Representative Payment Policies and Administrative Procedure for Imposing Penalties for False or Misleading Statements or Withholding of Information, 60251-60256 [05-20697]
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Federal Register / Vol. 70, No. 199 / Monday, October 17, 2005 / Proposed Rules
SOCIAL SECURITY ADMINISTRATION
20 CFR Parts 404, 408 and 416
RIN 0960–AG09
Representative Payment Policies and
Administrative Procedure for Imposing
Penalties for False or Misleading
Statements or Withholding of
Information
AGENCY:
Social Security Administration
(SSA).
ACTION:
Proposed rules.
Electronic Version
We propose to amend our
regulations on representative payment
and on the administrative procedure for
imposing penalties for false or
misleading statements or withholding of
information to reflect and implement
certain provisions of the Social Security
Protection Act of 2004 (SSPA), Public
Law 108–203. The SSPA amends
representative payment policies by
providing additional safeguards for
Social Security, Special Veterans and
Supplemental Security Income
beneficiaries served by representative
payees. These changes include
additional disqualifying factors for
representative payee applicants,
additional requirements for nongovernmental fee-for-service payees,
authority to redirect delivery of benefit
payments when a representative payee
fails to provide required accountings,
and authority to treat misused benefits
as an overpayment to the representative
payee. In addition, we propose to
modify our rules to explain financial
requirements for representative payees,
and we also have made minor clarifying
plain language changes.
The SSPA also allows SSA to impose
a penalty on any person who knowingly
withholds information that is material
for use in determining any right to or
the amount of monthly benefits under
titles II or XVI. The penalty is
nonpayment for a specified number of
months of benefits under title II that
would otherwise be payable and
ineligibility for the same period of time
for cash benefits under title XVI
(including State supplementary
payments).
SUMMARY:
To consider your comments, we
must receive them no later than
December 16, 2005.
ADDRESSES: You may give us your
comments by: using our Internet facility
(i.e., Social Security Online) at https://
policy.ssa.gov/pnpublic.nsf/LawsRegs or
the Federal eRulemaking Portal at
https://www.regulations.gov; e-mail to
regulations@ssa.gov; telefax to (410)
966–2830; or letter to the Commissioner
DATES:
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of Social Security, P.O. Box 17703,
Baltimore, MD 21235–7703. You may
also deliver them to the Office of
Regulations, Social Security
Administration, 100 Altmeyer Building,
6401 Security Boulevard, Baltimore, MD
21235–6401, between 8 a.m. and 4:30
p.m. on regular business days.
Comments are posted on our Internet
site, or you may inspect them physically
on regular business days by making
arrangements with the contact person
shown in this preamble.
Jkt 208001
The electronic file of this document is
available on the date of publication in
the Federal Register on the Internet site
for the Government Printing Office,
https://www.gpoaccess.gov/fr/
index.html. It is also available on the
Internet site for SSA (i.e., Social
Security Online) at https://
policy.ssa.gov/pnpublic.nsf/LawsRegs.
FOR FURTHER INFORMATION CONTACT:
Regarding this Federal Register
document—Robert Augustine, Social
Insurance Specialist, Office of
Regulations, Social Security
Administration, 6401 Security
Boulevard, Baltimore, MD 21235–6401,
(410) 965–0020 or TTY (410) 966–5609;
regarding eligibility or filing for
benefits—our national toll-free number,
1–800–772–1213 or TTY 1–800–325–
0778 or visit our Internet Web site,
Social Security Online, at https://
www.socialsecurity.gov.
SUPPLEMENTARY INFORMATION:
Background
Public Law 108–203, the SSPA,
enacted March 2, 2004, requires a
number of changes to representative
payee policy and procedures. A
representative payee is the person,
agency, organization, or institution
selected to receive and manage benefits
on behalf of an incapable beneficiary.
This includes a parent who is receiving
benefits on behalf of his or her minor
child. The SSPA also changes the rules
for imposing penalties for false or
misleading statements or for
withholding information.
Section 102 of the SSPA requires nongovernmental fee-for-service
organizational representative payees to
be both bonded and licensed, provided
that licensing is available in the State.
Section 103 of the SSPA expands the
scope of disqualification to prohibit an
individual from serving as a
representative payee if he or she: (1) Has
been convicted of any offense resulting
in imprisonment for more than 1 year,
unless the Commissioner of Social
Security determines that an exception to
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60251
this prohibition is appropriate; or (2) is
fleeing to avoid prosecution, or custody
or confinement after conviction of a
crime that is a felony.
Section 104 of the SSPA requires feefor-service representative payees to
forfeit their fees for any months during
which they misuse all or part of any
beneficiary’s benefits.
Section 105 of the SSPA makes nongovernmental representative payees
liable for any benefits they misuse and
requires SSA to treat such misused
benefits as overpayments to the
representative payees, subject to
overpayment recovery authorities.
Section 106 of the SSPA authorizes
the Commissioner of Social Security to
require a representative payee to receive
benefits in person at a Social Security
field office or a United States
Government facility designated by the
Social Security Administration if the
payee fails to provide an annual
accounting of benefits report or other
requested information.
In addition to the changes required by
Public Law 108–203, we propose to
clarify financial requirements for
representative payees. Our current
regulations specify that the interest
earned on conserved funds belongs to
the beneficiary. However, the
regulations do not specifically address
interest earned on current benefits or
how current benefits should be held. We
propose to specify that a representative
payee must keep any payments received
for the beneficiary separate from the
representative payee’s own funds and
ensure that the beneficiary’s ownership
is shown unless the representative
payee is the spouse or parent of the
beneficiary and lives in the same
household with the beneficiary. We also
propose to provide for an exception to
this requirement for State or local
government agencies when we
determine that their accounting
structure sufficiently protects the
beneficiaries’ interest in the benefits
(i.e., accounting structure clearly
identifies what funds belong to the
beneficiary). We further propose to
specify that the payee must treat any
interest earned on current benefits as
the beneficiary’s own property. In
addition, we propose to clarify that the
payee is responsible for making records
available for review if requested by us.
These records must be examined when
conducting our site visits.
Section 201(a)(2) of the SSPA
amended section 1129A of the Act to
help prevent and respond to fraud and
abuse in SSA’s programs and
operations. Prior to its amendment by
the SSPA, section 1129A allowed SSA
to impose a penalty against any person
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who makes, or causes to be made, a
statement or representation of a material
fact that the person knows or should
know is false or misleading or that omits
a material fact, or that the person makes
with a knowing disregard for the truth.
The statement must have been made for
use in determining eligibility for or the
amount of benefits under titles II or XVI.
The penalty is nonpayment for 6, 12 or
24 months of benefits under title II that
would otherwise be payable to the
person and ineligibility for the same
period of time for cash benefits under
title XVI (including State supplementary
payments made by SSA according to
§ 416.2005).
Section 201(a)(2) amended section
1129A to also allow SSA to impose this
penalty against any person who
withholds disclosure of information that
is material for use in determining any
right to or the amount of monthly
benefits under titles II or XVI if the
person knows, or should know, that the
withholding of such disclosure is
misleading. Prior to the enactment of
section 201(a)(2), in order for a penalty
to be imposed, the law required an
affirmative act on the part of the
individual of making a statement that
omitted a material fact.
This new penalty under section
1129A of the Act will be effective with
respect to violations committed after the
date on which SSA implements the
centralized computer file described in
section 202 of the SSPA. This
centralized computer file will
electronically record information about
changes in work status that a disability
beneficiary (or representative) reports to
SSA and is expected to be implemented
in February 2006.
Explanation of Proposed Changes on
Representative Payment
Because our regulations for
representative payment under the title
VIII program cross-reference the
appropriate material in our title II
representative payment rules, most of
the changes we now propose to our title
II representative payment regulations
would also apply to title VIII. Where
only a cross-reference to the title II rules
would not be sufficient, we propose a
specific rule for title VIII.
We are proposing the following policy
changes to our representative payment
regulations:
1. We propose to amend §§ 404.2022
and 416.622 to explain that a person
who is convicted of an offense resulting
in imprisonment for more than 1 year
may not serve as a representative payee.
