GN 00504.101: Termination of Organizational or Individual Representative Payees Serving Multiple Beneficiaries

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~~Effective Dates: 10/18/2017 - Present~~
Effective Dates: 10/31/2017 - Present
TN 21 (10-17)
GN 00504.101 Termination of Organizational or Individual Representative Payees Serving Multiple Beneficiaries
A. Background
An organizational or individual representative payee receiving benefits on behalf of multiple beneficiaries may become unable to continue as payee for various reasons, including financial failure, loss of operating license, change in business ownership, or retirement of the payee. In addition, SSA may initiate action to remove or terminate a payee when we find that the payee is not performing their duties satisfactorily, including when a payee has misused funds. To ensure a smooth transition for the beneficiary, follow the instructions in this section.
B. Procedures for payee termination
Do not suspend benefits when developing for a new payee, unless appropriate per GN 00504.105.
To ensure there is no lapse in benefits when terminating an organizational or individual representative payee serving multiple beneficiaries, appoint a new payee or make direct payment to the beneficiary by following these steps:
1. Determine if a quick response check is necessary
* Termination of an organizational or individual representative payee serving multiple beneficiaries may require a quick response check. The FO should inform the RO that a quick response check is necessary. To obtain a list of conditions requiring a quick response check and procedures for conducting a site review, see GN 00605.440. The FO or RO has the discretion to determine if other conditions not listed in the POMS are reasons for a site review.
* If you suspect a payee has misused benefits, follow the procedures in GN 00604.000. When a payee closes during a misuse investigation, consult your RO for guidance.
2. Establish contact with payee
* Determine the authorized contact person who represents the organization or individual. If there is reason to believe the business will be closing abruptly, obtain information about where and how to contact the payee after the business closes.
* Ask the contact to furnish the names, current, or last known residence address, and telephone numbers for each beneficiary the representative payee serves.
* Obtain a list of beneficiaries from the Electronic Representative Payee System (eRPS) for whom the payee is currently appointed. For instructions on obtaining a list of all beneficiaries, an organizational payee serves, see MS INTRANETERPS 020.017 and for individual payees see MS INTRANETERPS 020.020
* Compare the eRPS list to the list provided by the payee and resolve any discrepancies. Document the telephone call and information obtained in Report of Contact Details screen in eRPS.
* In cases where the current payee is uncooperative, and you cannot locate a beneficiary, follow the whereabouts unknown policy in GN 02602.320C.
3. Reassess the capability of adult beneficiaries
Reassess the capability of adult beneficiaries to receive direct payment, unless they are legally incompetent. Follow the procedures for determining capability in GN 00502.020 or for guidance on reevaluating beneficiaries’ ability to manage their own benefits GN 00502.055.
IMPORTANT: In an effort to prevent a lapse in benefits when there is an immediate termination of the payee relationship or closure of a payee serving multiple beneficiaries, it may be necessary to appoint a new representative payee before you can reassess capability or evaluate for potential alternate payees. For instructions on appointing a new representative payee in immediate termination situations, see GN 00504.101C in this section.
4. Locate and appoint a new representative payee
* When an organization closes or an individual payee goes out of business or stops serving, locate a new payee for all beneficiaries who still require a payee. For guidance on:
* determining the need for a successor payee, see GN 00504.100.
* how to find payee leads, see GN 00502.100.
* payee preference, see GN 00502.105.
* taking payee applications, see GN 00502.107 and GN 00502.110.
* mergers when all of the beneficiaries have the same new payee (change in ownership, merger, etc.), refer to GN 00502.110B.3 and GN 00504.240B2a and b.
* Do not suspend benefits for payee development (i.e., S8 or S08) unless the beneficiary meets the guidelines in GN 00504.110 and GN 00504.105. If contacts are unsuccessful and you are not able to locate the beneficiary, determine if it is appropriate to place the case in whereabouts unknown status, S9 or S06. The instructions describe a required two-step process to move the case from S8/S08 to S9/S06 in GN 00504.110C.2.
