii) by striking ``paragraph (3)'' and 
                        inserting ``paragraph (4)''.
                    (C) Section 225(c)(3)(A) of such Act (42 U.S.C. 
                425(c)(3)(A)), as so redesignated, is amended--
                            (i) by striking ``paragraph (1)'' and 
                        inserting ``paragraph (2)(A)''; and
                            (ii) by striking ``paragraph (5)'' and 
                        inserting ``paragraph (6)''.
                    (D) Section 225(c)(3)(B) of such Act (42 U.S.C. 
                425(c)(3)(B)), as so redesignated, is amended by 
                striking ``paragraph (1)'' and inserting ``paragraph 
                (2)(A)''.
                    (E) Section 225(c)(5) of such Act (42 U.S.C. 
                425(c)(5)), as so redesignated, is amended by striking 
                ``paragraph (2)'' and inserting ``paragraph (3)''.
                    (F) Section 225(c)(6)(A) of such Act (42 U.S.C. 
                425(c)(6)(A), as so redesignated, is amended--
                            (i) by striking ``who are receiving 
                        benefits under this title and who as a 
                        condition of payment of such benefits'' and 
                        inserting ``described in paragraph (2)(A)(i) 
                        who elect to undergo treatment; and the 
                        monitoring and testing of all individuals 
                        described in paragraph (2)(A)(ii) who'';
                            (ii) by striking ``under paragraph (1)''; 
                        and
                            (iii) by striking ``paragraph (2)(A)'' and 
                        inserting ``paragraph (3)(A)''.
                    (G) Section 225(c)(6)(C)(ii)(I) of such Act (42 
                U.S.C. 425(c)(6)(C)(ii)(I)), as so redesignated, is 
                amended--
                            (i) by striking ``residing in the State'' 
                        and all that follows through ``they are 
                        disabled'' and inserting ``described in 
                        paragraph (2)(A) residing in the State''; and
                            (ii) by striking ``paragraph (2)(A)'' and 
                        inserting ``paragraph (3)(A)''.
                    (H) Section 225(c)(6)(C)(ii)(III) of such Act (42 
                U.S.C. 425(c)(6)(C)(ii)(III)), as so redesignated, is 
                amended by striking ``paragraph (2)(A)'' and inserting 
                ``paragraph (3)(A)''.
                    (I) Section 225(c)(6)(C) of such Act (42 U.S.C. 
                425(c)(6)(C)), as so redesignated, is amended by adding 
                at the end the following:
    ``(iii) The monitoring requirements of clause (ii) shall not apply 
in the case of any individual described in paragraph (2)(A)(i) who 
fails to comply with the requirements of paragraph (2).''.
                    (J) Section 225(c)(7) of such Act (42 U.S.C. 
                425(c)(7)), as so redesignated, is amended--
                            (i) in subparagraph (A), by striking ``who 
                        is entitled'' and all that follows through ``is 
                        under a disability'' and inserting ``described 
                        in paragraph (2)(A)''; and
                            (ii) in subparagraph (D), by striking ``(4) 
                        or (7)'' and inserting ``(5)''.
                    (K) Section 225(c)(8) of such Act (42 U.S.C. 
                425(c)(8)) is amended by striking ``(1), (4) or (7)'' 
                and inserting ``(2) or (5)''.
                    (L) Section 225(c) of such Act (42 U.S.C. 425(c)) 
                is amended by adding at the end the following new 
                paragraphs:
    ``(10) The Commissioner shall provide appropriate notification to 
each individual subject to the limitation on cash benefits contained in 
paragraph (1) and the treatment provisions contained in paragraph (2).
    ``(11) The requirements of paragraph (2) shall cease to apply to 
any individual if the Commissioner determines that such individual no 
longer needs treatment.''.
            (3) Representative payee requirements.--
                    (A) Section 205(j)(1)(B) of such Act (42 U.S.C. 
                405(j)(1)(B)) is amended to read as follows:
    ``(B) In the case of an individual entitled to benefits based on 
disability, the payment of such benefits shall be made to a 
representative payee if the Commissioner of Social Security determines 
that such payment would serve the interest of the individual because 
the individual also has an alcoholism or drug addiction condition (as 
determined by the Commissioner) and the individual is incapable of 
managing such benefits.''.
                    (B) Section 205(j)(2)(C)(v) of such Act (42 U.S.C. 
                405(j)(2)(C)(v)) is amended by striking ``entitled to 
                benefits'' and all that follows through ``under a 
                disability'' and inserting ``described in paragraph 
                (1)(B)''.