These sections also would explain that
we may make an exception to this rule
if the nature of the conviction poses no
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risk to the beneficiary and selection of
the applicant is in the beneficiary’s best
interest. In addition, these sections
would explain that a person who is
fleeing prosecution, custody or
confinement for a crime, or an attempt
to commit a crime that is a felony may
not serve as a representative payee. If
we identify a currently serving payee
who is no longer qualified for this
reason, we will allow them 10 days to
respond to notification before making
any payee change.
2. We propose to amend §§ 404.2035
and 416.635 to explain that a
representative payee must keep any
payments received for the beneficiary
separate from the payee’s own funds
and ensure the beneficiary’s ownership
is shown unless the payee is the spouse
or parent of the beneficiary and lives in
the same household with the
beneficiary. We also propose to provide
for an exception to this requirement for
State or local government agencies that
use a different accounting structure. We
would grant such an exception to a State
or local government agency if we
determine that its accounting structure
sufficiently protects the beneficiaries’
interest in the benefits. Also, these
sections would explain that the payee
must treat any interest earned on
current benefits as the beneficiary’s own
property.
3. We propose to amend §§ 404.2035
and 416.635 to require representative
payees to make available to us their
records supporting their written
accounting reports. We believe those
records are essential to verify the
written reports.
4. We propose to amend existing
§§ 404.2040a and 416.640a to require
fee-for-service non-governmental
community-based nonprofit
organizational representative payees to
be both bonded and licensed (provided
that licensing is available in the State).
The bond would have to be of a
sufficient amount to repay any funds
(current social security benefits and
supplemental security income payments
plus any conserved funds and interest)
lost by the beneficiaries in the event of
misuse or theft, and the license would
have to be appropriate under the laws
of the State for the type of services the
organization provides. These bonding
and licensing requirements would not
apply to the title VIII program. In
addition, these sections would explain
that a fee-for-service representative
payee must forfeit its fee for the months
during which it misused benefits.
5. We propose to amend §§ 404.2041
and 416.641 to explain that a nongovernmental representative payee will
be liable for any benefits it misuses and
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Sfmt 4702
that SSA will treat the misused benefits
as an overpayment to the representative
payee, subject to overpayment recovery
authorities.
6. We propose to amend §§ 404.2065
and 416.665 to explain that we may
require a representative payee to receive
benefits in person at a local Social
Security field office or a United States
Government facility designated by the
Social Security Administration if the
payee fails to provide an annual
accounting of benefits or other
requested information. We propose to
make a similar amendment to § 408.665,
but the benefits would be directed to a
United States Government facility
designated by the Social Security
Administration.
Explanation of Proposed Changes on
Administrative Procedures for
Imposing Administrative Penalties
We propose to amend §§ 404.459 and
416.1340 of our regulations by revising
the heading and paragraphs (a) and (e)
of each section to reflect that, as a result
of section 201 of the SSPA, an
individual will be subject to the penalty
if he or she withholds information that
is material for use in determining any
right to or the amount of monthly
benefits under title II or XVI if the
person knows, or should know, that the
withholding of the information is
misleading.
Clarity of These Regulations
Executive Order 12866, as amended
by Executive Order 13258, requires each
agency to write all rules in plain
language. In addition to comments you
may have on the substance of these
proposed rules, we also invite your
comments on how to make these rules
easier to understand. For example:
• Have we organized the material to
suit your needs?
• Are the requirements in the rules
clearly stated?
• Do the rules contain technical
language or jargon that is not clear?
• Would a different format (grouping
and order of sections, use of headings,
paragraphing) make the rules easier to
understand?
• Would more (but shorter) sections
be better?
• Could we improve clarity by adding
tables, lists, or diagrams?
• What else could we do to make the
rules easier to understand?
Regulatory Procedures
Executive Order 12866
We have consulted with the Office of
Management and Budget (OMB) and
determined that these proposed rules
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meet the criteria for a significant
regulatory action under Executive Order
12866, as amended by Executive Order
13258. Thus, the rules have been
reviewed by OMB.
Executive Order 13132 (Federalism) and
the Unfunded Mandates Reform Act of
1995
We have reviewed the proposed rules
for compliance with Executive Order
13132 and the Unfunded Mandates
Reform Act of 1995 (UMRA of 1995).
We have determined that the proposed
rules are not significant within the
meaning of the UMRA of 1995 nor will
they have any substantial direct effects
on the States, on the relationship
between the federal government and the
States, or on the distribution of power
and responsibilities among the various
levels of government within the
meaning of Executive Order 13132.
The provision requiring a State
license for certain qualified
organizations seeking compensation for
serving as representative payees affects
a very small number of organizational
payees and will not significantly impact
the States. First, the total number of
organizations seeking compensation is
very small, approximately 800. There
are a significant number of State or local
government agencies within this group
which we do not require to be licensed.
Only the small number of remaining
organizations (community-based
nonprofit social service organizations)
must seek State licensing. Second, such
organizations should already have
obtained the necessary license to be in
compliance with State law. Therefore,
the very small number of organizations
seeking a State license will not
significantly impact the States.
Regulatory Flexibility Act
We certify that these proposed rules
will not have a significant economic
impact on a substantial number of small
entities. Therefore, a regulatory
flexibility analysis, as provided for in
the Regulatory Flexibility Act, as
amended, is not required.
Paperwork Reduction Act
These proposed rules contain
reporting requirements as shown in the
table below. Where the public reporting
burden is accounted for in Information
Collection Requests for the various
forms that the public uses to submit the
information to SSA, a 1-hour
placeholder burden is being assigned to
the specific reporting requirement(s)
contained in these rules; we are seeking
clearance of these burdens because they
were not considered during the
clearance of the forms.
Section
Annual
number of
responses
Frequency of
response
Average
burden per
response
404.2035(d) ......................................................................................................
404.2035(e); 404.2065; 408.665 .....................................................................
404.2035(f) .......................................................................................................
416.635(d) ........................................................................................................
416.635(e); 416.665 ........................................................................................
416.635(f) .........................................................................................................
550,000
........................
5,500
300,000
........................
3,000
1
........................
1
1
........................
1
.083
........................
.083
.083
........................
.083
45,650
1
457
24,900
1
250
Total ..........................................................................................................
858,500
........................
........................
71,257
An Information Collection Request
has been submitted to OMB. We are
soliciting comments on the burden
estimate; the need for the information;
its practical utility; ways to enhance its
quality, utility and clarity; and on ways
to minimize the burden on respondents,
including the use of automated
collection techniques or other forms of
information technology. Comments
should be submitted and/or faxed to
OMB and to the Social Security
Administration at the following
addresses/numbers: Office of
Management and Budget, Attn: Desk
Officer for SSA, Fax Number: 202–395–
6974. Social Security Administration,
Attn: SSA Reports Clearance Officer,
Rm: 1338 Annex Building, 6401
Security Boulevard, Baltimore, MD
21235–6401, Fax Number: 410–965–
6400.
Comments can be received for up to
60 days after publication of this notice
and will be most useful if received
within 30 days of publication. To
receive a copy of the OMB clearance
package, you may call the SSA Reports
Clearance Officer on 410–965–0454.
(Catalog of Federal Domestic Assistance
Program Nos. 96.001, Social Security-
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Jkt 208001
Disability Insurance; 96.002, Social SecurityRetirement Insurance; 96.004, Social
Security-Survivors Insurance; 96.006,
Supplemental Security Income; 96.020,
Special Benefits for Certain World War II
Veterans)
List of Subjects
20 CFR Part 404
Administrative practice and
procedure, Blind, Disability benefits,
Old-Age, Survivors and Disability
Insurance; Reporting and recordkeeping
requirements, Social Security.
Administrative practice and
procedure, Aged; Reporting and
recordkeeping requirements, Social
Security; Special Veterans benefits;
Veterans.
20 CFR Part 416
Administrative practice and
procedure, Aged, Blind, Disability
benefits, Public assistance programs,
Reporting and recordkeeping
requirements, Supplemental security
income (SSI).
Frm 00019
Fmt 4702
Dated: October 7, 2005.
Jo Anne B. Barnhart,
Commissioner of Social Security.
