GN 02408.006: Title II and Title XVI Check Operations Re-Engineering Effort (CORE)

changes
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~~Effective Dates: 01/14/2016 - Present~~
Effective Dates: 01/09/2018 - Present
TN 18 (11-08)
GN 02408.006 Title II and Title XVI Check Operations Re-Engineering Effort (CORE)
A. Background
Effective May 15, 2000, the Department of the Treasury (DT), in cooperation with the Richmond Federal Reserve Bank (RFRB) in Richmond, Virginia, implemented the CORE process for deceased payee reclamations. CORE reduces payment over-cancellations for checks cashed after the death of the beneficiary/recipient or death of the representative payee. CORE also eliminates the need for reclamation of checks cashed after a beneficiary's or recipient's death.
B. CORE process for checks cashed after death
The CORE process acts as a true stop-payment and enables the RFRB to deny payment to a financial institution (FI) that cashes a check after the death of the beneficiary, recipient, or representative payee. Prior to the implementation of CORE, if the check was cashed, it caused a payment over-cancellation and was recovered by reclamation (see Payment Over-Cancellation (POC)/Credit Reversal GN 02406.245).
The Bureau of the Fiscal Service (Fiscal Service) sends a daily file containing death information to the RFRB when we advise (Fiscal Service) that the payee is deceased (through the death input and subsequent E-stops generated) and is not due any payments issued after death. The information is matched against checks sent to the RFRB for payment. When there is a match, the check is stamped, "Not Negotiable, Payee Deceased/Not Entitled, Questions—Contact Authorizing Agency." DT cancels the check and returns it to the FI unpaid. DT then returns a credit for the amount of the check to SSA. FIs have instructions to give the non-negotiable check back to the individual who cashed it and resolve any problems that may have resulted from the transaction with that individual. The matter is now between the FI and the person who cashed the check—not SSA. The FI may take additional steps to recover the funds, such as debiting the person’s account.
EXCEPTION: If a check issued after the death of a beneficiary or recipient is cashed before SSA is aware of the death (late notification of death), the CORE process cannot prevent these checks from being paid.
C. CORE process for erroneous death terminations
If an incorrect date of death is input to a Title II or XVI record, E-stops are to be placed on each check issued after the (incorrect) date of death (unless there is a representative payee--see GN 02408.005B.2). The CORE process flags those checks as non-negotiable and does not return payment for them. Therefore, PCs and FOs must take corrective action to reinstate the terminated record and to prevent the release of underpayments.
When an erroneous death is transmitted, the following occurs:
* Title II and/or XVI record is terminated based on the death data transmitted;
* The beneficiary, recipient, or representative payee presents the check to the bank and receives payment;
* CORE handles the E-stop as if the death actually occurred;
* The financial institution presents the check to the RFRB and is denied payment based on the death data transmitted through CORE;
* Although the beneficiary, recipient, or representative payee received payment, the CORE process denies payment to the presenting bank; and
* DT returns credit to SSA
When SSA learns of the erroneous death and takes action to resurrect the terminated record, an underpayment is generated to the new record. The system detects a credit for the month of termination. Because the FI should be reimbursed, do not release the underpayment to the beneficiary, recipient, or representative payee who has already received the payment.
D. CORE process for correcting erroneous death situations
1. Title II
The beneficiary's LAF code is T1 because of an erroneous death termination. The FO should follow procedures to reinstate the beneficiary's payment record, prevent an underpayment check from being issued, if appropriate, or prevent the returned credit from being applied to an existing overpayment, as well as reimburse the FI that is out the money. The FI usually contacts SSA concerning the funds. SSA does not know which FI is reclaimed against.
One of two scenarios may occur with an erroneous death termination:
a. Scenario One
The beneficiary cashes the check and gets his or her money. Under the CORE process, the RFRB returns the check unpaid to the FI that cashed the check. DT returns the credit to SSA.
