ATTACHMENT VIII MINOR AND NECESSARY CHANGES IN THE GAO REPORTS Letter report on reductions in erroneous Social Security payments and in administrative burdens when benefits are determined on a retrospective monthly basis, HRD-78-114, May 26, 1978 Letter report on potential savings to the Social Security system if benefits were calculated to the nearest penny, HRD-78-160, September 8, 1978 COGNIZANT LEGISLATIVE COMMITTEES Senate Committee on Finance House Committee on Ways and Means STATEMENT OF THE RECOMMENDATION GAO recommended in its May 1978 report that the Social Security Act be amended to change the basis for determining Supplemental Security Income eligibility and benefit payment amounts from a quarterly accounting period to a retrospective monthly accounting period, with a 1-month lag. GAO recommended in its September 1978 report that Congress amend the Social Security Act to require calculation of Social Security Retirement and Survivors Insurance Benefits to the nearest penny. Both reports include suggested legislative language. DISCUSSION OF THE PROBLEM Accounting method for Social Security benefit payments The original Supplemental Security Income legislation generally requires Social Security to determine Supplemental Security Income eligibility and benefit payment amounts on installments. to minimize changes in the monthly benefit payments caused by income variations. This requirement has resulted in substantial overpayments to Supplemental Security Income recipients. Social Security's Office of Quality Assurance estimated that at least $39 million of overpayments occurred because of the present accounting method. Method of calculating Social Presently the Social Security Act requires that benefit payments be rounded up to the next highest dime. GAO computed a potential savings of $386 million to the Social Security Retirement and Survivors Insurance program for the period 1980 through 1986, if benefits were calculated to the nearest penny. A savings, although somewhat smaller, would also be achieved for the Disability Insurance program. LEGISLATIVE INITIATIVES/POLITICAL SENSITIVITIES Section 232 of the Social Security Welfare Reform Amendments of 1979, introduced in both the House and Senate as H. R. 4321 and S. 1290, respectively, amends the currently used prospective quarterly accounting method in favor of a retrospective monthly accounting period. Although this method of accounting would be an im provement over that currently used, GAO believes that computing payments. benefits on this basis alone would not fully reduce erroneous However, by allowing a 1-month lag between the month used for eligibility determinations and benefit calculations and the month payments are made to recipients, reductions in erroneous payments and in Social Security administrative burden should be realized. The 1-month lag is intended to provide Social Security with sufficient time to -process an initial eligibility determination or reported benefit status change, -notify recipients of their right to an evidentiary hearing, and calculate a benefit payment amount before any erroneous payments are disbursed. ATTACHMENT IX CONSOLIDATION AND RATIONALIZATION IS NEEDED GAO REPORT "Federal Domestic Food Assistance Programs-A Time For COGNIZANT LEGISLATIVE COMMITTEES Senate Committee on Agriculture, Nutrition, and Forestry House Committee on Agriculture House Committee on Education and Labor STATEMENT OF THE RECOMMENDATION GAO recommended that the Congress: -On the basis of a proposal involving consistent income and asset program standards, which GAO recommended be developed by the executive branch, adopt a uniform definition of the term "needy" and establish consistent criteria for determining who is eligible for Federal food assistance programs; these criteria should include income and asset eligibility requirements as well as allowable exclusions and deductions from countable income and assets. In addition, consistent administrative procedures among the programs regarding accounting periods for measuring income and veri fication requirements for such eligibility factors as income and assets should be provided. ---Approve an explicit national policy on the appropriate levels of food assistance to be provided to needy Americans by the Federal Government. -Consolidate major Federal food assistance programs in the school lunch, school breakfast, and/or child --Authorize the Secretary of Agriculture to implement individualized food stamp allotments nationwide if demonstration projects, which GAO recommended be undertaken by the Department of Agriculture, show the administrative feasibility of such allotments. --On the basis of the results of a feasibility study, which GAO recommended be carried out by the executive branch, eliminate the receipt of duplicative benefits, particularly between the food stamp and school lunch programs, by allowing consideration of benefits received from one Federal food assistance program when determining eligibility and benefit levels for other Federal food assistance programs. |