For the reasons set out in the
preamble, we propose to amend
subparts E and U of part 404, subpart F
of part 408, and subparts F and M of
part 416 of Title 20 of the Code of
Federal Regulations as follows:
PART 404—FEDERAL OLD-AGE,
SURVIVORS AND DISABILITY
INSURANCE (1950–
)
Subpart E—[Amended]
20 CFR Part 408
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Estimated annual burden
Sfmt 4702
1. The authority citation for subpart E
of part 404 continues to read as follows:
Authority: Secs. 202, 203, 204(a) and (e),
205(a) and (c), 216(l), 223(e), 224, 225,
702(a)(5), and 1129A of the Social Security
Act (42 U.S.C. 402, 403, 404(a) and (e), 405(a)
and (c), 416(l), 423(e), 424a, 425, 902(a)(5),
1320a–8a) and 48 U.S.C. 1801.
2. Amend § 404.459 by revising the
heading and paragraphs (a) and (e) to
read as follows:
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§ 404.459 Penalty for making false or
misleading statements or withholding
information.
disclose in terms of its likely impact on
your benefits.
*
*
*
*
*
(a) When may SSA penalize me? You
will be subject to a penalty if:
(1) You make, or cause to be made, a
statement or representation of a material
fact, for use in determining any initial
or continuing right to, or the amount of,
monthly insurance benefits under title II
or benefits or payments under title XVI,
that you know or should know is false
or misleading, or
(2) You make a statement or
representation of a material fact for use
as described in paragraph (a)(1) of this
section with knowing disregard for the
truth, or
(3) You omit from a statement or
representation made for use as
described in paragraph (a)(1) of this
section, or otherwise withhold
disclosure (for example, fail to come
forward to notify SSA) of a fact which
you know or should know is material to
the determination of any initial or
continuing right to, or the amount of,
monthly insurance benefits under title II
or benefits or payments under title XVI,
if you know, or should know, that the
statement or representation with such
omission is false or misleading or that
the withholding of such disclosure is
misleading.
*
*
*
*
*
(e) How will SSA make its decision to
penalize me? In order to impose a
penalty on you, we must find that you
knowingly (knew or should have known
or acted with knowing disregard for the
truth) made a false or misleading
statement or omitted or failed to report
a material fact if you knew, or should
have known, that the omission or failure
to disclose was misleading. We will
base our decision to penalize you on the
evidence and the reasonable inferences
that can be drawn from that evidence,
not on speculation or suspicion. Our
decision to penalize you will be
documented with the basis and
rationale for that decision. In
determining whether you knowingly
made a false or misleading statement or
omitted or failed to report a material fact
so as to justify imposition of the
penalty, we will consider all evidence
in the record, including any physical,
mental, educational, or linguistic
limitations (including any lack of
facility with the English language)
which you may have had at the time. In
determining whether you acted
knowingly, we will also consider the
significance of the false or misleading
statement or omission or failure to
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Subpart U—[Amended]
3. The authority citation for subpart U
of part 404 continues to read as follows:
Authority: Secs. 205(a), (j), and (k), and
702(a)(5) of the Social Security Act (42 U.S.C.
405(a), (j), and (k), and 902(a)(5)).
4. Amend § 404.2022 by redesignating
paragraphs (b), (c) and (d) as paragraphs
(d), (e) and (f) and adding new
paragraphs (b) and (c) to read as follows:
§ 404.2022 Who may not serve as a
representative payee?
*
*
*
*
*
(b) Is fleeing to avoid prosecution, or
custody or confinement after conviction
of a crime, or an attempt to commit a
crime, that is a felony under the laws of
the place from which he/she flees (or, in
jurisdictions that do not define crimes
as felonies, is punishable by death or
imprisonment for a term exceeding one
year, regardless of the actual sentence
imposed). If we identify a currently
serving payee who is no longer qualified
for this reason, we will allow them 10
days to respond to notification before
making any payee change.
(c) Has been convicted of an offense
resulting in imprisonment for more than
1 year. However, we may make an
exception to this prohibition, if the
nature of the conviction is such that
selection of the applicant poses no risk
to the beneficiary and the exception is
in the beneficiary’s best interest.
*
*
*
*
*
5. Revise § 404.2035 to read as
follows:
§ 404.2035 What are the responsibilities of
your representative payee?
A representative payee has a
responsibility to—
(a) Use the benefits received on your
behalf only for your use and benefit in
a manner and for the purposes he or she
determines, under the guidelines in this
subpart, to be in your best interests.
(b) Keep any benefits received on your
behalf separate from his or her own
funds and show your ownership of
these benefits unless he or she is your
spouse or natural or adoptive parent or
stepparent and lives in the same
household with you or is a State or local
government agency for whom we have
granted an exception to this
requirement.
(c) Treat any interest earned on the
benefits as your property.
(d) Notify us of any event or change
in your circumstances that will affect
the amount of benefits you receive, your
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Sfmt 4702
right to receive benefits, or how you
receive them;
(e) Submit to us, upon our request, a
written report accounting for the
benefits received on your behalf, and
make all supporting records available
for review if requested by us; and
(f) Notify us of any change in his or
her circumstances that would affect
performance of his/her payee
responsibilities.
6. Amend § 404.2040a by revising
paragraph (a)(2), redesignating
paragraph (g)(6) as (g)(7), and adding a
new paragraph (g)(6) to read as follows:
§ 404.2040a Compensation for qualified
organizations serving as representative
payees.
*
*
*
*
*
(a) * * *
(2) Any community-based nonprofit
social service organization founded for
religious, charitable or social welfare
purposes, which is tax exempt under
section 501(c) of the Internal Revenue
Code and which is bonded/insured to
cover misuse and embezzlement by
officers and employees and which is
licensed in each State in which it serves
as representative payee (if licensing is
available in the State). The minimum
amount of bonding or insurance
coverage must equal the average
monthly amount of social security
payments received by the organization
plus the amount of the beneficiaries’
conserved funds (i.e., beneficiaries’
saved social security benefits) plus
interest on hand. For example, an
organization that has conserved funds of
$5,000 and receives an average of
$12,000 a month in social security
payments must be bonded/insured for a
minimum of $17,000. The license must
be appropriate under the laws of the
State for the type of services the
organization provides. An example of an
appropriately licensed organization is a
community mental health center
holding a State license to provide
community mental health services.
*
*
*
*
*
(g) * * *
(6) Fees for services may not be taken
from beneficiary benefits for the months
for which the Commissioner or a court
of competent jurisdiction determines
that the representative payee misused
benefits. Any fees collected for such
months will be treated as a part of the
beneficiary’s misused benefits.
*
*
*
*
*
7. Amend § 404.2041 by adding a new
paragraph (f) to read as follows:
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§ 404.2041 Who is liable if your
representative payee misuses your
benefits?
*
*
*
*
*
(f) Any amounts that the
representative payee misuses and does
not refund will be treated as an
overpayment to that representative
payee. See subpart F of part 404.
8. Amend § 404.2065 by revising the
introductory text to read as follows:
§ 404.2065 How does your representative
payee account for the use of benefits?
Your representative payee must
account for the use of your benefits. We
require written reports from your
representative payee at least once a year
(except for certain State institutions that
participate in a separate onsite review
program). We may verify how your
representative payee used your benefits.
Your representative payee should keep
records of how benefits were used in
order to make accounting reports and
must make those records available upon
our request. If your representative payee
fails to provide an annual accounting of
benefits or other required reports, we
may require your payee to receive your
benefits in person at the local Social
Security field office or a United States
Government facility designated by the
Social Security Administration serving
the area in which you reside. The
decision to have your representative
payee receive your benefits in person
may be based on a variety of reasons.
Some of these reasons may include the
payee’s history of past performance or
SSA’s past difficulty in contacting the
payee. We may ask your representative
payee to give us the following
information:
*
*
*
*
*
PART 408—SPECIAL BENEFITS FOR
CERTAIN WORLD WAR II VETERANS
(SVB)
Subpart F—[Amended]
9. The authority citation for subpart F
of part 408 continues to read as follows:
Authority: Secs. 702(a)(5), 807, and 810 of
the Social Security Act (42 U.S.C. 902(a)(5),
1007, and 1010).
10. Revise § 408.665 to read as
follows:
§ 408.665 How does your representative
payee account for the use of your SVB
benefits?
Your representative payee must
account for the use of your benefits. We
require written reports from your
representative payee at least once a year.