NOTE: Remember to follow the procedure for required contacts before issuing payments following a period of suspension or nonpayment before resuming payments, per GN 00504.160C.
* If you have difficulty locating a successor payee for an incapable adult, if appropriate, initiate immediate direct payment per GN 00504.105.
* Update the Master Beneficiary Record (MBR) and Supplemental Security Record (SSR) with the new payee selection. For guidance on procedures for updating the MBR and SSR, see GN 00502.110 and GN 00502.190.
5. Check bank account titling due to bankruptcy
* If you know the business is closing due to bankruptcy, take quick action to determine if the bank account holding the beneficiaries’ funds is properly titled. For policy regarding payee account titling, see
* GN 00603.010 Conserving Benefits in a Savings or Checking Account
* GN 00603.020 Collective Checking and Savings Accounts Managed by Representative Payees.
* If the bank account holding the beneficiaries’ funds is properly titled, the bankruptcy filing does not affect the account. If the title is not proper, the bankruptcy filing may affect the account and the Office of the General Counsel (OGC) may need to intervene by contacting the bankruptcy court. For guidance on account(s) not titled properly, contact your regional office (RO).
6. Facilitate transfer of conserved funds
* Determine if there are dedicated accounts, trust accounts, or burial accounts. For guidance on the transfer of benefits to a trust, see GN 00602.075.
* The former payee must return all conserved funds belonging to living beneficiaries to SSA for reissuance to the new payee or beneficiary, except in limited circumstances approved by SSA. Funds in the client account belonging to a living beneficiary are conserved funds. Tell the former payee to return any conserved funds to us for recertification to the new payee or beneficiary within 30 days per, Transfer of Conserved Funds GN 00603.055. Conserved funds of deceased beneficiaries belong to the estate of the deceased. Tell the former payee to transfer these funds directly to the beneficiary’s estate per GN 00603.100B.2.
* Advise the new payee about the existence of any other assets that are held by the former payee in cases where you have reason to believe that the beneficiary is unaware of these assets or the former payee may not be cooperative. NOTE: Do not disclose information to a new payee about a former payee’s identity or address unless you obtain appropriate consent from the new payee. For guidance on obtaining consent, see GN 03305.001.
* Do not disclose information to a former payee about a new payee’s identity or address unless you obtain appropriate consent from the new payee. For guidance on obtaining consent, see GN 03305.001.
* If a beneficiary transfers to another facility and the former payee receives a monthly or retroactive Social Security payment, request the former payee return the payment to SSA for recertification to the new payee. If the beneficiary owes the former payee money, the former payee should bill the beneficiary per Payment of Beneficiary’s Past Due Debts – Claims of Creditors GN 00602.030.
* If the terminated payee established a collective account for beneficiaries’ funds, direct the payee to provide SSA with the account ledgers and any other record that identifies what portion of the conserved funds belong to each beneficiary.
* When the terminated payee is a residential custodian of multiple beneficiaries, consider asking if the terminated payee has made a recent group purchase. If so, tell the terminated payee to consider reimbursing each beneficiary with ownership for his or her share of the purchase, unless the item and all joint owners move to the same facility and the beneficiaries can continue to use the item per Group Purchases Beneficiary Resides in an Institution/Nursing Home or Other Group Living Facility GN 00602.070.
7. Secure final accounting
When we terminate a payee, specific selection criteria determines if the payee is subject to a final accounting:
* An automated selection process chooses payees of Title II cases for a final accounting based on specific criteria. For information on the final accounting selection criteria in Title II cases, see GN 00605.250.
* Title XVI and concurrent case selection is a manual process. The FO must identify and request a final accounting from payees of Title XVI or concurrent cases if the organization or individual was payee for 12 months or less. For information on selecting Title XVI and concurrent payees for a final accounting, see GN 00605.352.
* You may require a former payee to provide a final accounting any time you have concerns about the former payee’s use of benefits, investment of benefits, or return of conserved funds. If you have reason to believe the former payee is not fully cooperating with us with respect to conserved funds or death overpayments, you may request a final accounting for any or all of the beneficiaries, including those for whom the organization or individual was serving as payee for more than a year.
