TN 25 (04-14)

A. Policy for title II and title XVI LP death cases

SSA sometimes generates incorrect payments that the beneficiary or recipient’s survivors subsequently cash because we receive late notifications of death. The Department of the Treasury (Treasury) can only reclaim on the incorrect payments 12 months to the day back from the last incorrect payment issued. See example of reclamation in GN 02401.917D in this section.

Treasury cannot reclaim for any incorrect payments outside of that reclamation period. We will pursue recovery of the incorrect payments made outside the Treasury reclamation period. Refer these cases to the Office of the Inspector General (OIG) for a fraud investigation, via the e8551 (Electronic Reporting Form for Programmatic Fraud) as outlined in GN 04111.010.

NOTE: These instructions refer to payments by paper check and not payments by Electronic Funds Transfer (EFT).

B. Incorrect payments definition

The term “incorrect payments” describes payments issued after the death of a beneficiary or recipient as the result of a late notification of death.

C. Pursuing incorrect payments in limited payability death cases

We will pursue the recovery of payments (outside of the reclamation period) that qualify as LP cases and that are issued incorrectly after the death of a title II or a title XVI individual as a result of late notification of death.

Unlike other kinds of payments to which a beneficiary or recipient is not entitled, incorrect payments:

• are not legally defined overpayments;

  EXCEPTION: If SSA issues a check after the death of the beneficiary or recipient to a representative payee, the payee is overpaid. For additional information on overpayment policy, see GN 02201.001. However, if both the beneficiary or recipient AND the representative payee are deceased, we will not take recovery action.

• do not have due process rights associated with them.

• are not recoupable as an overpayment;

  NOTE: This means that the statutory and regulatory tools we use to recoup overpayments (e.g., automatic adjustment against benefits due other eligible beneficiaries/recipients on the same record, tax refund offset) are not available. However, if the person who cashed the checks wishes to repay us by monthly benefit reduction, we will accept that repayment method.

• when cashed, indicates that the endorser acted with intent to defraud the Government; and

• OIG may need to investigate the case with possible criminal prosecution if endorser fails to repay the money. For additional information regarding reporting guidelines for program violations, see GN 04111.005.

D. Reclamation period definition

When notified that the payee has died, Treasury defines the reclamation period as the period dating back 12 months to the day from the last incorrect payment issued. If SSA incorrectly issued payments for earlier months, Treasury cannot reclaim on them. We must request repayment from the endorser for these months. If the endorser refuses to pay, refer the case to the Office of the Inspector General via the e8551 (Electronic Reporting Form for Programmatic Fraud) process as outlined in GN 04111.065.

Example of reclamation period:

John Doe, a title II beneficiary, dies on March 12, 2009, but payments continue after the month of death. SSA learns of the death in June 10, 2010, terminates payments and notifies Treasury. Treasury can reclaim incorrect payments from June 10, 2010 back through June 11, 2009. Treasury cannot reclaim payments for March 12, 2009 through June 10, 2009 from the financial institution that cashed the checks. We must request repayment from the endorser.

E. PC and FO workload processing

Title II cases are processed by the PC and title XVI cases by the FO. The technician will process the workload as outlined below:

• attempt to contact the person by mail who allegedly endorsed the checks and recover the money;

• refer to OIG via the e8551 as outlined in GN 04111.010;

• remove the incorrect payments from the deceased's record;

• annotate the record to provide an audit trail;

• examine information found in the deceased’s file, on the master beneficiary record, supplemental security record, or the back of the check, and

• send out a letter to the best lead possible.

F. PC and FO requirements when developing and pursuing possible leads

Use one or more of the following suggestions to produce a lead for the possible endorser of the check(s) issued after the beneficiary or recipient dies. Whenever possible, use clues available on check photocopies and the beneficiary’s or recipient's record. If this is unproductive, contact the deceased's estate for information or assistance. For additional information on issuing notices after death, see NL 03001.001.

