THE 1976 BENEFIT PAYMENTS

Mr. CONTE. Why is there such a significant decrease in benefit payments from the original 1976 estimate to the revised fiscal year 1976 budget estimate?

Mr. CARDWELL. We revised the 1976 estimate of Federal benefit payments to reflect our most recent program experience. This experience shows that new recipients are not coming into the SSI program in the numbers we expected. This is particularly true of aged recipients.

The original estimate for fiscal year 1976 was based on projections that recipients of Federal benefits would increase from a little more than 4 million on the rolls at the end of 1975 to 4.5 million at the end of 1976. Despite outreach efforts, there were only 3.7 million Federal recipients at the end of fiscal year 1975. The revised fiscal year 1976 budget estimate reflects adjustments based on the actual number of recipients at the end of 1975 as well as data available from early 1976. These current projections now predict that there will be a population of 4.2 million Federal recipients by the end of 1976. This decrease of 300,000 in the estimate of recipients results in a corresponding $215 million decrease in estimated Federal benefit payments.

Again based on program experience, average monthly payments are generally higher than budgeted mainly because the proportion of disabled people participating in the program is higher than we originally estimated. The disabled generally have less other income than do the aged and are therefore entitled to receive higher payments. Also among aged recipients, there are proportionately more converted recipients compared to newly eligible aged recipients than we expected by this time. Converted recipients generally receive higher benefits than do the newly eligible. Prior to conversion to the SSI program, the former adult assistance programs generally had reached the neediest of the eligible adult population.

OVERPAYMENTS

Mr. CONTE. Between August and October of 1975, the Washington Star ran a series of articles on the SSI program. Among other things, it alleged that over $403 million was overpaid in the first 18 months of operation. Would you comment on this situation and any corrective action you have taken?

Mr. CARDWELL. The reported $403 million overpayment figure was accurate. However, since that time we have undertaken several important steps to decrease the incidence of overpayments. During this period a high incidence of error could be traced to the conversion process. Virtually all cases transferred from the States have now been reevaluated for eligibility and payment amount.

At the same time we have been continuing to refine our computer processes to achieve a higher degree of payment accuracy. For example, we now have a better automated system for cross-checking amounts of social security benefits being paid to SSI recipients who are eligible for both programs. This improvement is greatly reducing the number of errors resulting from incorrect social security benefits being used in the SSI benefit computation. We are now able to validate our computational processes each month before payment amounts are computed. Additional controls and edits have been es

tablished whereby the computer will no longer accept at face value certain input that previous experience has shown is error prone without additional confirmation that the data is correct.

Despite substantial improvement in refining the computer processes and correcting erroneous information from which eligibility and payment amounts were determined, major problems still exist. For example, due process requirements and late reporting by recipients of events which effect payment and eligibility continue to be a significant cause of payment error.

Mr. FLOOD. Gentlemen, that is all for now.

JUSTIFICATION OF THE BUDGET ESTIMATES

Appropriation Estimate

Supplemental Security Income Program

For carrying out the Supplemental Security Income program under title XVI of the Social Security Act, section 401 of Public Law 92-603, and section 212 of Public Law 93-66, including payment to the social security trust funds for administrative expenses incurred pursuant to section 201 (g)(1) of the Social Security Act, [$5,518,523,000] $5,910,122,000: Provided, That for carrying out these activities [for the last two months of the current fiscal year] after July 31, such sums as may be necessary shall be

available, the obligations and expenditures therefor to be charged to the

appropriation for the succeeding fiscal [period or fiscal year 1977] year.

Explanation of Language Changes

1/ This is a technical change made which shortens the appropriation language and relates to the new fiscal year which begins October 1 and ends September 30. The purpose of the language, now as before, is to provide that costs of the supplemental security income program for the last two months of a fiscal year can, if necessary, be financed from funds of the next fiscal year. This language is a safeguard for the aged, blind and disabled recipients under the SSI program. In the event that the appropriation estimates prove to be too low, the language permits payment of SSI benefits, "hold harmless" contributions, and other costs related to the program without interruption out of the subsequent year's appropriation.

2/

One time transition quarter language was required last year. It can now be deleted.

Estimate

1/ Excludes the following amounts for reimbursable activities: 1976 $1,195,000,000, 1976 Estimated obligations $1,275,000,000, and 1977 Estimate $1,240,000,000. These reimbursable obligations are for State-financed State supplementation payments administered by SSA on behalf of States who have chosen to have the Federal government administer their supplementation benefits.

2/ The fiscal year 1976 President's budget as acted upon by the House and Senate included funds in the SSI appropriation to reimburse the trust funds for the actual cost of SSI program space and funds in the Payments to Trust and Other Funds account to pay GSA the amounts charged in excess of actual costs for space and services used in the administration

of the SSI program. In the fiscal year 1977 budget request SSA proposes

to budget for the SSI total standard level user charge in the Salaries and Expenses account and to budget for full reimbursement to the trust funds from this SSI appropriation (in the "administration" activity).