GN 02301: Policy and Disposition of Underpayments
TN 3 (09-17)
Citation: Social Security Act (the Act), Section 204, 20 CFR 404.503
A. Statutory order of priority for Title II underpayments
If the underpaid beneficiary is deceased, we first apply any amounts due the deceased beneficiary against any overpayments owed by the deceased beneficiary, unless we have waived recovery of the overpayment(s), as stated in GN 02301.065. We must then issue any remaining underpayment using the following order of priority:
|
Issue payment to the deceased’s |
If |
|---|---|
|
l. Surviving spouse |
They were:
NOTE: A surviving divorced spouse does not qualify for an underpayment under this provision. |
|
2. Child(ren) |
For the month of death, they were entitled to a monthly benefit on the same earnings record as the deceased beneficiary. |
|
3. Parent(s) |
For the month of death, they were entitled to a monthly benefit on the same earnings record as the deceased beneficiary. |
|
4. Surviving spouse |
They are not qualified under #1 of this chart. |
|
5. Child(ren) |
They are not qualified under #2 of this chart. |
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6. Parent(s) |
They are not qualified under #3 of this chart. |
|
7. Legal representative of the deceased beneficiary’s estate |
They are representing the deceased person's estate as an administrator or executor. However, other persons may also qualify as legal representatives. For policy on who can act as a legal representative, see GN 02301.035. |
NOTE: For more information about establishing a relationship as a surviving spouse, child, or parent, see GN 02301.055C and GN 02301.055F.
NOTE: An adult convicted of the felonious and intentional homicide of another person cannot be entitled to monthly benefits or the Lump Sum Death Payment (LSDP) on the earnings record of that person, or receive any underpayment due the deceased person. Effective March 1982, the same restrictions apply to juveniles. For policy on forfeiture of entitlement due to homicide of the worker, see GN 00304.060.
B. More than one individual eligible to receive payment
1. More than one individual in the same order of priority
If there is more than one individual in the highest order of priority, divide the underpayment equally among them (see GN 02301.070C). For example, if there are three children in the highest order of priority, divide the underpayment equally among them.
2. Individual dies before receiving payment
If an individual in the order of priority list dies before receiving payment or before negotiating the check representing the payment, divide their share of the underpayment among the remaining living individual(s) in the same category in the order of priority. If there is no other individual(s) in that same category, pay the underpayment to the living person(s) in the next lower category.
NOTE: Before issuing a death underpayment, please check the Numident to determine if the potential recipient is deceased.
C. Good acquittance for underpayments
1. Policy for good acquittance
An individual gives the Social Security Administration (SSA) good acquittance when payment to that individual releases SSA from further liability for such payment. This means the individual has attested that there is no one of higher priority who could claim an underpayment and we have determined that this is true.
2. No precedent for an individual to give good acquittance
Where there is no precedent as to whether an individual designated to receive or collect assets of a deceased beneficiary's estate can give “good acquittance” for the payment, send the case to the regional office (RO), Program Service Center (PSC), Operations Support Branch (OSB), or equivalent, as appropriate. The receiving office then forwards the question to the Regional Chief Counsel (RCC) or the Office of General Counsel (OGC) for guidance.
D. Valid request for payment after we distribute the underpayment
If we receive a valid request for payment after we distribute an underpayment, the field office (FO) should explore the possibility of an amicable settlement among the eligible recipients. If settlement is not possible, the FO issues payment to the adverse claimant for his or her proper share and request refund of amounts erroneously paid to the other recipient(s). If the recipient(s) we previously paid fails to refund the money, treat these funds as an overpayment and process accordingly.