We may verify how your representative
payee used your benefits. Your
representative payee should keep
VerDate Aug<31>2005
11:41 Oct 14, 2005
Jkt 208001
records of how benefits were used in
order to provide accounting reports and
must make those records available upon
our request. If your representative payee
fails to provide an annual accounting of
benefits or other required report, we
may require your payee to appear in
person at a United States Government
facility designated by the Social
Security Administration serving the area
in which you reside. The decision to
have your representative payee receive
your benefits in person may be based on
a variety of reasons. Some of these
reasons may include the payee’s history
of past performance or SSA’s past
difficulty in contacting the payee. We
may ask your representative payee to
give us the following information:
(a) Where you lived during the
accounting period;
(b) Who made the decisions on how
your benefits were spent or saved;
(c) How your benefit payments were
used; and
(d) How much of your benefit
payments were saved and how the
savings were invested.
PART 416—SUPPLEMENTAL
SECURITY INCOME FOR THE AGED,
BLIND AND DISABLED
Subpart F—[Amended]
11. The authority citation for subpart
F continues to read as follows:
Authority: Secs. 702(a)(5), 1631(a)(2) and
(d)(1) of the Social Security Act (42 U.S.C.
902(a)(5) and 1383(a)(2) and (d)(1)).
12. Amend § 416.622 by redesignating
paragraphs (b), (c) and (d) as paragraphs
(d), (e) and (f) and adding new
paragraphs (b) and (c) to read as follows:
§ 416.622 Who may not serve as a
representative payee?
*
*
*
*
*
(b) Is fleeing to avoid prosecution, or
custody or confinement after conviction
of a crime, or an attempt to commit a
crime, that is a felony under the laws of
the place from which he/she flees (or in
jurisdictions that do not define crimes
as felonies, is punishable by death or
imprisonment for a term exceeding one
year, regardless of the actual sentence
imposed). If we identify a currently
serving payee who is no longer qualified
for this reason, we will allow them 10
days to respond to notification before
making any payee change.
(c) Has been convicted of an offense
resulting in imprisonment for more than
1 year. However, we may make an
exception to this prohibition, if the
nature of the conviction is such that
selection of the applicant poses no risk
PO 00000
Frm 00021
Fmt 4702
Sfmt 4702
60255
to the beneficiary and the exception is
in the beneficiary’s best interest.
*
*
*
*
*
13. Revise § 416.635 to read as
follows:
§ 416.635 What are the responsibilities of
your representative payee?
A representative payee has a
responsibility to—
(a) Use the benefits received on your
behalf only for your use and benefit in
a manner and for the purposes he or she
determines under the guidelines in this
subpart, to be in your best interests.
(b) Keep any benefits received on your
behalf separate from his or her own
funds and show your ownership of
these benefits unless he or she is your
spouse or natural or adoptive parent or
stepparent and lives in the same
household with you or is a State or local
government agency for whom we have
granted an exception to this
requirement.
(c) Treat any interest earned on the
benefits as your property.
(d) Notify us of any event or change
in your circumstances that will affect
the amount of benefits you receive, your
right to receive benefits, or how you
receive them;
(e) Submit to us, upon our request, a
written report accounting for the
benefits received on your behalf, and
make all supporting records available
for review if requested by us; and
(f) Notify us of any change in his or
her circumstances that would affect
performance of his/her payee
responsibilities.
(g) If you are under age 18 (including
cases in which your low birth weight is
a contributing factor material to our
determination that you are disabled),
ensure that you are receiving treatment
to the extent considered medically
necessary and available for the
condition that was the basis for
providing benefits (see § 416.994a(i)).
14. Amend § 416.640a by revising
paragraph (a)(2), redesignating
paragraph (g)(6) as (g)(7), and adding a
new paragraph (g)(6) to read as follows:
§ 416.640a Compensation for qualified
organizations serving as representative
payees.
*
*
*
*
*
(a) * * *
(2) Any community-based nonprofit
social service organization founded for
religious, charitable or social welfare
purposes, which is tax exempt under
section 501(c) of the Internal Revenue
Code and which is bonded/insured to
cover misuse and embezzlement by
officers and employees and licensed in
each State in which it serves as
E:\FR\FM\17OCP1.SGM
17OCP1
60256
Federal Register / Vol. 70, No. 199 / Monday, October 17, 2005 / Proposed Rules
representative payee (if licensing is
available in the State). The minimum
amount of bonding or insurance
coverage must equal the average
monthly amount of supplemental
security income payments received by
the organization plus the amount of the
beneficiaries’ conserved funds (i.e.,
beneficiaries’ saved supplemental
security income payments) plus interest
on hand. For example, an organization
that has conserved funds of $5,000 and
receives an average of $12,000 a month
in supplemental security income
payments must be bonded/insured for a
minimum of $17,000. The license must
be appropriate under the laws of the
State for the type of services the
organization provides. An example of an
appropriately licensed organization is a
community mental health center
holding a State license to provide
community mental health services.
*
*
*
*
*
(g) * * *
(6) Fees for services may not be taken
from beneficiary benefits for the months
for which the Commissioner or a court
of competent jurisdiction determines
that the representative payee misused
benefits. Any fees collected for such
months will be treated as a part of the
beneficiary’s misused benefits.
*
*
*
*
*
15. Amend § 416.641 by adding a new
paragraph (f) to read as follows:
§ 416.641 Who is liable if your
representative payee misuses your
benefits?
*
*
*
*
*
(f) Any amounts that the
representative payee misuses and does
not refund will be treated as an
overpayment to that representative
payee. See subpart E of part 416.
16. Amend § 416.665 by revising the
introductory text to read as follows:
§ 416.665 How does your representative
payee account for the use of benefits?
Your representative payee must
account for the use of your benefits. We
require written reports from your
representative payee at least once a year
(except for certain State institutions that
participate in a separate onsite review
program). We may verify how your
representative payee used your benefits.
Your representative payee should keep
records of how benefits were used in
order to make accounting reports and
must make those records available upon
our request. If your representative payee
fails to provide an annual accounting of
benefits or other required reports, we
may require your payee to receive your
benefits in person at the local Social
Security field office or a United States
VerDate Aug<31>2005
11:41 Oct 14, 2005
Jkt 208001
Government facility designated by the
Social Security Administration serving
the area in which you reside. The
decision to have your representative
payee receive your benefits in person
may be based on a variety of reasons.
Some of these reasons may include the
payee’s history of past performance or
SSA’s past difficulty in contacting the
payee. We may ask your representative
payee to give us the following
information:
*
*
*
*
*
Subpart M—[Amended]
17. The authority citation for subpart
M of part 416 continues to read as
follows:
Authority: Secs. 702(a)(5), 1129A, 1611–
1614, 1619, and 1631 of the Social Security
Act (42 U.S.C. 902(a)(5), 1320a–8a, 1382–
1382c, 1382h, and 1383).
18. Amend § 416.1340 by revising the
heading and paragraphs (a) and (e) to
read as follows:
§ 416.1340 Penalty for making false or
misleading statements or withholding
information.
(a) When may SSA penalize me? You
will be subject to a penalty if:
(1) You make, or cause to be made, a
statement or representation of a material
fact, for use in determining any initial
or continuing right to, or the amount of,
monthly insurance benefits under title II
or benefits or payments under title XVI,
that you know or should know is false
or misleading, or
(2) You make a statement or
representation of a material fact for use
as described in paragraph (a)(1) of this
section with knowing disregard for the
truth, or
(3) You omit from a statement or
representation made for use as
described in paragraph (a)(1) of this
section, or otherwise withhold
disclosure (for example, fail to come
forward to notify SSA) of, a fact which
you know or should know is material to
the determination of any initial or
continuing right to, or the amount of,
monthly insurance benefits under title II
or benefits or payments under title XVI,
if you know, or should know, that the
statement or representation with such
omission is false or misleading or that
the withholding of such disclosure is
misleading.
*
*
*
*
*
(e) How will SSA make its decision to
penalize me? In order to impose a
penalty on you, we must find that you
knowingly (knew or should have known
or acted with knowing disregard for the
truth) made a false or misleading
statement or omitted or failed to report
PO 00000
Frm 00022
Fmt 4702
Sfmt 4702
a material fact if you knew, or should
have known, that the omission or failure
to disclose was misleading. We will
base our decision to penalize you on the
evidence and the reasonable inferences
that can be drawn from that evidence,
not on speculation or suspicion. Our
decision to penalize you will be
documented with the basis and
rationale for that decision. In
determining whether you knowingly
made a false or misleading statement or
omitted or failure to report a material
fact so as to justify imposition of the
penalty, we will consider all evidence
in the record, including any physical,
mental, educational, or linguistic
limitations (including any lack of
facility with the English language)
which you may have had at the time. In
determining whether you acted
knowingly, we will also consider the
significance of the false or misleading
statement or omission or failure to
disclose in terms of its likely impact on
your benefits.
