PASS Program:

SSA Work Incentive for Disabled Beneficiaries Poorly Managed

HEHS-96-51: Published: Feb 28, 1996. Publicly Released: Feb 28, 1996.

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Pursuant to a legislative requirement, GAO reviewed the Social Security Administration's (SSA) Plan for Achieving Self-Support (PASS) Program, focusing on: (1) SSA management of the program and its impact on employment of the disabled; and (2) the program's vulnerability to abuse.

GAO found that: (1) SSA has poorly implemented and managed the PASS program and has not given its field office staff adequate program guidance, support, or training; (2) the diversity of individual plans' goals and expenditures reflects the diversity of the disability population; (3) the PASS program has grown over the past 5 years as program awareness has increased, and further growth is predicted because millions of Supplemental Security Income (SSI) and Disability Insurance (DI) beneficiaries are eligible; (4) about 40 percent of PASS program participants, who are mainly DI beneficiaries, would not be eligible for SSI benefits if some of their income was not excluded under PASS; (5) the impact of the PASS program cannot be accurately determined because SSA does not have basic data on program participation and has not defined clear program goals; (6) former PASS participants are more likely than other SSI beneficiaries to have earnings that reduce their SSI benefits, but few have left the SSI and DI rolls; (7) PASS participation increases SSI benefit outlays by about $30 million annually; (8) the PASS program is vulnerable to abuse because internal controls are weak, guidelines are vague, applications are not uniform, there is no limit on individuals' participation, compliance monitoring is infrequent and nonstandardized, and few penalties exist for willful noncompliance; and (9) SSA has not addressed the potential financial conflicts of interest caused by professional PASS preparers.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Congress has taken no action on this matter and, as a result, SSA intends no further action. In the first 2 years after the report was issued, SSA's budget submissions to OMB proposed to Congress that DI beneficiaries not participate in the PASS program. However, this provision was not in either budget request provided to the Administration by OMB. Because of this, SSA has not put this provision in subsequent budget submissions to OMB.

    Matter: Congress may wish to consider whether individuals otherwise financially ineligible for SSI because their DI benefits or other income exceed the eligibility threshold should continue to gain eligibility for SSI through the PASS program.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: SSA has initiated action to obtain data on PASS management and employment impact. SSA's Quality Assurance group began a longitudinal study in March of this year to evaluate the PASS program to determine whether changes to the program are needed. This study will take several years and SSA believes it will not have sufficient data to evaluate the program until the year 2001. When SSA has collected enough data to evaluate the program, it will decide at that time whether it needs to continue collecting data in the future.

    Recommendation: The Commissioner of Social Security should, after seeking legislation if necessary, gather additional management data on PASS program participation and impact, and use these data to evaluate the impact of PASS program participation on employment.

    Agency Affected: Social Security Administration

  2. Status: Closed - Implemented

    Comments: Changes to SSA's operating procedures, the revised PASS application, and the PASS specialist positions, contributed to satisfying this recommendation.

    Recommendation: The Commissioner of Social Security should, after seeking legislation if necessary, improve support to field staff, including enhancing their ability to evaluate the feasibility of proposed work goals, and requiring PASS to incorporate additional data relevant to determining their feasibility, including the applicant's disability, previous work experience, if any, and education.

    Agency Affected: Social Security Administration

  3. Status: Closed - Implemented

    Comments: SSA has revised and standardized its PASS application form to capture much of the information needed for SSA to make an informed decision on whether or not to approve a PASS and provided a checklist for staff reviewing PASS applications to help ensure that all issues have been addressed. In addition, SSA has trained PASS specialists in each region who review and approval of PASS applications. These staff have primary responsibility and final approval of PASS plans. SSA has also provided guidance, through its Program Operating Manual, for monitoring beneficiary progress and expenses used for achieving the PASS work goal. In January 1977, SSA issued public information materials discussing the purpose and requirements of the PASS provision.

    Recommendation: The Commissioner of Social Security should, after seeking legislation if necessary, standardize the PASS program, including the application, reporting guidelines on expenditures for compliance reviews, and informational and educational materials for PASS preparers.

    Agency Affected: Social Security Administration

  4. Status: Closed - Implemented

    Comments: Rather than cap fees charged by third parties, SSA has revised its program operating procedures to address third-party preparers' fees, emphasizing that the fee must be based on actual time spent on the individual's case, must be reasonable, and must be directly related to services necessary for attaining a work goal. The procedures were also changed to no longer allow fees for third-party monitoring of beneficiary progress toward the work goal. According to an SSA official, some preparers who were charging excessive fees have stopped preparing PASS plans and, third-party fees have decreased overall. For example, fees for preparing a PASS plan are running between $250 and $350. During GAO's review, GAO found fees as high as $832.

    Recommendation: The Commissioner of Social Security should, after seeking legislation if necessary, decide whether: (1) fees paid to third parties should continue to be disregarded when calculating benefit payment amounts; and (2) the amount of disregarded fees should be capped.

    Agency Affected: Social Security Administration

  5. Status: Closed - Implemented

    Comments: SSA's Program Operating Manual was revised to require that, at a minimum, a PASS must specify a feasible occupational objective and be expected to increase an individual's prospect for self-support. According to SSA's policy, an increase in self-support is measured in terms of higher earnings potential. For example, upon the beneficiary's completion of the PASS, the beneficiary would earn additional income that would either eliminate, or at least significantly reduce, Supplemental Security Income (SSI) payments within a reasonable time of achieving the work goal.

    Recommendation: The Commissioner of Social Security should, after seeking legislation if necessary, clarify the goals of the PASS program.

    Agency Affected: Social Security Administration

  6. Status: Closed - Implemented

    Comments: SSA's revised operating procedures address the concerns that resulted in this recommendation.

    Recommendation: The Commissioner of Social Security should, after seeking legislation if necessary, strengthen internal controls by establishing more specific guidelines on acceptable PASS expenditures, developing penalties for willful noncompliance with the PASS program, including a determination of whether subsequent plans are permissible, examining the role of third-party preparers, including their potential financial conflicts of interest, and considering the strength of existing safeguards against abuse when determining the appropriate limits on the length and number of PASS individual participants may have.

    Agency Affected: Social Security Administration

 

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