                    (C) Section 205(j)(2)(D)(ii)(II) of such Act (42 
                U.S.C. 405(j)(2)(D)(ii)(II)) is amended by striking all 
                that follows ``15 years, or'' and inserting ``described 
                in paragraph (1)(B).''.
                    (D) Section 205(j)(4)(A)(i)(II) of such Act (42 
                U.S.C. 405(j)(4)(A)(ii)(II)) is amended by striking 
                ``entitled to benefits'' and all that follows through 
                ``under a disability'' and inserting ``described in 
                paragraph (1)(B)''.
    (b) Amendments Relating to SSI Benefits.--
            (1) In general.--Section 1611(e)(3) of the Social Security 
        Act (42 U.S.C. 1382(e)(3)) is amended--
                    (A) by striking ``(B)'' and inserting ``(C)'';
                    (B) by striking ``(3)(A)'' and inserting ``(B)''; 
                and
                    (C) by inserting before subparagraph (B) as 
                redesignated by paragraph (2) the following new 
                subparagraph:
    ``(3)(A) No cash benefits shall be payable under this title to any 
individual who is otherwise eligible for benefits under this title by 
reason of disability, if such individual's alcoholism or drug addiction 
is a contributing factor material to the Commissioner's determination 
that such individual is disabled.''.
            (2) Treatment requirements.--
                    (A) Section 1611(e)(3)(B)(i)(I) of such Act (42 
                U.S.C. 1382(e)(3)(B)(i)(I)), as redesignated by 
                paragraph (1), is amended to read as follows:
    ``(B)(i)(I)(aa) Any individual who would be eligible for cash 
benefits under this title but for the application of subparagraph (A) 
may elect to comply with the provisions of this subparagraph.
            ``(bb) Any individual who is eligible for cash benefits 
        under this title by reason of disability (or whose eligibility 
        for such benefits is suspended) or is eligible for benefits 
        pursuant to section 1619(b), and who was eligible for such 
        benefits by reason of disability, for which such individual's 
        alcoholism or drug addiction was a contributing factor material 
        to the Commissioner's determination that such individual was 
        disabled, for the month preceding the month in which this 
        subparagraph takes effect, shall be required to comply with the 
        provisions of this subparagraph.''.
                    (B) Section 1611(e)(3)(B)(i)(II) of such Act (42 
                U.S.C. 1382(e)(3)(B)(i)(II)), as so redesignated, is 
                amended by striking ``who is required under subclause 
                (I)'' and inserting ``described in division (bb) of 
                subclause (I) who is required''.
                    (C) Subclauses (I) and (II) of section 
                1611(e)(3)(B)(ii) of such Act (42 U.S.C. 
                1382(e)(3)(B)(ii)), as so redesignated, are each 
                amended by striking ``clause (i)'' and inserting 
                ``clause (i)(I)''.
                    (D) Section 1611(e)(3)(B) of such Act (42 U.S.C. 
                1382(e)(3)(B)), as so redesignated, is amended by 
                striking clause (v) and by redesignating clause (vi) as 
                clause (v).
                    (E) Section 1611(e)(3)(B)(v) of such Act (42 U.S.C. 
                1382(e)(3)(B)(v)), as redesignated by subparagraph (D), 
                is amended--
                            (i) in subclause (I), by striking ``who is 
                        eligible'' and all that follows through ``is 
                        disabled'' and inserting ``described in clause 
                        (i)(I)''; and
                            (ii) in subclause (V), by striking ``or 
                        (v)''.
                    (F) Section 1611(e)(3)(C)(i) of such Act (42 U.S.C. 
                1382(e)(3)(C)(i)), as redesignated by paragraph (1), is 
                amended by striking ``who are receiving benefits under 
                this title and who as a condition of such benefits'' 
                and inserting ``described in subparagraph (B)(i)(I)(aa) 
                who elect to undergo treatment; and the monitoring and 
                testing of all individuals described in subparagraph 
                (B)(i)(I)(bb) who''.
                    (G) Section 1611(e)(3)(C)(iii)(II)(aa) of such Act 
                (42 U.S.C. 1382(e)(3)(C)(iii)(II)(aa)), as so 
                redesignated, is amended by striking ``residing in the 
                State'' and all that follows through ``they are 
                disabled'' and inserting ``described in subparagraph 
                (B)(i)(I) residing in the State''.
                    (H) Section 1611(e)(3)(C)(iii) of such Act (42 
                U.S.C. 1382(e)(3)(C)(iii)), as so redesignated, is 
                amended by adding at the end the following:
    ``(III) The monitoring requirements of subclause (II) shall not 
apply in the case of any individual described in subparagraph 
(B)(i)(I)(aa) who fails to comply with the requirements of subparagraph 
(B).''.