8. Resolve overpayments
Benefits issued to the payee after the death of a beneficiary may be an overpayment to the payee, per GN 02201.001B. Information about death overpayments is in eRPS and in the Non-entitled Debtor’s database in the Debt Management System.
Benefits issued to the payee after the death of a beneficiary may be an overpayment to the payee, per GN 02201.001D. Information about death overpayments is in eRPS and in the Non-entitled Debtor’s database in the Debt Management System.
When applicable:
* Verify receipt of any payments after the death of the beneficiary. Treasury should reclaim these payments, whether the payment was a paper check or electronic fund transfer. For guidance on Reclamations, see GN 02408.000. If the payee received a check for the month of the beneficiary’s death (Title II) or the month after the beneficiary’s death (Title XVI) and the check is outstanding the following message will display. “RP OVERPAID DUE TO DEATH OF BENE”.
* Select List Beneficiaries/Recipients from the Terminated List screens to obtain the list of terminated beneficiaries.
* If the eRPS death overpayment indicator on the Terminated List screen is incorrect, see MS INTRANETERPS 020.024.
* Notify the former payee of the overpayment per GN 02201.009. The terminated payee is solely responsible for repayment, per GN 02205.003. Full waiver development is required to find the terminated payee without fault. If there was a change in ownership of the organizational payee, the terminated payee may not be liable for the overpayment if the ownership change occurred after the overpayment was established; however, you should consider the facts to determine if the new payee is liable. The payee can file a waiver request per GN 02201.019. If the terminated payee files a request for a waiver, do not process using the $1,000 administrative waiver tolerance, per GN 02201.013 or GN 02250.350.
9. Document termination and inactivate the organizational or individual payee in RPS
Verify that the action applies to all beneficiaries for whom the organization or individual is payee before proceeding. Then take the following actions:
* Use the Make Note screen found in MS INTRANETERPS 015.012 and GN 015.013B. to indicate reasons for the payee closure and any other important information about the event.
* Management completes the appropriate termination actions. If this is a FFS payee closing, first update the Fee for Service screen by adding the Stop Date and the Reason Stopped to preserve the Fee for Service screen data MS INTRANETERPS 014.008. Then take action to terminate the payee in eRPS.
* Terminate Organization/Institution screen per MS INTRANETERPS 014.004; and
* List of Active Beneficiaries screen when you have completed the changes for all beneficiaries per MS INTRANETERPS 013.002.
If the payee is subject to expanded monitoring, annotate the Representative Payee Monitoring Application (RPMA) http://phapps.ph.ssa.gov/rpmonitor/rpstart.asp). For information regarding the RPMA process, see GN 00605.406A.3.
REMINDER: You will no longer be able to select this organization or individual to be payee without a new face-to-face application. Terminating a payee relationship in eRPS does not terminate the payee relationship on the MBR/SSR. It is the FO’s responsibility to take action to place the beneficiary in direct pay or select a new payee by creating a new representative payee application through the eRPS system so that the LAF code and payee data on the MBR or SSR updates accordingly.
C. Procedures for payee termination requiring an immediate appointment of a new payee prior to reassessing beneficiary capability or evaluating potential alternate payees
When there is an immediate termination of an organizational or individual payee serving multiple beneficiaries, it may be necessary to appoint a new payee prior to reassessing a beneficiary’s capability or evaluating potential alternate payees to avoid any lapse in benefits. Follow the guidelines listed when resolving these cases.
1. Procedure for appointing a single organizational payee prior to terminating a current organizational payee in eRPS
Prior to terminating the current organizational payee follow these steps:
* Locate and ask a currently serving organizational payee to serve as payee for all affected beneficiaries. NOTE: If a payee has had a previous face-to-face interview, is currently serving as a payee, and is qualified to do so, a telephone interview is sufficient per GN 00502.113B.
* Process a mass change of payee for all beneficiaries by following instructions in GN 00504.240.