*
*
*
*
*
[FR Doc. 05–20697 Filed 10–14–05; 8:45 am]
BILLING CODE 4191–02–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 801
[REG–114444–05]
RIN 1545–BE45
Balanced System for Measuring
Organizational and Employee
Performance Within the Internal
Revenue Service
Internal Revenue Service (IRS),
Treasury.
ACTION: Notice of proposed rulemaking
by cross-reference to temporary
regulations.
AGENCY:
SUMMARY: In the Rules and Regulations
section of this issue of the Federal
Register, the IRS is issuing temporary
regulations designed to modify 26 CFR
part 801, the regulations governing the
IRS Balanced System for Measuring
Organizational and Employee
Performance, to clarify when quantity
measures, which are not tax
enforcement results, may be used in
measuring organizational and employee
performance. The temporary regulations
affect internal operations of the IRS and
the systems it employs to evaluate the
performance of organizations within the
IRS. The text of the temporary
regulations also serves as the text of
these proposed regulations.
E:\FR\FM\17OCP1.SGM
17OCP1
]]>Agencies
[Federal Register Volume 70, Number 199 (Monday, October 17, 2005)]
[Proposed Rules]
[Pages 60251-60256]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-20697]
[[Page 60251]]
=======================================================================
-----------------------------------------------------------------------
SOCIAL SECURITY ADMINISTRATION
20 CFR Parts 404, 408 and 416
RIN 0960-AG09
Representative Payment Policies and Administrative Procedure for
Imposing Penalties for False or Misleading Statements or Withholding of
Information
AGENCY: Social Security Administration (SSA).
ACTION: Proposed rules.
-----------------------------------------------------------------------
SUMMARY: We propose to amend our regulations on representative payment
and on the administrative procedure for imposing penalties for false or
misleading statements or withholding of information to reflect and
implement certain provisions of the Social Security Protection Act of
2004 (SSPA), Public Law 108-203. The SSPA amends representative payment
policies by providing additional safeguards for Social Security,
Special Veterans and Supplemental Security Income beneficiaries served
by representative payees. These changes include additional
disqualifying factors for representative payee applicants, additional
requirements for non-governmental fee-for-service payees, authority to
redirect delivery of benefit payments when a representative payee fails
to provide required accountings, and authority to treat misused
benefits as an overpayment to the representative payee. In addition, we
propose to modify our rules to explain financial requirements for
representative payees, and we also have made minor clarifying plain
language changes.
The SSPA also allows SSA to impose a penalty on any person who
knowingly withholds information that is material for use in determining
any right to or the amount of monthly benefits under titles II or XVI.
The penalty is nonpayment for a specified number of months of benefits
under title II that would otherwise be payable and ineligibility for
the same period of time for cash benefits under title XVI (including
State supplementary payments).
DATES: To consider your comments, we must receive them no later than
December 16, 2005.
ADDRESSES: You may give us your comments by: using our Internet
facility (i.e., Social Security Online) at https://policy.ssa.gov/
pnpublic.nsf/LawsRegs or the Federal eRulemaking Portal at https://
www.regulations.gov; e-mail to regulations@ssa.gov; telefax to (410)
966-2830; or letter to the Commissioner of Social Security, P.O. Box
17703, Baltimore, MD 21235-7703. You may also deliver them to the
Office of Regulations, Social Security Administration, 100 Altmeyer
Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, between 8
a.m. and 4:30 p.m. on regular business days. Comments are posted on our
Internet site, or you may inspect them physically on regular business
days by making arrangements with the contact person shown in this
preamble.
Electronic Version
The electronic file of this document is available on the date of
publication in the Federal Register on the Internet site for the
Government Printing Office, https://www.gpoaccess.gov/fr/. It
is also available on the Internet site for SSA (i.e., Social Security
Online) at https://policy.ssa.gov/pnpublic.nsf/LawsRegs.
FOR FURTHER INFORMATION CONTACT: Regarding this Federal Register
document--Robert Augustine, Social Insurance Specialist, Office of
Regulations, Social Security Administration, 6401 Security Boulevard,
Baltimore, MD 21235-6401, (410) 965-0020 or TTY (410) 966-5609;
regarding eligibility or filing for benefits--our national toll-free
number, 1-800-772-1213 or TTY 1-800-325-0778 or visit our Internet Web
site, Social Security Online, at https://www.socialsecurity.gov.
SUPPLEMENTARY INFORMATION:
Background
Public Law 108-203, the SSPA, enacted March 2, 2004, requires a
number of changes to representative payee policy and procedures. A
representative payee is the person, agency, organization, or
institution selected to receive and manage benefits on behalf of an
incapable beneficiary. This includes a parent who is receiving benefits
on behalf of his or her minor child. The SSPA also changes the rules
for imposing penalties for false or misleading statements or for
withholding information.
Section 102 of the SSPA requires non-governmental fee-for-service
organizational representative payees to be both bonded and licensed,
provided that licensing is available in the State.
Section 103 of the SSPA expands the scope of disqualification to
prohibit an individual from serving as a representative payee if he or
she: (1) Has been convicted of any offense resulting in imprisonment
for more than 1 year, unless the Commissioner of Social Security
determines that an exception to this prohibition is appropriate; or (2)
is fleeing to avoid prosecution, or custody or confinement after
conviction of a crime that is a felony.
Section 104 of the SSPA requires fee-for-service representative
payees to forfeit their fees for any months during which they misuse
all or part of any beneficiary's benefits.
Section 105 of the SSPA makes non-governmental representative
payees liable for any benefits they misuse and requires SSA to treat
such misused benefits as overpayments to the representative payees,
subject to overpayment recovery authorities.
Section 106 of the SSPA authorizes the Commissioner of Social
Security to require a representative payee to receive benefits in
person at a Social Security field office or a United States Government
facility designated by the Social Security Administration if the payee
fails to provide an annual accounting of benefits report or other
requested information.
In addition to the changes required by Public Law 108-203, we
propose to clarify financial requirements for representative payees.
Our current regulations specify that the interest earned on conserved
funds belongs to the beneficiary. However, the regulations do not
specifically address interest earned on current benefits or how current
benefits should be held. We propose to specify that a representative
payee must keep any payments received for the beneficiary separate from
the representative payee's own funds and ensure that the beneficiary's
ownership is shown unless the representative payee is the spouse or
parent of the beneficiary and lives in the same household with the
beneficiary. We also propose to provide for an exception to this
requirement for State or local government agencies when we determine
that their accounting structure sufficiently protects the
beneficiaries' interest in the benefits (i.e., accounting structure
clearly identifies what funds belong to the beneficiary). We further
propose to specify that the payee must treat any interest earned on
current benefits as the beneficiary's own property. In addition, we
propose to clarify that the payee is responsible for making records
available for review if requested by us. These records must be examined
when conducting our site visits.
Section 201(a)(2) of the SSPA amended section 1129A of the Act to
help prevent and respond to fraud and abuse in SSA's programs and
operations. Prior to its amendment by the SSPA, section 1129A allowed
SSA to impose a penalty against any person
[[Page 60252]]
who makes, or causes to be made, a statement or representation of a
material fact that the person knows or should know is false or
misleading or that omits a material fact, or that the person makes with
a knowing disregard for the truth. The statement must have been made
for use in determining eligibility for or the amount of benefits under
titles II or XVI. The penalty is nonpayment for 6, 12 or 24 months of
benefits under title II that would otherwise be payable to the person
and ineligibility for the same period of time for cash benefits under
title XVI (including State supplementary payments made by SSA according
to Sec. 416.2005).
Section 201(a)(2) amended section 1129A to also allow SSA to impose
this penalty against any person who withholds disclosure of information
that is material for use in determining any right to or the amount of
monthly benefits under titles II or XVI if the person knows, or should
know, that the withholding of such disclosure is misleading. Prior to
the enactment of section 201(a)(2), in order for a penalty to be
imposed, the law required an affirmative act on the part of the
individual of making a statement that omitted a material fact.