                    (I) Section 1611(e)(3) of such Act (42 U.S.C. 
                1382(e)(3)), as amended by paragraph (1), is amended by 
                adding at the end the following new subparagraphs:
    ``(D) The Commissioner shall provide appropriate notification to 
each individual subject to the limitation on cash benefits contained in 
subparagraph (A) and the treatment provisions contained in subparagraph 
(B).
    ``(E) The requirements of subparagraph (B) shall cease to apply to 
any individual if the Commissioner determines that such individual no 
longer needs treatment.''.
            (3) Representative payee requirements.--
                    (A) Section 1631(a)(2)(A)(ii)(II) of such Act (42 
                U.S.C. 1383(a)(2)(A)(ii)(II)) is amended to read as 
                follows:
    ``(II) In the case of an individual eligible for benefits under 
this title by reason of disability, the payment of such benefits shall 
be made to a representative payee if the Commissioner of Social 
Security determines that such payment would serve the interest of the 
individual because the individual also has an alcoholism or drug 
addiction condition (as determined by the Commissioner) and the 
individual is incapable of managing such benefits.''.
                    (B) Section 1631(a)(2)(B)(vii) of such Act (42 
                U.S.C. 1383(a)(2)(B)(vii)) is amended by striking 
                ``eligible for benefits'' and all that follows through 
                ``is disabled'' and inserting ``described in 
                subparagraph (A)(ii)(II)''.
                    (C) Section 1631(a)(2)(B)(ix)(II) of such Act (42 
                U.S.C. 1383(a)(2)(B)(ix)(II)) is amended by striking 
                all that follows ``15 years, or'' and inserting 
                ``described in subparagraph (A)(ii)(II).''.
                    (D) Section 1631(a)(2)(D)(i)(II) of such Act (42 
                U.S.C. 1383(a)(2)(D)(i)(II)) is amended by striking 
                ``eligible for benefits'' and all that follows through 
                ``is disabled'' and inserting ``described in 
                subparagraph (A)(ii)(II)''.
            (4) Preservation of medicaid eligibility.--Section 1634(e) 
        of such Act (42 U.S.C. 1382(e)) is amended--
                    (A) by striking ``clause (i) or (v) of section 
                1611(e)(3)(A)'' and inserting ``subparagraph (A) or 
                subparagraph (B)(i)(II) of section 1611(e)(3)''; and
                    (B) by adding at the end the following: ``This 
                subsection shall cease to apply to any such person if 
                the Commissioner determines that such person no longer 
                needs treatment.''.
            (5) Conforming amendment.--Section 201(c) of the Social 
        Security Independence and Program Improvements Act of 1994 (42 
        U.S.C. 425 note) is repealed.
    (c) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to applicants for 
        benefits under title II or title XVI of the Social Security Act 
        for months beginning on or after the date of the enactment of 
        this Act, without regard to whether regulations have been 
        issued to implement such amendments.
            (2) Application to current recipients.--Notwithstanding any 
        other provision of law, in the case of an individual who is 
        receiving benefits under title II of the Social Security Act or 
        supplemental security income benefits under title XVI of such 
        Act as of the date of the enactment of this Act and whose 
        entitlement or eligibility for such benefits would terminate by 
        reason of the amendments made by this section, such amendments 
        shall apply with respect to the benefits of such individual for 
        months beginning on or after January 1, 1997, and the 
        Commissioner of Social Security shall so notify the individual 
        not later than 90 days after the date of the enactment of this 
        Act.
            (3) Benefits under title xvi.--For purposes of this 
        subsection, the term ``benefits under title XVI of the Social 
        Security Act'' includes supplementary payments pursuant to an 
        agreement for Federal administration under section 1616(a) of 
        the Social Security Act, and payments pursuant to an agreement 
        entered into under section 212(b) of Public Law 93-66.
Output: Denies monthly cash disability benefits under titles II (Old Age, Survivors and Disability Insurance) (OASDI) and XVI (Supplemental Security Income) (SSI), respectively, of the Social Security Act for drug addicts and alcoholics whose substance abuse is a contributing factor material to their disability.  Allows such individuals, instead, to elect to undergo treatment for their substance abuse. (Currently, such recipients are required to undergo treatment only at approved facilities or institutions.) 
Revises OASDI and SSI program representative payee requirements to require the payment of program benefits through a representative payee if it is in the interest of an otherwise disabled individual with an alcohol or drug addiction condition who is incapable of managing such benefits. 
Preserves the Medicaid eligibility of SSI recipients denied cash disability benefits because of the connection between their drug addiction or alcoholism and their disability.