* Mail manual advance notices for all beneficiaries per GN 00503.100 or use the SSA-4164 when applicable, per GN 00503.100B.
* After the advance notice period is over, process the new payee determination selection per MS INTRANETERPS 012.002. For guidance on processing the new payee determination selection, see GN 00502.185.
After the change of payee is complete, contact each beneficiary:
* Conduct a capability determination. For guidance on reassessing beneficiaries’ capability, see instructions in GN 00502.020 and GN 00502.055.
* Discuss any potential alternate payees.
* Initiate direct payment when applicable.
* If the beneficiary is determined incapable and identifies alternate payee(s), complete payee applications for the potential qualified individual or organizational payees per MS INTRANTERPS 012.002. For guidance on taking payees applications, see GN 00502.110. NOTE: If a payee has had previous face-to-face interview, is currently serving as a payee, and is qualified to do so, a telephone interview is sufficient per GN 00502.113B.
* Mail advance notices for all beneficiaries per GN 00503.100 or use the SSA-4164 when applicable per GN 00503.100B.
* After the advance notice period is over, process the new payee determination selection per MS INTRANTERPS 012.002. For guidance on processing the new payee determination selection, see GN 00502.185.
2. Procedure for appointing multiple payees prior to terminating the current organizational or individual payee in RPS
Prior to terminating the current payee follow these steps:
* Locate and ask potential qualified individual or organizational payees to serve as payee for affected beneficiaries per GN 00502.100. For guidance on payee preference, see GN 00502.105.
* Complete payee applications for the potential qualified individual or organizational payees per MS INTRANTERPS 012.002. For guidance on taking payee applications, see GN 00502.110. NOTE: If a payee has had previous face to face interview, is currently serving as a payee, and is qualified to do so, a telephone interview is sufficient per GN 00502.113B.
* Mail advance notices for all beneficiaries per GN 00503.100 (or use the SSA-4164 when applicable per GN 00503.100B).
* After the advance notice period is over, process the new payee determination selection per MS INTRANTERPS 012.002. For guidance on processing the new payee determination selection, see GN 00502.185.
After the payee change is complete, contact each beneficiary:
* Conduct a capability determination. For guidance on reassessing beneficiaries’ capability, see instructions in GN 00502.020 and GN 00502.055.;
* discuss any potential alternate payees; and
* initiate direct payment when applicable.
* If the beneficiary is determined incapable and identifies alternate payee(s), complete payee applications for the potential qualified individual or organizational payees per MS INTRANTERPS 012.002. For guidance on taking payees applications, see GN 00502.110.
NOTE: If a payee has had previous face to face interview, is currently serving as a payee, and is qualified to do so, a telephone interview is sufficient per GN 00502.113B.
* Mail advance notices for all beneficiaries per GN 00503.100 or use the SSA-4164 when applicable per GN 00503.100B.
* After the advance notice period is over, process the new payee determination selection per MS INTRANTERPS 012.002. For guidance on processing the new payee determination selection, see GN 00502.185.
D. References
* GN 00502.020 Determining Capability – Adult Beneficiaries
* GN 00502.055 Reevaluating Beneficiary’s Ability to Manage Benefits
* GN 00502.100 How to Find Payee Leads
* GN 00502.113 Interviewing the Payee Applicant
* GN 00502.185 Processing Payee Selection in eRPS
* GN 00503.100 Advance Notice
* GN 00503.110 Appeal Rights
* GN 00503.120 Response Received to Advance Notice
* GN 00504.100 Determining the Need for a Successor Payee
* GN 00504.105 Direct Payment to Incapable Beneficiaries When Further Development is Needed
* GN 00504.160 Required Contacts before Issuing Payments Following a Period of Suspension or Nonpayment
* GN 00504.240 Representative Payee or Name Change for a Group of Beneficiaries
* GN 00603.100 Entitlement Terminated – Notice to be Given About Conserved Benefits
* MS INTRANETEPS 012.002 Selection Decision

POMS Reference

GN 00504.101: Termination of Organizational or Individual Representative Payees Serving Multiple Beneficiaries