* Obtain proof of identity from the claimant/caller and verify that all development for the erroneous death termination is completed per GN 02602.055;
* Look on PHUS for EVENT CODE 070 to ensure credit has been returned (CDAMT - $$$$$ cc and TDSC-32—check outstanding—because the FRB returned it to the presenting FI unpaid). Do not issue a payment via CPS. The beneficiary has received the proceeds of the check in question and is whole.
* The FI is due an underpayment. When the FI address is received, pay an underpayment via the Single Payment System (SPS).
b. Scenario Two
The beneficiary cashes the check and gets his or her money. The RFRB returns the check unpaid to the presenting FI. When the FI receives the physical check back from the FRB stamped non-negotiable, they may debit the account of the beneficiary causing bounced checks, etc. In this situation, issue a Critical Payment System (CPS) payment to the beneficiary.
* Obtain proof of identity from the claimant/caller and verify that all development for the erroneous death termination is completed per GN 02602.055;
* Look on PHUS for EVENT CODE 070 to ensure credit has been returned (CDAMT - $$$$$.cc and TDSC-32—check outstanding—because the FRB returned it to the presenting bank unpaid).
* Verify the bank debited the account of the beneficiary.
* ISSUE A PAYMENT VIA CPS for the amount of the check. The beneficiary received the proceeds of the check in question but the FI reclaimed the money from the account; therefore, the beneficiary needs to be made whole.
IMPORTANT: Although penalties or overdraft fees may be assessed to the account because of insufficient funds, we have no mechanism for paying these fees. Often the bank waives the fees if we call and explain what happened.
2. Title XVI
The recipient is in T01 status because of an erroneous death termination. The objective is to resurrect the recipient's record but NOT let the system issue an underpayment check to the recipient when the credit is returned from the RFRB.
NOTE: The system may apply a returned credit to an existing overpayment if the underpayment is not held. This amount must be adjusted. The recipient already has his or her money. SSA needs to reimburse the FI or business that cashed the check by special voucher procedures. See Special Voucher Payments SM 01315.143.
Depending upon what the SSR shows for the payment, take the following action:
If there is an
"S" in pay flag 3
* The “S” indicates Treasury has returned the credit to SSA
* Obtain proof of identity from the recipient/caller and verify that all development for the erroneous death termination is completed per GN 02602.055;
* Contact the Division of Benefit Certification & System Analysis (DBCSA) at (410) 966-8805. DBCSA overlays the "S" with a "U."
* After the "U" posts to the record for that payment, DBCSA issues a special voucher payment to the party (FI, check cashing establishment, etc.) who is owed the money.
* Contact the Treasury Operations Branch (TOB) at (410) 966-9982. TOB overlays the "S" with a "U."
* After the "U" posts to the record for that payment, TOB issues a special voucher payment to the party (FI, check cashing establishment, etc.) who is owed the money.
* To reinstate SSI benefits, see SI 02301.255.
If there is no
"S" in pay flag 3
* Obtain proof of identity from the recipient/caller
* Before resurrecting the case, the FO should input a P-TAC for an amount equal to the amount paid in the month of the erroneous death input to establish an overpayment.
* Post a notice date for the overpayment more than 65 days in the past and post a D-TAC to prevent the underpayment from being released.
* To reinstate SSI benefits, see GN 02602.055.
* Contact DBCSA and request they issue a special voucher payment to the party that is owed the money (see How to Request a Special Voucher Payment SM 01315.143).
* Contact TOB and request they issue a special voucher payment to the party that is owed the money (see How to Request a Special Voucher Payment SM 01315.143).
* The P TAC remains on the SSR to balance the credit caused by the erroneous death termination.
E. References
* GN 02602.055 Erroneous Death Termination
* GN 02602.055 If an Individual Deceased on SSA Records is Alive
* GN 02602.054 Erroneous Suspensions-Unverified Returned Payments for Death – Title II
* SM 01301.376 Automated Death Processing
* SM 00706.075 Correction of Date of Death on Master Beneficiary Record (MBR)
* SM 01301.378 Systems Processing of Subsequent Reports of Death

POMS Reference

GN 02408.006: Title II and Title XVI Check Operations Re-Engineering Effort (CORE)