Social Security has done its job well for 77 years, paying Americans their earned benefits on time and in full. So it’s easy to forget what a big, important, and complicated job the Social Security Administration does and how much all Americans rely on them to get it right.
The horrific cases of children and vulnerable adults being abused and victimized by the very people who were entrusted with their Social Security benefits serves as a reminder that Americans pay the price if Congress doesn’t provide the leadership and the resources needed to get it right.
Social Security benefits currently keep more than 21 million Americans out of poverty, including 1.1 million children. For six out of ten seniors, Social Security provides more than half of their monthly income. Without Social Security, over 40 percent of our seniors would live in poverty. Even though their average benefits are lower, disabled workers rely even more heavily on Social Security - for the vast majority, Social Security is more than 75 percent of their income.
As they are for most Americans, Social Security benefits are critically important to some of our most vulnerable citizens - children, seniors with dementia, and other adults with cognitive or physical problems that prevent them from safely managing their own finances. In order to make sure that those Americans are protected, the Social Security Administration assigns them a “representative payee," who receives and manages their Social Security benefits.
About 15 percent of current Social Security beneficiaries have representative payees. About half are children -- and for them, their parents are mostly commonly the payee. The others are disabled adults or seniors who have the type of impairment which significantly limits their ability to manage their finances, such as an intellectual disability or dementia. Of course, there are also many beneficiaries who are paid directly by Social Security, but receive informal help from friends and family.
While most payees do a good job, some do not - and with devastating consequences. Misuse of benefits by a payee is often part of an overall pattern of abuse and maltreatment.
For example: An extremely disturbing case in Philadelphia involved not only the misuse of Social Security benefits, but imprisonment, slavery, physical abuse and the death of adults with mental disabilities. Another notorious case in Iowa involved dozens of disabled men under the care of a state agency who worked and lived in substandard conditions, were paid a pittance for their work -- in violation of minimum wage law - and whose payee did not use their benefits to care for them.
Misuse of Social Security is not the only problem in these situations, but the fact that the abuse was committed by someone who had been entrusted with the victim’s Social Security benefits made the cases even more horrifying.
SSA cannot, by itself, protect individuals from such predators. SSA is primarily a check-disbursing agency, and that’s where its expertise lies - they pay the right benefit to the right person at the right time.
But, given the right resources and the adequate staff, it can partner with protective services and other community organizations who are charged with detecting, stopping and preventing abuse of adults and children -- both to protect the Social Security benefits and because the assignment of a representative payee is an opportunity to discover some of these abusive situations.
In recent years, SSA has begun to work more with the state Protection and Advocacy agencies, who have deep expertise in this area and have been very helpful in monitoring representative payees and advocating for beneficiaries. But clearly we need to do much more.
We have to fix the policies and provide the resources now, because the challenge of protecting vulnerable Americans will only grow as our population ages.
In the coming years, a larger share of seniors will be over 80 - ages at which they are both more likely to depend on Social Security, and more likely to need help managing their benefits. Research shows that the incidence of Alzheimer’s and other forms of dementia increases with age.
We also know that older seniors rely much more heavily on Social Security. Almost three-fourths of seniors over 80 rely on Social Security for more than half their income, as compared to about 50 percent of those under 69. And those elderly seniors spend an average of two-thirds or more of their income on basic necessities like food, housing, and health care.
While policies matter, you get what you pay for. There is no substitute for providing SSA with the staff and resources it needs to recruit, train, and monitor the representative payees being trusted with other people’s Social Security checks.
A series of budget cuts and the sequester mean SSA’s budget is about $800 million lower this year than it was in 2010, even though the number of Americans Social Security serves continues to grow.
SSA’s employees have worked harder, faster, and smarter in every way they can, and have tried heroically to shield Americans from the effects of these cuts.
But even with their efforts the budget cuts have forced SSA to institute a hiring freeze at local Social Security offices and have all but eliminated their staff training budget. These local offices have the primary responsibility for finding, assigning, and monitoring representative payees.
Since 2010, local SSA offices have lost more than 10 percent of their staff, including some of their most experienced caseworkers. Social Security offices have growing backlogs of unprocessed work, including monitoring representative payees. SSA estimates that this year, its backlog of work related to ensuring timely and accurate payments to current beneficiaries -- which includes monitoring representative payees -- will reach 7,500 work years. That is, SSA would need to have 7,500 additional employees on staff, working all year long, in order to complete all of the backlogged work.
These types of budget cuts can be particularly harmful to some of the most vulnerable Americans - those who require assistance managing their benefits. Some have no family members or friends who are available and willing to serve as a payee. And community organizations are not always available to fulfill this role. And sometimes, even family members can act against their own child’s or elderly parent’s interests. Finding payees for hard-to-serve beneficiaries, and monitoring the performance of all payees is a time-consuming job for SSA employees.
While we can and should look at our policies to see if we can improve them, there is no substitute for providing the resources necessary so that SSA can effectively do its part to protect our most vulnerable Americans.
Mr. Chairman, Social Security’s representative payee program is just a small piece of the safety net needed to protect some of our most vulnerable Americans. It is just one of the vitally important things our government does, and needs to do well.
Thank you for holding this hearing so that the problem is clearly laid out. I hope there’s never another horror story in the representative payee program. SSA has shown the will and the desire to improve this program, and they’ve made some important improvements. But they’ve been limited by the budget cuts House Republicans have forced through over the past few years. Let’s work together to get the policies right, but also to pay what it takes to put them in place.
