Use of Electronic Payroll Data To Improve Program Administration

<RULE> SOCIAL SECURITY ADMINISTRATION <CFR>20 CFR Parts 404, 416, and 422</CFR> <DEPDOC>[Docket No. SSA-2016-0039]</DEPDOC> <RIN>RIN 0960-AH88</RIN> <SUBJECT>Use of Electronic Payroll Data To Improve Program Administration</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Social Security Administration. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> Section 824 of the Bipartisan Budget Act of 2015 (BBA) authorizes the Commissioner of Social Security to enter into information exchanges with payroll data providers to obtain wage and employment information. We use wage and employment information to administer the Old-Age, Survivors, and Disability Insurance (OASDI) disability and Supplemental Security Income (SSI) programs under titles II and XVI of the Social Security Act (Act). We are updating our rules pursuant to the BBA, which requires us to prescribe, by regulation, procedures for implementing the access to and use of the information held by payroll data providers. We expect this final rule will support proper use of information exchanges with payroll data providers that will help us administer our programs more efficiently, improve our customers' experience, and prevent improper payments under titles II and XVI of the Act, which can otherwise occur when we do not receive timely and accurate wage and employment information. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This final rule is effective March 3, 2025. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Nicole Dunham, Policy Analyst, Office of Supplemental Security Income and Program Integrity Policy, Social Security Administration, 6401 Security Boulevard, Baltimore, Maryland 21235-6401, (410) 966-9078. For information on eligibility or filing for benefits, call our national toll-free number, 1-800-772-1213, or TTY 1-800-325-0778, or visit our internet site, Social Security Online, at <E T="03">https://www.socialsecurity.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> On February 15, 2024, we published a Notice of Proposed Rulemaking (NPRM), <E T="03">Use of Electronic Payroll Data To Improve Program Administration.</E> <SU>1</SU> <FTREF/> In the NPRM, we explained that we expect that receiving monthly wage and employment information automatically through an information exchange with a participating payroll data provider  <SU>2</SU> <FTREF/> will improve payment accuracy, reduce improper payments, and reduce reporting burdens on participating individuals when we receive their wage and employment information through the exchange. We also explained that the implementation of an information exchange is expected to result in more efficient use of our limited administrative resources because our technicians would reduce the amount of time they spend— <FTNT> <SU>1</SU>  89 FR 11773. </FTNT> <FTNT> <SU>2</SU>  We define a participating payroll data provider as a payroll data provider that has an information exchange arrangement with us to provide wage and employment information. </FTNT> • Manually requesting this information from payroll data providers and employers; • Manually entering data into our systems from an individual's pay records; • Contacting individuals; and • Assisting individuals with the results of incomplete or untimely reporting. Additionally, we will not subject individuals who provide authorization to certain penalties under section 1129A of the Social Security Act  <SU>3</SU> <FTREF/> for any omission or error with respect to wages reported by a participating payroll data provider. <SU>4</SU> <FTREF/> When we learn of an inaccurate report causing an underpayment, we will follow our usual procedures for remitting an underpayment. <FTNT> <SU>3</SU>  42 U.S.C. 1320a-8a. <E T="03">See also</E> 20 CFR 404.459 and 416.1340. </FTNT> <FTNT> <SU>4</SU>  Under section 1129A of the Act, individuals are subject to certain penalties for making false or misleading statements: the penalty is nonpayment of benefits under Title II and ineligibility for payments under Title XVI. When an individual's wages are reported by a payroll data provider through the exchange and there is an error or omission in the wage report, the individual has (presumedly) not made a false or misleading statement and is expressly not subject to such penalties. </FTNT> <HD SOURCE="HD1">Background</HD> We administer the OASDI disability and SSI programs under titles II and XVI of the Act, respectively. The OASDI program pays benefits to individuals who meet certain requirements, such as those who are disabled and insured for disability benefits. <SU>5</SU> <FTREF/> OASDI also pays benefits to certain members of disabled individuals' families. <SU>6</SU> <FTREF/> The SSI program provides financial support to: (1) adults and children with a disability or blindness; and (2) adults aged 65 and older. These individuals must meet