This new penalty under section 1129A of the Act will be effective
with respect to violations committed after the date on which SSA
implements the centralized computer file described in section 202 of
the SSPA. This centralized computer file will electronically record
information about changes in work status that a disability beneficiary
(or representative) reports to SSA and is expected to be implemented in
February 2006.
Explanation of Proposed Changes on Representative Payment
Because our regulations for representative payment under the title
VIII program cross-reference the appropriate material in our title II
representative payment rules, most of the changes we now propose to our
title II representative payment regulations would also apply to title
VIII. Where only a cross-reference to the title II rules would not be
sufficient, we propose a specific rule for title VIII.
We are proposing the following policy changes to our representative
payment regulations:
1. We propose to amend Sec. Sec. 404.2022 and 416.622 to explain
that a person who is convicted of an offense resulting in imprisonment
for more than 1 year may not serve as a representative payee. These
sections also would explain that we may make an exception to this rule
if the nature of the conviction poses no risk to the beneficiary and
selection of the applicant is in the beneficiary's best interest. In
addition, these sections would explain that a person who is fleeing
prosecution, custody or confinement for a crime, or an attempt to
commit a crime that is a felony may not serve as a representative
payee. If we identify a currently serving payee who is no longer
qualified for this reason, we will allow them 10 days to respond to
notification before making any payee change.
2. We propose to amend Sec. Sec. 404.2035 and 416.635 to explain
that a representative payee must keep any payments received for the
beneficiary separate from the payee's own funds and ensure the
beneficiary's ownership is shown unless the payee is the spouse or
parent of the beneficiary and lives in the same household with the
beneficiary. We also propose to provide for an exception to this
requirement for State or local government agencies that use a different
accounting structure. We would grant such an exception to a State or
local government agency if we determine that its accounting structure
sufficiently protects the beneficiaries' interest in the benefits.
Also, these sections would explain that the payee must treat any
interest earned on current benefits as the beneficiary's own property.
3. We propose to amend Sec. Sec. 404.2035 and 416.635 to require
representative payees to make available to us their records supporting
their written accounting reports. We believe those records are
essential to verify the written reports.
4. We propose to amend existing Sec. Sec. 404.2040a and 416.640a
to require fee-for-service non-governmental community-based nonprofit
organizational representative payees to be both bonded and licensed
(provided that licensing is available in the State). The bond would
have to be of a sufficient amount to repay any funds (current social
security benefits and supplemental security income payments plus any
conserved funds and interest) lost by the beneficiaries in the event of
misuse or theft, and the license would have to be appropriate under the
laws of the State for the type of services the organization provides.
These bonding and licensing requirements would not apply to the title
VIII program. In addition, these sections would explain that a fee-for-
service representative payee must forfeit its fee for the months during
which it misused benefits.
5. We propose to amend Sec. Sec. 404.2041 and 416.641 to explain
that a non-governmental representative payee will be liable for any
benefits it misuses and that SSA will treat the misused benefits as an
overpayment to the representative payee, subject to overpayment
recovery authorities.
6. We propose to amend Sec. Sec. 404.2065 and 416.665 to explain
that we may require a representative payee to receive benefits in
person at a local Social Security field office or a United States
Government facility designated by the Social Security Administration if
the payee fails to provide an annual accounting of benefits or other
requested information. We propose to make a similar amendment to Sec.
408.665, but the benefits would be directed to a United States
Government facility designated by the Social Security Administration.
Explanation of Proposed Changes on Administrative Procedures for
Imposing Administrative Penalties
We propose to amend Sec. Sec. 404.459 and 416.1340 of our
regulations by revising the heading and paragraphs (a) and (e) of each
section to reflect that, as a result of section 201 of the SSPA, an
individual will be subject to the penalty if he or she withholds
information that is material for use in determining any right to or the
amount of monthly benefits under title II or XVI if the person knows,
or should know, that the withholding of the information is misleading.
Clarity of These Regulations
Executive Order 12866, as amended by Executive Order 13258,
requires each agency to write all rules in plain language. In addition
to comments you may have on the substance of these proposed rules, we
also invite your comments on how to make these rules easier to
understand. For example:
Have we organized the material to suit your needs?
Are the requirements in the rules clearly stated?
Do the rules contain technical language or jargon that is
not clear?
Would a different format (grouping and order of sections,
use of headings, paragraphing) make the rules easier to understand?
Would more (but shorter) sections be better?
Could we improve clarity by adding tables, lists, or
diagrams?
What else could we do to make the rules easier to
understand?
Regulatory Procedures
Executive Order 12866
We have consulted with the Office of Management and Budget (OMB)
and determined that these proposed rules
[[Page 60253]]
meet the criteria for a significant regulatory action under Executive
Order 12866, as amended by Executive Order 13258. Thus, the rules have
been reviewed by OMB.
Executive Order 13132 (Federalism) and the Unfunded Mandates Reform Act
of 1995
We have reviewed the proposed rules for compliance with Executive
Order 13132 and the Unfunded Mandates Reform Act of 1995 (UMRA of
1995). We have determined that the proposed rules are not significant
within the meaning of the UMRA of 1995 nor will they have any
substantial direct effects on the States, on the relationship between
the federal government and the States, or on the distribution of power
and responsibilities among the various levels of government within the
meaning of Executive Order 13132.
The provision requiring a State license for certain qualified
organizations seeking compensation for serving as representative payees
affects a very small number of organizational payees and will not
significantly impact the States. First, the total number of
organizations seeking compensation is very small, approximately 800.
There are a significant number of State or local government agencies
within this group which we do not require to be licensed. Only the
small number of remaining organizations (community-based nonprofit
social service organizations) must seek State licensing. Second, such
organizations should already have obtained the necessary license to be
in compliance with State law. Therefore, the very small number of
organizations seeking a State license will not significantly impact the
States.
Regulatory Flexibility Act
We certify that these proposed rules will not have a significant
economic impact on a substantial number of small entities. Therefore, a
regulatory flexibility analysis, as provided for in the Regulatory
Flexibility Act, as amended, is not required.
Paperwork Reduction Act
These proposed rules contain reporting requirements as shown in the
table below. Where the public reporting burden is accounted for in
Information Collection Requests for the various forms that the public
uses to submit the information to SSA, a 1-hour placeholder burden is
being assigned to the specific reporting requirement(s) contained in
these rules; we are seeking clearance of these burdens because they
were not considered during the clearance of the forms.
----------------------------------------------------------------------------------------------------------------
Annual number Frequency of Average burden Estimated
Section of responses response per response annual burden
----------------------------------------------------------------------------------------------------------------
404.2035(d)..................................... 550,000 1 .083 45,650
404.2035(e); 404.2065; 408.665.................. .............. .............. .............. 1
404.2035(f)..................................... 5,500 1 .083 457
416.635(d)...................................... 300,000 1 .083 24,900
416.635(e); 416.665............................. .............. .............. .............. 1
416.635(f)...................................... 3,000 1 .083 250
-----------------
Total....................................... 858,500 .............. .............. 71,257
----------------------------------------------------------------------------------------------------------------
An Information Collection Request has been submitted to OMB. We are
soliciting comments on the burden estimate; the need for the
information; its practical utility; ways to enhance its quality,
utility and clarity; and on ways to minimize the burden on respondents,
including the use of automated collection techniques or other forms of
information technology. Comments should be submitted and/or faxed to
OMB and to the Social Security Administration at the following
addresses/numbers: Office of Management and Budget, Attn: Desk Officer
for SSA, Fax Number: 202-395-6974. Social Security Administration,
Attn: SSA Reports Clearance Officer, Rm: 1338 Annex Building, 6401
Security Boulevard, Baltimore, MD 21235-6401, Fax Number: 410-965-6400.
Comments can be received for up to 60 days after publication of
this notice and will be most useful if received within 30 days of
publication. To receive a copy of the OMB clearance package, you may
call the SSA Reports Clearance Officer on 410-965-0454.
(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social
Security-Disability Insurance; 96.002, Social Security-Retirement
Insurance; 96.004, Social Security-Survivors Insurance; 96.006,
Supplemental Security Income; 96.020, Special Benefits for Certain
World War II Veterans)
List of Subjects
20 CFR Part 404
Administrative practice and procedure, Blind, Disability benefits,
Old-Age, Survivors and Disability Insurance; Reporting and
recordkeeping requirements, Social Security.
