Federal Register, Volume 84 Issue 32 (Friday, February 15, 2019)

[Federal Register Volume 84, Number 32 (Friday, February 15, 2019)]
[Rules and Regulations]
[Pages 4323-4326]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-02483]

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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404, 408, and 416

[Docket No. SSA-2015-0006]
RIN 0960-AH78

Prohibiting Persons With Certain Criminal Convictions From
Serving as Representative Payees

AGENCY: Social Security Administration.

ACTION: Final rules.

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SUMMARY: We are finalizing our proposed regulations on conducting
background checks to prohibit persons convicted of certain crimes from
serving as representative payees under the Social Security Act (Act),
as required by the Strengthening Protections for Social Security
Beneficiaries Act of 2018.

DATES: These final rules will be effective March 18, 2019.

FOR FURTHER INFORMATION CONTACT: Kevin Salamone, Office of Income
Security Programs, Social Security Administration, 6401 Security
Boulevard, Baltimore, MD 21235-6401, (410) 966-0854. 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 http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Background

Representative payees manage benefit payments for beneficiaries or
recipients who are incapable, due to a mental or physical impairment,
of managing their Social Security, Special Veterans Benefits, or
Supplemental Security Income (SSI) payments, or of directing another
person to manage those payments. Generally, if a beneficiary or
recipient is under age 18, we will pay benefits to a representative
payee; however, in certain situations, we make direct payments to a
beneficiary under age 18 who shows the ability to manage the
benefits.\1\ In cases where the beneficiary or recipient is 18 years or
older, we select a representative payee if we believe that payment of
benefits through a representative payee, rather than direct payment to
the beneficiary, will better serve the beneficiary's interest. A
representative payee may be an organization, such as a social service
agency, or a person, such as a parent, relative, or friend of the
beneficiary. We require a representative payee to use benefits in the
beneficiary's best interest and, with certain exceptions, to report
expenditures to us to ensure the representative payee is using funds
appropriately.\2\
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\1\ We use the word ``beneficiary'' to include both
beneficiaries and recipients.
\2\ Representative payees may receive an annual Representative
Payee Report to account for the benefit payments received. In
accordance with section 102 of the Strengthening Protections for
Social Security Beneficiaries Act of 2018, Public Law 115-165, 132
Stat. 1257, 1260, we no longer require the following payees to
complete an annual Representative Payee Report: (1) Natural or
adoptive parents of a minor child beneficiary who primarily reside
in the same household as the child; (2) a legal guardian of a minor
child beneficiary who primarily resides in the same household as the
child; (3) Natural or adoptive parents of a disabled adult
beneficiary who primarily reside in the same household with the
beneficiary; and (4) the spouse of a beneficiary.
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When a person or an organization requests to serve as a
representative payee, we investigate the potential representative payee
to help ensure that the person or organization will perform the duties
of a representative payee responsibly. We look at factors such as the
potential representative payee's relationship to the beneficiary, any
past performance as a representative payee for other beneficiaries, and
any criminal history.
On April 13, 2018, the President signed into law the Strengthening
Protections for Social Security Beneficiaries Act of 2018.\3\ Section
202 of the law \4\ codifies our current policy to conduct criminal
background checks on representative payee applicants and to prohibit
the selection of certain representative payee applicants who have a
felony conviction of committing, attempting, or conspiring to commit
certain crimes.\5\ In addition, the new law requires that we conduct
criminal background checks on all currently serving representative
payees who do not meet one of the exceptions set out in the law, and
continue to do so at least once every five years.\6\
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\3\ Public Law 115-165, 132 Stat. 1257.
\4\ 132 Stat. at 1267.
\5\ Section 202(d) of the law, 132 Stat. at 1271, provides that
the requirements of section 202 ``shall apply with respect to any
individual appointed to serve as a representative payee pursuant to
section 205(j), 807, or 1631(a)(2) of the Social Security Act on or
after January 1, 2019.''
\6\ Section 202(e) of Public Law 115-165, 132 Stat. at 1271-72.
We may not apply these prohibitions as an absolute bar to serving as
a representative payee if the representative payee applicant is the
custodial parent of the minor child beneficiary, custodial parent of
a beneficiary who is under a disability which began before the
beneficiary attained age 22, custodial spouse of the beneficiary,
custodial grandparent of the minor child beneficiary, custodial
court-appointed guardian of the beneficiary, parent who was
previously the representative payee for his or her minor child who
since turned age 18 and continued to be eligible for benefits; or if
the representative payee applicant received a Presidential or
gubernatorial pardon for the conviction.
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On October 11, 2018, we published a Notice of Proposed Rulemaking
(NPRM) in the Federal Register.\7\ In the NPRM, we proposed to codify
the requirements of section 202 to conduct background checks on
representative payee applicants and to prohibit those representative
payee applicants and representative payees with the statutorily
enumerated felony convictions \8\ from serving as a