1. Check issued after the death of beneficiary or recipient and endorsed with the name of the deceased, spouse, another relative, or with no name at all

If the check(s) issued after the death of the beneficiary or recipient was endorsed with the deceased’s name, the spouse's name, the name of another relative of the deceased, or with no name at all (e.g., “for deposit only,” bank account number, a Social Security Number (SSN)) take the following steps:

• query beneficiary’s or recipient's record for last known address or possible lead to address of the endorser;

• review folder for this information if necessary;

• send a letter to the endorser or the deceased's estate requesting repayment or information regarding the endorser (For additional information, see NL 03001.001) and;

• control for return in 60 days.

If letter returned undeliverable:

• remove any SPA amount for title II and put an NT-TAC in the OPDR field for title XVI amounts related to payments after death; and

• annotate the MBR or SSR with the information found at GN 02401.917H in this section.

If there is a negative response (person denies any involvement or refuses to repay) refer to OIG via the e8551 as outlined in GN 04111.010.

If OIG does not pursue investigation:

• remove any SPA amount for title II,

• put an NT-TAC in the OPDR field for title XVI amounts related to payments after death, and

• annotate the MBR or SSR with the information found at GN 02401.917H in this section.

If there is no response within 60 days:

• send a follow-up letter in NL 03001.005.; and

• control for 30 days.

If there is no response to the follow-up letter or there is a negative response (person denies any involvement or refuses to repay) refer to OIG via the e8551 as outlined in GN 04111.010.

If OIG does not pursue investigation:

• remove any SPA amount for title II;

• put an NT-TAC in the OPDR field for title XVI amounts related to payments after death; and

• annotate the MBR or SSR with the information found at GN 02401.917H in this section.

2. Endorsed check contains name(s) other than the beneficiary or recipient

If the name on the photocopied check is someone other than the beneficiary, recipient or relative as explained in GN 02401.917F1, the technician should:

• query the deceased beneficiary or recipient's record for any reference of the endorser's name. If there is an address for the endorser, send a letter requesting repayment or use letter in NL 03001.001; or

  If the address is unknown, send a letter in NL 03001.001 to the beneficiary or recipient's estate at the last known address requesting any information regarding the endorser and control for 60 days;

• If there is no response within 60 days, send a follow-up letter (use NL 03001.005) and control for 30 days;

• · If there is no response to the follow-up letter or there is a negative response (i.e., person denies any involvement or refuses to repay), refer to OIG via the e8551 as outlined in GN 04111.010;

• If OIG does not pursue the investigation:

  • remove any SPA amount for title II and put an NT-TAC in the OPDR field for title XVI amounts related to payments after death; and

  • annotate the MBR or SSR with the information found at GN 02401.917H in this section; and

• If letter returned undeliverable:

  • remove any SPA amount for title II and put an NT-TAC in the OPDR field for title XVI amounts related to payments after death; and

  • annotate the MBR or SSR with the information found at GN 02401.917H in this section.

3. No information on check

When the photocopied check reveals no information as to who might have cashed the check(s):

• send a letter to beneficiary or recipient's estate at last known address requesting assistance or information concerning who might have endorsed the check(s) (For more information about the letter, see NL 03001.001; and.

• control for return in 60 days.

If letter returned undeliverable:

• remove any SPA amount for title II;

• put an NT-TAC in the OPDR field for title XVI amounts related to payments after death; and

• annotate the MBR or SSR with the information found at GN 02401.917I in this section.

If no response, refer to OIG via the e8551 as outlined in GN 04111.010.

If OIG does not pursue investigation:

• remove any SPA amount for title II;

• put an NT-TAC in the OPDR field for title XVI amounts related to payments after death; and

• annotate the MBR or SSR with the information found at GN 02401.917H in this section.

G. Procedure for repayment methods

SSA accepts repayment methods outlined in GN 02403.006 to recover incorrect payments as well as the types shown below when Treasury did not reclaim the funds.