20 CFR Part 408
Administrative practice and procedure, Aged; Reporting and
recordkeeping requirements, Social Security; Special Veterans benefits;
Veterans.
20 CFR Part 416
Administrative practice and procedure, Aged, Blind, Disability
benefits, Public assistance programs, Reporting and recordkeeping
requirements, Supplemental security income (SSI).
Dated: October 7, 2005.
Jo Anne B. Barnhart,
Commissioner of Social Security.
For the reasons set out in the preamble, we propose to amend
subparts E and U of part 404, subpart F of part 408, and subparts F and
M of part 416 of Title 20 of the Code of Federal Regulations as
follows:
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE
(1950- )
Subpart E--[Amended]
1. The authority citation for subpart E of part 404 continues to
read as follows:
Authority: Secs. 202, 203, 204(a) and (e), 205(a) and (c),
216(l), 223(e), 224, 225, 702(a)(5), and 1129A of the Social
Security Act (42 U.S.C. 402, 403, 404(a) and (e), 405(a) and (c),
416(l), 423(e), 424a, 425, 902(a)(5), 1320a-8a) and 48 U.S.C. 1801.
2. Amend Sec. 404.459 by revising the heading and paragraphs (a)
and (e) to read as follows:
[[Page 60254]]
Sec. 404.459 Penalty for making false or misleading statements or
withholding information.
(a) When may SSA penalize me? You will be subject to a penalty if:
(1) You make, or cause to be made, a statement or representation of
a material fact, for use in determining any initial or continuing right
to, or the amount of, monthly insurance benefits under title II or
benefits or payments under title XVI, that you know or should know is
false or misleading, or
(2) You make a statement or representation of a material fact for
use as described in paragraph (a)(1) of this section with knowing
disregard for the truth, or
(3) You omit from a statement or representation made for use as
described in paragraph (a)(1) of this section, or otherwise withhold
disclosure (for example, fail to come forward to notify SSA) of a fact
which you know or should know is material to the determination of any
initial or continuing right to, or the amount of, monthly insurance
benefits under title II or benefits or payments under title XVI, if you
know, or should know, that the statement or representation with such
omission is false or misleading or that the withholding of such
disclosure is misleading.
* * * * *
(e) How will SSA make its decision to penalize me? In order to
impose a penalty on you, we must find that you knowingly (knew or
should have known or acted with knowing disregard for the truth) made a
false or misleading statement or omitted or failed to report a material
fact if you knew, or should have known, that the omission or failure to
disclose was misleading. We will base our decision to penalize you on
the evidence and the reasonable inferences that can be drawn from that
evidence, not on speculation or suspicion. Our decision to penalize you
will be documented with the basis and rationale for that decision. In
determining whether you knowingly made a false or misleading statement
or omitted or failed to report a material fact so as to justify
imposition of the penalty, we will consider all evidence in the record,
including any physical, mental, educational, or linguistic limitations
(including any lack of facility with the English language) which you
may have had at the time. In determining whether you acted knowingly,
we will also consider the significance of the false or misleading
statement or omission or failure to disclose in terms of its likely
impact on your benefits.
* * * * *
Subpart U--[Amended]
3. The authority citation for subpart U of part 404 continues to
read as follows:
Authority: Secs. 205(a), (j), and (k), and 702(a)(5) of the
Social Security Act (42 U.S.C. 405(a), (j), and (k), and 902(a)(5)).
4. Amend Sec. 404.2022 by redesignating paragraphs (b), (c) and
(d) as paragraphs (d), (e) and (f) and adding new paragraphs (b) and
(c) to read as follows:
Sec. 404.2022 Who may not serve as a representative payee?
* * * * *
(b) Is fleeing to avoid prosecution, or custody or confinement
after conviction of a crime, or an attempt to commit a crime, that is a
felony under the laws of the place from which he/she flees (or, in
jurisdictions that do not define crimes as felonies, is punishable by
death or imprisonment for a term exceeding one year, regardless of the
actual sentence imposed). If we identify a currently serving payee who
is no longer qualified for this reason, we will allow them 10 days to
respond to notification before making any payee change.
(c) Has been convicted of an offense resulting in imprisonment for
more than 1 year. However, we may make an exception to this
prohibition, if the nature of the conviction is such that selection of
the applicant poses no risk to the beneficiary and the exception is in
the beneficiary's best interest.
* * * * *
5. Revise Sec. 404.2035 to read as follows:
Sec. 404.2035 What are the responsibilities of your representative
payee?
A representative payee has a responsibility to--
(a) Use the benefits received on your behalf only for your use and
benefit in a manner and for the purposes he or she determines, under
the guidelines in this subpart, to be in your best interests.
(b) Keep any benefits received on your behalf separate from his or
her own funds and show your ownership of these benefits unless he or
she is your spouse or natural or adoptive parent or stepparent and
lives in the same household with you or is a State or local government
agency for whom we have granted an exception to this requirement.
(c) Treat any interest earned on the benefits as your property.
(d) Notify us of any event or change in your circumstances that
will affect the amount of benefits you receive, your right to receive
benefits, or how you receive them;
(e) Submit to us, upon our request, a written report accounting for
the benefits received on your behalf, and make all supporting records
available for review if requested by us; and
(f) Notify us of any change in his or her circumstances that would
affect performance of his/her payee responsibilities.
6. Amend Sec. 404.2040a by revising paragraph (a)(2),
redesignating paragraph (g)(6) as (g)(7), and adding a new paragraph
(g)(6) to read as follows:
Sec. 404.2040a Compensation for qualified organizations serving as
representative payees.
* * * * *
(a) * * *
(2) Any community-based nonprofit social service organization
founded for religious, charitable or social welfare purposes, which is
tax exempt under section 501(c) of the Internal Revenue Code and which
is bonded/insured to cover misuse and embezzlement by officers and
employees and which is licensed in each State in which it serves as
representative payee (if licensing is available in the State). The
minimum amount of bonding or insurance coverage must equal the average
monthly amount of social security payments received by the organization
plus the amount of the beneficiaries' conserved funds (i.e.,
beneficiaries' saved social security benefits) plus interest on hand.
For example, an organization that has conserved funds of $5,000 and
receives an average of $12,000 a month in social security payments must
be bonded/insured for a minimum of $17,000. The license must be
appropriate under the laws of the State for the type of services the
organization provides. An example of an appropriately licensed
organization is a community mental health center holding a State
license to provide community mental health services.
* * * * *
(g) * * *
(6) Fees for services may not be taken from beneficiary benefits
for the months for which the Commissioner or a court of competent
jurisdiction determines that the representative payee misused benefits.
Any fees collected for such months will be treated as a part of the
beneficiary's misused benefits.
* * * * *
7. Amend Sec. 404.2041 by adding a new paragraph (f) to read as
follows:
[[Page 60255]]
Sec. 404.2041 Who is liable if your representative payee misuses your
benefits?
* * * * *
(f) Any amounts that the representative payee misuses and does not
refund will be treated as an overpayment to that representative payee.
See subpart F of part 404.
8. Amend Sec. 404.2065 by revising the introductory text to read
as follows:
Sec. 404.2065 How does your representative payee account for the use
of benefits?
Your representative payee must account for the use of your
benefits. We require written reports from your representative payee at
least once a year (except for certain State institutions that
participate in a separate onsite review program). We may verify how
your representative payee used your benefits. Your representative payee
should keep records of how benefits were used in order to make
accounting reports and must make those records available upon our
request. If your representative payee fails to provide an annual
accounting of benefits or other required reports, we may require your
payee to receive your benefits in person at the local Social Security
field office or a United States Government facility designated by the
Social Security Administration serving the area in which you reside.
The decision to have your representative payee receive your benefits in
person may be based on a variety of reasons. Some of these reasons may
include the payee's history of past performance or SSA's past
difficulty in contacting the payee. We may ask your representative
payee to give us the following information:
* * * * *
PART 408--SPECIAL BENEFITS FOR CERTAIN WORLD WAR II VETERANS (SVB)
Subpart F--[Amended]
9. The authority citation for subpart F of part 408 continues to
read as follows:
Authority: Secs. 702(a)(5), 807, and 810 of the Social Security
Act (42 U.S.C. 902(a)(5), 1007, and 1010).
10. Revise Sec. 408.665 to read as follows:
Sec. 408.665 How does your representative payee account for the use
of your SVB benefits?