[[Page 4324]]

representative payee. We also proposed to implement the requirement
that we conduct criminal background checks on all currently serving
representative payees who do not meet one of the exceptions established
in the law, and that we will continue to do so at least once every five
years. We are adopting the proposed changes as final rules without
revision.
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\7\ 83 FR 51400. https://www.federalregister.gov/documents/2018/10/11/2018-22168/prohibiting-persons-with-certain-criminalconvictions-from-serving-as-representative-payees.
\8\ We proposed to add a new paragraph to Sec. Sec. 404.2022
and 416.622 of our regulations to reflect the felony prohibitions in
the legislation. We are prohibited from selecting representative
payee applicants with a felony conviction of: (1) Human trafficking,
(2) false imprisonment, (3) kidnapping, (4) rape and sexual assault,
(5) first-degree homicide, (6) robbery, (7) fraud to obtain access
to government assistance, (8) fraud by scheme, (9) theft of
government funds or property, (10) abuse or neglect, (11) forgery,
or (12) identity theft or identity fraud. As further provided in
Sec. Sec. 404.2022(f) and 416.622(f), we will also prohibit the
selection of a representative payee applicant with a felony
conviction of an attempt to commit any of these crimes or conspiracy
to commit any of these crimes.
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In response to the NPRM, we received 11 timely submitted comments
that addressed issues within the scope of our proposed rules. The
comments are available through the eRulemaking docket, available online
at www.regulations.gov, and then navigating to this rulemaking docket,
SSA-2015-0006.

Public Comments and Discussion

Comment: Some commenters objected to the proposed rules in their
entirety, stating that prohibiting individuals convicted of the
specified felonies from being representative payees is discriminatory
against these individuals based on their legal status as convicted
felons. In a related concern, other commenters who objected to the
proposed rule maintained that we should provide statistical data
demonstrating that (1) felons exploited their role as representative
payees, or (2) prohibiting a convicted felon from serving as a
representative payee results in more protection for beneficiaries.
Response: We acknowledge the commenters' concerns regarding these
prohibitions. However, these rules restate the statutory prohibitions
enacted by Congress and signed into law by the President, and as such
we do not have the discretion to adopt the commenters' suggestions.
Comment: Other commenters asked whether there was a statute of
limitations on our review of past criminal convictions, indicating that
a criminal conviction, even for one of the crimes specified in the
proposed rule, should be disregarded after a long enough period of time
has lapsed after the conviction. In this regard, commenters also asked
which crimes will be included in our criminal background checks.
Response: The enacted statute and these final rules do not provide
an exception based on how long in the past a criminal conviction for
one of the prohibited felonies may have occurred. Our criminal
background checks look for all convictions for the prohibited felonies
in the background history of a representative payee applicant and
existing representative payees. Regarding the issue of which crimes
will be included in our criminal background checks: Both the statute
and this regulation list the specific crimes that prohibit individuals
from becoming representative payees. However, we consider and evaluate
all available information when we evaluate the suitability of a
representative payee applicant. Accordingly, if our criminal background
checks reveal convictions for a crime other than the ones listed as a
qualifying bar in the statute and in this regulation, we may consider
those convictions when we determine whether an applicant will be a
suitable representative payee. While the convictions listed in the
statute and in this regulation result in prohibition from serving as a
representative payee, unless specifically excepted, we will not
consider other convictions to absolutely prohibit the representative
payee applicant from being selected as a representative payee.
Comment: Other commenters questioned whether a conviction for a
prohibited felony would bar a person from serving as a representative
payee for elderly parents or grandparents, or what would happen if a
beneficiary only has prospective representative payees barred by these
rules.
Response: The enacted statute and these final rules do not provide
an exception for a child or grandchild with a prohibited felony to
serve as a representative payee for either a parent or grandparent.
However, under the statute and our rules, if the child or grandchild is
the custodial court-appointed guardian of the beneficiary, or has
received a Presidential or gubernatorial pardon for the conviction, we
would not consider the conviction an absolute bar to serving as the
representative payee.
Comment: One commenter disagreed with our usage of the term
``custody'' and ``custodial spouse'' because individuals who live at
home with family, or in a group home, should not be interpreted as
being in the family's custody. This commenter made suggestions for
alternate language.
Response: We acknowledge the commenter's concern regarding the
terminology, particularly in common usage. However, our use of
``custodial'' directly reflects the enacted statutory language.

Regulatory Procedures

Executive Order 12866 as Supplemented by Executive Order 13563

We consulted with OMB and determined that this final rule does not
meet the criteria for a significant regulatory action under Executive
Order 12866, as supplemented by Executive Order 13563. Thus, OMB did
not formally review the final rule.