• cash,

• check,

• credit card,

• money order,

• installment agreement; or

• payment in the form of benefit withholding only if the endorser requests it for his or her convenience.

  NOTE: SSA does not suggest or solicit withholding because incorrect payments are not legally defined overpayments.

IMPORTANT: Because incorrect payments after death are not legally defined overpayments, waivers are not appropriate.

If the endorser reaches an agreement to repay the debt, explain the repayment methods listed below to the endorser.

1. Full refund method

IMPORTANT: Do not solicit a full refund for payments after death that Treasury can reclaim. However, if the endorser wants to repay the FULL amount of the incorrect payments issued, we will accept it, but caution the endorser that there is always a possibility that the bank will reclaim the money anyway and there could be a delay in getting a refund to them. If the endorser still wants to refund the full amount, contact Treasury to abandon reclamation so that the bank will not reclaim the money.

NOTE: It is a less complicated process if Treasury reclaims for the period allowable from the bank and the endorser reimburses the bank for the reclamation amount, then refunds the amount outside the reclamation period to SSA.

To receive the refund, the technician should take the following steps:

1. accept payment by cash, check, credit card, or money order; and

2. identify the case as a limited payability death case by annotating the special message field or remarks field.

See details:

• GN 02408.302 Abandon Reclamation Request Needed on a Check

• GN 02403.006 Processing Remittances Received in the FO

• GN 02401.917H Procedure for annotating the title II and title XVI payment records

2. Installment agreement method

• For setting up an installment agreement follow Collection of Title II Overpayments by Installments in GN 02210.180, and for Title XVI procedures, see SSI Overpayments - Recovery by Refund in SI 02220.025.

  REMINDER: Accept an installment agreement ONLY for checks cashed outside the period that Treasury cannot reclaim from the bank (i.e., checks issued more than 12 months back from the date of the last incorrect check).Do not accept an installment agreement for the months in which Treasury CAN reclaim the money from the bank; namely, those checks dated within 12 months from the last incorrect check issued.

  NOTE: There is no assurance that the person will be willing to honor the agreement or be able to repay (e.g., person dies before they pay the full amount).

• If installment payments stop before we receive full recovery, send the follow-up letter found in NL 03001.005. If no response, no further recovery efforts will be made. Instead, follow instructions in GN 04111.005 for referral to OIG.

• If OIG does not pursue investigation, remove any SPA amount for title II and put an NT-TAC in the OPDR field for title XVI amounts related to payments after death and annotate the MBR or SSR with the information found at GN 02401.917H in this section.

3. Benefit withholding method

Do not solicit benefit withholding as a method of repayment from currently entitled beneficiaries or recipients (we cannot enforce “automatic” withholding of benefits because incorrect payments after death are not overpayments). However, we can use this method if the endorser requests it or asks about repayment methods. Again, this is only for the period for which Treasury cannot reclaim from the presenting bank.

If SSA receives the refund through benefit withholding and benefits terminate, send a letter requesting a refund. If there is no response, send follow-up letter. If no response, terminate recovery efforts. If a legally defined overpayment (LDO) already exists on the endorser's record, the LDO has priority for recovery.

See details:

• NL 03001.015 Claimant Has Agreement to Repay and No Longer Entitled to Benefits (Title II and XVI)

• NL 03001.020 Follow-up Notice when Claimant Has Agreement to Repay and No Longer Entitled to Benefits (Title II and XVI)

H. Procedure for annotating the title II and title XVI payment records

1. Title II special message field

Annotate the special message field of the MBR: “Limited Payability Death Case for BIC __ mm/dd/yyyy paid via CPS” (Use the date of the check that the LP credit was issued against and the payment system used to repay the check)

2. Title XVI remarks field

Annotate the Remarks field of the SSR: “Limited Payability Death Case mm/yyyy” (Use the date of the check the LP credit represents.)

REMINDER: Avoid overlaying message fields with any subsequent actions.