all program eligibility requirements, including having resources and income below specified amounts. <SU>7</SU> <FTREF/> <FTNT> <SU>5</SU>   <E T="03">See</E> 20 CFR 404.315 for a full list of the OASDI disability eligibility requirements. </FTNT> <FTNT> <SU>6</SU>  This can include, for example, a child of the disabled individual, a child of the disabled individual entitled to an adult child disability benefit, a spouse caring for a minor or disabled child of the disabled individual, or retirement benefits for a spouse age 62 or older of the disabled individual. <E T="03">See</E> 20 CFR 404.330, 404.350, 404.351. </FTNT> <FTNT> <SU>7</SU>   <E T="03">See</E> 20 CFR 416.202 for a full list of the SSI eligibility requirements. </FTNT> We take seriously our responsibilities to ensure eligible individuals receive the benefits to which they are entitled and to safeguard the integrity of benefit programs to better serve our customers. We use wage and employment information to help decide who can receive OASDI disability benefits and SSI payments, and to determine SSI payment amounts. Receiving complete, accurate, and timely wage and employment information allows us to administer our programs efficiently and to avoid improper payments that can occur when we do not have such information. <SU>8</SU> <FTREF/> Therefore, we seek to have accurate wage and employment information as quickly as feasible to make correct payments, and thereby avoid overpayments before they occur, or to correct them as soon as possible after they occur. <FTNT> <SU>8</SU>  Individuals who are entitled to OASDI disability must report to us when their condition improves, when they return to work, when they increase the amount they work, and when their earnings increase. <E T="03">See</E> 20 CFR 404.1588(a). Individuals who are eligible for SSI based on disability or blindness must make similar reports. <E T="03">See</E> 20 CFR 416.988. All SSI recipients and deemors must also report to us any change in income as soon as a reportable event happens. (A deemor is any person whose income or resources are material to determining the eligibility of someone filing for or receiving SSI, such as a parent or spouse. 20 CFR 416.1160; SI 01310.127.) <E T="03">See</E> 20 CFR 416.708(c). </FTNT> To obtain this necessary wage and employment information, we largely depend on individuals to report it directly to us. Though we strive to make reporting as easy as possible, it can be burdensome for some individuals to track their wage and employment information and report it to us accurately and timely. <SU>9</SU> <FTREF/> In addition, we do not always receive complete or timely reports, and even when we do, we may still need to verify the reports with independent or collateral sources when we do not have proper wage evidence. <FTNT> <SU>9</SU>  To be considered in time to process a particular month's payment, SSI recipients or their representative payees must report income changes within the first ten days of the month following the month of change (20 CFR 416.714). Receiving this information earlier in the month allows us more time to calculate the correct payment, send a Notice of Planned Action (NOPA) when an adverse action applies, and adjust benefits for the following month. If a change is reported after the first ten days of the month and the change results in a different payment amount, then it is likely that we will not be able to adjust the next payment in time, resulting in an overpayment or underpayment. </FTNT> Section 824 of the BBA  <SU>10</SU> <FTREF/> authorizes the Commissioner of Social Security to enter into information exchanges with payroll data providers  <SU>11</SU> <FTREF/> to obtain wage and employment information. It authorizes these information exchanges  <SU>12</SU> <FTREF/> for the purposes of efficient program administration and to prevent improper OASDI disability and SSI payments without the need for verification by independent or collateral sources. Further, the BBA requires us to prescribe procedures for implementing the access and use of the information held by payroll data providers. We refer to an exchange as the Payroll Information Exchange (PIE). <FTNT> <SU>10</SU>  Public Law 114-74, 129 Stat. 584, 607. </FTNT> <FTNT> <SU>11</SU>  “Payroll data providers” include payroll providers, wage verification companies, and other commercial or non-commercial entities that collect and maintain information regarding employment and wages. 42 U.S.C. 1320e-3(c)(1). </FTNT> <FTNT> <SU>12</SU>  42 U.S.C. 1320e-3(a). “Information exchanges” are the automated comparison of our system(s) of records with information of payroll data providers. 42 U.S.C. 1320e-3(c)(2). </FTNT> The NPRM proposed policies and procedures for implementing the access to and use of the information hel ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 199k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━