Executive Order 13771

This final rule is not subject to the requirements of Executive
Order 13771 because it is administrative in nature and results in no
more than de minimis costs.

Regulatory Flexibility Act

We certify that this final rule will not have a significant
economic impact on a substantial number of small entities because it
affects only individuals. Therefore, the Regulatory Flexibility Act, as
amended, does not require us to prepare a regulatory flexibility
analysis.

Paperwork Reduction Act

These rules do not create any new or affect any existing
collections and, therefore, do not require Office of Management and
Budget approval under the Paperwork Reduction Act.
What is our authority to make rules and set procedures for
determining whether a person is disabled under the statutory
definition?
The Act authorizes us to make rules and regulations and to
establish necessary and appropriate procedures to implement them.\9\
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\9\ Sections 205(a), 702(a)(5), and 1631(d)(1).

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social
Security--Disability Insurance; 96.002, Social Security--Retirement
Insurance; 96.004, Social Security--Survivors Insurance; 96.006,
Supplemental Security Income; and 96.020--Special Benefits for
Certain World War II Veterans)

List of Subjects

20 CFR Part 404

Administrative practice and procedure, Aged, Blind, Disability
benefits, Disability insurance, Old-Age, Survivors, Reporting and
recordkeeping requirements, Social security.

20 CFR Part 408

Administrative practice and procedure, Aged, Reporting and
recordkeeping requirements, Social security, Supplemental Security
Income (SSI), Veterans.

[[Page 4325]]

20 CFR Part 416

Administrative practice and procedure, Aged, Blind, Disability
benefits, Public assistance programs, Reporting and recordkeeping
requirements, Supplemental Security Income (SSI).

Nancy A. Berryhill,
Acting Commissioner of Social Security.

For the reasons stated in the preamble, we amend 20 CFR chapter
III, parts 404, 408, and 416 as set forth below:

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE
(1950-)

Subpart U--Representative Payment

0
1. The authority citation for subpart U of part 404 continues to read
as follows:

Authority: Secs. 205(a), (j), and (k), and 702(a)(5) of the
Social Security Act (42 U.S.C. 405(a), (j), and (k), and 902(a)(5)).

0
2. Amend Sec. 404.2020 by revising paragraphs (d) and (e) and adding
paragraph (f) to read as follows:

Sec. 404.2020 Information considered in selecting a representative
payee.

* * * * *
(d) Whether the potential payee has custody of the beneficiary;
(e) Whether the potential payee is in a position to know of and
look after the needs of the beneficiary; and
(f) The potential payee's criminal history.

0
3. Amend Sec. 404.2022 by adding paragraph (f) to read as follows:

Sec. 404.2022 Who may not serve as a representative payee?

* * * * *
(f) Was convicted under Federal or State law of a felony for: Human
trafficking, false imprisonment, kidnapping, rape or sexual assault,
first-degree homicide, robbery, fraud to obtain access to government
assistance, fraud by scheme, theft of government funds or property,
abuse or neglect, forgery, or identity theft or identity fraud. We will
also apply this provision to a representative payee applicant with a
felony conviction of an attempt to commit any of these crimes or
conspiracy to commit any of these crimes.
(1) If the representative payee applicant is the custodial parent
of a minor child beneficiary, custodial parent of a beneficiary who is
under a disability which began before the beneficiary attained the age
of 22, custodial spouse of a beneficiary, custodial court-appointed
guardian of a beneficiary, or custodial grandparent of the minor child
beneficiary for whom the applicant is applying to serve as
representative payee, we will not consider the conviction for one of
the crimes, or of attempt or conspiracy to commit one of the crimes,
listed in this paragraph (f), by itself, to prohibit the applicant from
serving as a representative payee. We will consider the criminal
history of an applicant in this category, along with the factors in
paragraphs (a) through (e) of this section, when we decide whether it
is in the best interest of the individual entitled to benefits to
appoint the applicant as a representative payee.
(2) If the representative payee applicant is the parent who was
previously the representative payee for his or her minor child who has
since turned age 18 and continues to be eligible for benefits, we will
not consider the conviction for one of the crimes, or of attempt or
conspiracy to commit one of the crimes, listed in this paragraph (f),
by itself, to prohibit the applicant from serving as a representative
payee for that beneficiary. We will consider the criminal history of an
applicant in this category, along with the factors in paragraphs (a)
through (e) of this section, when we decide whether it is in the best
interest of the individual entitled to benefits to appoint the
applicant as a representative payee.
(3) If the representative payee applicant received a Presidential
or gubernatorial pardon for the relevant conviction, we will not
consider the conviction for one of the crimes, or of attempt or
conspiracy to commit one of the crimes, listed in this paragraph (f),
by itself, to prohibit the applicant from serving as a representative
payee. We will consider the criminal history of an applicant in this
category, along with the factors in paragraphs (a) through (e) of this
section, when we decide whether it is in the best interest of the
individual entitled to benefits to appoint the applicant as a
representative payee.