Your representative payee must account for the use of your
benefits. We require written reports from your representative payee at
least once a year. We may verify how your representative payee used
your benefits. Your representative payee should keep records of how
benefits were used in order to provide accounting reports and must make
those records available upon our request. If your representative payee
fails to provide an annual accounting of benefits or other required
report, we may require your payee to appear in person at a United
States Government facility designated by the Social Security
Administration serving the area in which you reside. The decision to
have your representative payee receive your benefits in person may be
based on a variety of reasons. Some of these reasons may include the
payee's history of past performance or SSA's past difficulty in
contacting the payee. We may ask your representative payee to give us
the following information:
(a) Where you lived during the accounting period;
(b) Who made the decisions on how your benefits were spent or
saved;
(c) How your benefit payments were used; and
(d) How much of your benefit payments were saved and how the
savings were invested.
PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND AND
DISABLED
Subpart F--[Amended]
11. The authority citation for subpart F continues to read as
follows:
Authority: Secs. 702(a)(5), 1631(a)(2) and (d)(1) of the Social
Security Act (42 U.S.C. 902(a)(5) and 1383(a)(2) and (d)(1)).
12. Amend Sec. 416.622 by redesignating paragraphs (b), (c) and
(d) as paragraphs (d), (e) and (f) and adding new paragraphs (b) and
(c) to read as follows:
Sec. 416.622 Who may not serve as a representative payee?
* * * * *
(b) Is fleeing to avoid prosecution, or custody or confinement
after conviction of a crime, or an attempt to commit a crime, that is a
felony under the laws of the place from which he/she flees (or in
jurisdictions that do not define crimes as felonies, is punishable by
death or imprisonment for a term exceeding one year, regardless of the
actual sentence imposed). If we identify a currently serving payee who
is no longer qualified for this reason, we will allow them 10 days to
respond to notification before making any payee change.
(c) Has been convicted of an offense resulting in imprisonment for
more than 1 year. However, we may make an exception to this
prohibition, if the nature of the conviction is such that selection of
the applicant poses no risk to the beneficiary and the exception is in
the beneficiary's best interest.
* * * * *
13. Revise Sec. 416.635 to read as follows:
Sec. 416.635 What are the responsibilities of your representative
payee?
A representative payee has a responsibility to--
(a) Use the benefits received on your behalf only for your use and
benefit in a manner and for the purposes he or she determines under the
guidelines in this subpart, to be in your best interests.
(b) Keep any benefits received on your behalf separate from his or
her own funds and show your ownership of these benefits unless he or
she is your spouse or natural or adoptive parent or stepparent and
lives in the same household with you or is a State or local government
agency for whom we have granted an exception to this requirement.
(c) Treat any interest earned on the benefits as your property.
(d) Notify us of any event or change in your circumstances that
will affect the amount of benefits you receive, your right to receive
benefits, or how you receive them;
(e) Submit to us, upon our request, a written report accounting for
the benefits received on your behalf, and make all supporting records
available for review if requested by us; and
(f) Notify us of any change in his or her circumstances that would
affect performance of his/her payee responsibilities.
(g) If you are under age 18 (including cases in which your low
birth weight is a contributing factor material to our determination
that you are disabled), ensure that you are receiving treatment to the
extent considered medically necessary and available for the condition
that was the basis for providing benefits (see Sec. 416.994a(i)).
14. Amend Sec. 416.640a by revising paragraph (a)(2),
redesignating paragraph (g)(6) as (g)(7), and adding a new paragraph
(g)(6) to read as follows:
Sec. 416.640a Compensation for qualified organizations serving as
representative payees.
* * * * *
(a) * * *
(2) Any community-based nonprofit social service organization
founded for religious, charitable or social welfare purposes, which is
tax exempt under section 501(c) of the Internal Revenue Code and which
is bonded/insured to cover misuse and embezzlement by officers and
employees and licensed in each State in which it serves as
[[Page 60256]]
representative payee (if licensing is available in the State). The
minimum amount of bonding or insurance coverage must equal the average
monthly amount of supplemental security income payments received by the
organization plus the amount of the beneficiaries' conserved funds
(i.e., beneficiaries' saved supplemental security income payments) plus
interest on hand. For example, an organization that has conserved funds
of $5,000 and receives an average of $12,000 a month in supplemental
security income payments must be bonded/insured for a minimum of
$17,000. The license must be appropriate under the laws of the State
for the type of services the organization provides. An example of an
appropriately licensed organization is a community mental health center
holding a State license to provide community mental health services.
* * * * *
(g) * * *
(6) Fees for services may not be taken from beneficiary benefits
for the months for which the Commissioner or a court of competent
jurisdiction determines that the representative payee misused benefits.
Any fees collected for such months will be treated as a part of the
beneficiary's misused benefits.
* * * * *
15. Amend Sec. 416.641 by adding a new paragraph (f) to read as
follows:
Sec. 416.641 Who is liable if your representative payee misuses your
benefits?
* * * * *
(f) Any amounts that the representative payee misuses and does not
refund will be treated as an overpayment to that representative payee.
See subpart E of part 416.
16. Amend Sec. 416.665 by revising the introductory text to read
as follows:
Sec. 416.665 How does your representative payee account for the use
of benefits?
Your representative payee must account for the use of your
benefits. We require written reports from your representative payee at
least once a year (except for certain State institutions that
participate in a separate onsite review program). We may verify how
your representative payee used your benefits. Your representative payee
should keep records of how benefits were used in order to make
accounting reports and must make those records available upon our
request. If your representative payee fails to provide an annual
accounting of benefits or other required reports, we may require your
payee to receive your benefits in person at the local Social Security
field office or a United States Government facility designated by the
Social Security Administration serving the area in which you reside.
The decision to have your representative payee receive your benefits in
person may be based on a variety of reasons. Some of these reasons may
include the payee's history of past performance or SSA's past
difficulty in contacting the payee. We may ask your representative
payee to give us the following information:
* * * * *
Subpart M--[Amended]
17. The authority citation for subpart M of part 416 continues to
read as follows:
Authority: Secs. 702(a)(5), 1129A, 1611-1614, 1619, and 1631 of
the Social Security Act (42 U.S.C. 902(a)(5), 1320a-8a, 1382-1382c,
1382h, and 1383).
18. Amend Sec. 416.1340 by revising the heading and paragraphs (a)
and (e) to read as follows:
Sec. 416.1340 Penalty for making false or misleading statements or
withholding information.
(a) When may SSA penalize me? You will be subject to a penalty if:
(1) You make, or cause to be made, a statement or representation of
a material fact, for use in determining any initial or continuing right
to, or the amount of, monthly insurance benefits under title II or
benefits or payments under title XVI, that you know or should know is
false or misleading, or
(2) You make a statement or representation of a material fact for
use as described in paragraph (a)(1) of this section with knowing
disregard for the truth, or
(3) You omit from a statement or representation made for use as
described in paragraph (a)(1) of this section, or otherwise withhold
disclosure (for example, fail to come forward to notify SSA) of, a fact
which you know or should know is material to the determination of any
initial or continuing right to, or the amount of, monthly insurance
benefits under title II or benefits or payments under title XVI, if you
know, or should know, that the statement or representation with such
omission is false or misleading or that the withholding of such
disclosure is misleading.
* * * * *
(e) How will SSA make its decision to penalize me? In order to
impose a penalty on you, we must find that you knowingly (knew or
should have known or acted with knowing disregard for the truth) made a
false or misleading statement or omitted or failed to report a material
fact if you knew, or should have known, that the omission or failure to
disclose was misleading. We will base our decision to penalize you on
the evidence and the reasonable inferences that can be drawn from that
evidence, not on speculation or suspicion. Our decision to penalize you
will be documented with the basis and rationale for that decision. In
determining whether you knowingly made a false or misleading statement
or omitted or failure to report a material fact so as to justify
imposition of the penalty, we will consider all evidence in the record,
including any physical, mental, educational, or linguistic limitations
(including any lack of facility with the English language) which you
may have had at the time. In determining whether you acted knowingly,
we will also consider the significance of the false or misleading
statement or omission or failure to disclose in terms of its likely
impact on your benefits.
* * * * *
[FR Doc. 05-20697 Filed 10-14-05; 8:45 am]
BILLING CODE 4191-02-P
