"The abuses are unconscionable," Grassley said. "The victims here have fixed incomes. They rely on a monthly benefit check to buy their groceries and pay their rent. If their money disappears, they suffer. They may end up hungry and homeless. What's more, this is taxpayer money. Working Americans pay into Social Security. Their money is intended to serve them when they can't work any more. Stealing Social Security benefits is stealing from the taxpayers."
Grassley's comments came in conjunction with a hearing, "Inviting Fraud: Has the Social Security Administration Allowed Some Payees to Deceive the Elderly and Disabled?". The Committee heard about the hundreds of elderly and disabled individuals who have lost their benefits to bad actors.
Grassley explained that 6.5 million Americans receive Social Security or Supplemental Security Income and need help managing their money. When they have no friends or family to help, the government appoints an organization to handle their benefit checks. More than 750,570 beneficiaries have an organization serving them in this capacity.
Grassley said the majority of these organizations appear to provide much-needed help to beneficiaries without abusing their responsibility. However, the Social Security Administration's Office of the Inspector General recently investigated several instances of misuse:
A payee in West Virginia pleaded guilty just a few weeks ago to using his clients' benefits for his own purposes. This man, Greg Gamble, agreed to pay back $303,314. One of his victims, Betty Byrd of Martinsburg, W.Va., testified about the hardship she endured at his hands.
A former payee testified about how she embezzled money from her disabled clients in Washington state. She agreed to pay back $31,757. A convicted criminal, she came from prison to testify.
A payee serving 320 beneficiaries in Phoenix and Denver agreed to pay back $274,000. She used that money for a car down payment, home furnishings, and art work.
Grassley said there may be more horror stories to come. The Inspector General expects the number of abuse cases to increase as the Social Security Administration increases its review of payee records.
Last Thursday, Grassley and Sen. John Breaux, ranking Democrat on the Committee, introduced a bill to stop the abuse. The Social Security Beneficiaries Protection Act (S. 2477) would require greater accountability from organizations that handle Social Security benefits. It also would restore benefits to wronged beneficiaries more quickly.
Specifically, the bill would:
Give the Social Security Administration the authority to re-issue benefits on its own determination after misuse by organizations. Under current law, the agency can re-issue benefits only when a court finds that the agency negligently failed to monitor the payee. This leads to a delay in restored benefits for the wronged beneficiaries.
Require both bonding and licensing for organizations that handle these benefits. Currently, either bonding or licensing is required.
Require fee forfeiture by abusive organizations. Now, qualified organizations can charge beneficiaries up to $28 a month for their services. There is no fee forfeiture requirement when abuse occurs.
Give the agency the authority to recover benefit overpayments to abusive organizations.
Extend civil monetary penalty authority to the agency of up to $5,000 for each violation.
Grassley encouraged his Senate colleagues to sign on to the bill.
"Financial abuse should never occur on the government's watch," Grassley said. "This bill demands more accountability from those who do business with the taxpayers. If you handle tax dollars, expect to answer for it. That's our message today."