0
4. Amend Sec. 404.2024 by revising paragraph (a)(9) and adding
paragraph (a)(10) to read as follows:

Sec. 404.2024 How do we investigate a representative payee applicant?

* * * * *
(a) * * *
(9) Determine whether the payee applicant is a creditor of the
beneficiary (see Sec. 404.2022(e)).
(10) Conduct a criminal background check on the payee applicant.
* * * * *

0
5. Add Sec. 404.2026 to read as follows:

Sec. 404.2026 How do we investigate an appointed representative
payee?

After we select an individual or organization to act as your
representative payee, we will conduct a criminal background check on
the appointed representative payee at least once every 5 years.

PART 408--SPECIAL BENEFITS FOR CERTAIN WORLD WAR II VETERANS

Subpart F--Representative Payment

0
6. The authority citation for subpart F of part 408 continues to read
as follows:

Authority: Secs. 702(a)(5), 807, and 810 of the Social Security
Act (42 U.S.C. 902(a)(5), 1007, and 1010).

0
7. Add Sec. 408.626 to read as follows:

Sec. 408.626 How do we investigate an appointed representative payee?

After we select an individual or organization as your
representative payee, we investigate him or her following the rules in
Sec. 404.2026 of this chapter.

PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND
DISABLED

Subpart F--Representative Payment

0
8. The authority citation for subpart F of part 416 continues to read
as follows:

Authority: Secs. 702(a)(5), 1631(a)(2) and (d)(1) of the Social
Security Act (42 U.S.C. 902(a)(5) and 1383(a)(2) and (d)(1)).

0
9. Amend Sec. 416.620 by revising paragraphs (d) and (e) and adding
paragraph (f) to read as follows:

Sec. 416.620 Information considered in selecting a representative
payee.

0
10. Amend Sec. 416.622 by adding paragraph (f) to read as follows:

Sec. 416.622 Who may not serve as a representative payee?

[[Page 4326]]

to a representative payee applicant with a felony conviction of an
attempt to commit any of these crimes or conspiracy to commit any of
these crimes.
(1) If the representative payee applicant is the custodial parent
of a minor child beneficiary, custodial parent of a beneficiary who is
under a disability which began before the beneficiary attained the age
of 22, custodial spouse of a beneficiary, custodial court-appointed
guardian of a beneficiary, or custodial grandparent of the minor child
beneficiary for whom the applicant is applying to serve as
representative payee, we will not consider the conviction for one of
the crimes, or of attempt or conspiracy to commit one of the crimes,
listed in this paragraph (f), by itself, to prohibit the applicant from
serving as a representative payee. We will consider the criminal
history of an applicant in this category, along with the factors in
paragraphs (a) through (e) of this section, when we decide whether it
is in the best interest of the individual entitled to benefits to
appoint the applicant as a representative payee.
(2) If the representative payee applicant is the parent who was
previously the representative payee for his or her minor child who has
since turned age 18 and continues to be eligible for benefits, we will
not consider the conviction for one of the crimes, or of attempt or
conspiracy to commit one of the crimes, listed in this paragraph (f),
by itself, to prohibit the applicant from serving as a representative
payee for that beneficiary. We will consider the criminal history of an
applicant in this category, along with the factors in paragraphs (a)
through (e) of this section, when we decide whether it is in the best
interest of the individual entitled to benefits to appoint the
applicant as a representative payee.
(3) If the representative payee applicant received a Presidential
or gubernatorial pardon for the relevant conviction, we will not
consider the conviction for one of the crimes, or of attempt or
conspiracy to commit one of the crimes, listed in this paragraph (f),
by itself, to prohibit the applicant from serving as a representative
payee. We will consider the criminal history of an applicant in this
category, along with the factors in paragraphs (a) through (e) of this
section, when we decide whether it is in the best interest of the
individual entitled to benefits to appoint the applicant as a
representative payee.

0
11. Amend Sec. 416.624 by revising paragraph (a)(9) and adding
paragraph (a)(10) to read as follows:

Sec. 416.624 How do we investigate a representative payee applicant?

* * * * *
(a)* * *
(9) Determine whether the payee applicant is a creditor of the
beneficiary (see Sec. 416.622(e)).
(10) Conduct a criminal background check on the payee applicant.
* * * * *

0
12. Add Sec. 416.626 to read as follows:

Sec. 416.626 How do we investigate an appointed representative payee?

After we select an individual or organization to act as your
representative payee, we will conduct a criminal background check on
the appointed representative payee at least once every 5 years.

[FR Doc. 2019-02483 Filed 2-14-19; 8:45 am]
BILLING CODE 4191-02-P