TN 18 (11-08)

A. Background

Check reclamation is the Department of the Treasury’s (DT) process for requesting the return of funds from a financial institution (FI) when the FI has honored a benefit check that was either cashed over a forged signature or was not due. DT reclaims the funds from the FI and returns the credit to SSA. For the electronic funds transfer (EFT) reclamation procedure, see GN 02408.610.

B. Process for check reclamation

1. Death of the beneficiary/recipient with no representative payee (forgery)

• Check payments issued after the death of the beneficiary/recipient are incorrect payments that are not due except in some situations of a PMA payment (Title II) or underpayment/type-2 payment (Title XVI).

• In PMA or underpayment/type-2 situations, the deceased may be entitled to a portion or all of the payment being reclaimed. Eligible family members may apply for those funds.

• When the date of death is input into the Title II or Title XVI system, an E-stop (reclamation request) is transmitted for each check issued after the date of death.

• If the death information reaches the Richmond Federal Reserve Bank (RFRB) before the check(s) was cashed, the Check Operations Re-engineering Effort (CORE) system prevents the check from being paid and reclamation is not necessary (GN 02408.006).

• If the death of the beneficiary/recipient is unknown at the time the check(s) is cashed, the death information will not have reached the Richmond FRB for the CORE process to work. Therefore, DT reclaims the funds from the FI that honored the check because it was obviously a forgery since the beneficiary/recipient is deceased.

SEE ALSO:

• GN 02301.050- Applications - Underpaid Person Deceased

• GN 02301.500 - SSA-1724, Claim for Amounts Due in the Case of a Deceased Beneficiary

• SI 02101.003 - SSI Underpayment Due - Individual Deceased - General

2. Nonreceipt/Forgery

In nonreceipt/forgery situations when the beneficiary/recipient/payee does not recognize the signature as his or her own and DT determines that forgery is involved, DT reclaims the money from the presenting FI and returns the credit to SSA. (For nonreceipt policy, see GN 02406.000)

C. Policy for check reclamation periods

1. Death cases

DT can only reclaim checks issued in the last 12 months; i.e., dating back 12 months from the month that SSA learned of the death.

EXAMPLE: If the beneficiary died 24 months prior to SSA learning of the death and check payments had continued to be sent out and negotiated, DT would only be able to reclaim the 12 latest checks cashed after the death. DT cannot reclaim on checks cashed before that time period. Recovery attempts are left to SSA. (See GN 02401.901 – GN 02401.920 – Limited Payability.)

2. Forgery and nonreceipt cases

DT has 18 months to reclaim money paid over a forged signature in nonreceipt/forgery cases. This does not change the requirement that nonreceipt must be alleged within 12 months of the date of the missing check. By sending the claim to DT, we ensure that DT is able to reclaim the funds if a forgery exists. With that in mind, DT can accept the nonreceipt input into the 13^th month (but the actual "allegation" has to be timely, i.e., within 12 months of the date of the check). Sometimes delays occur due to the timing of the allegation or an administrative error on SSA’s part. It is possible for DT to act on a claim received after the 13^th month, but we must ask DT to input the stop because the action rejects in SSA systems due to limited payability. The RO (for Title XVI) and PC (for Title II) contact DT’s Check Claims Branch (CCB) for 13^th month input requests.

NOTE: For timely allegations of nonreceipt that are sent to DT in the 13th month, watch for the disposition code to make sure it processed correctly. This may require assistance from DT’s Check Claims Branch (CCB) if it rejects.