TN 3 (09-17)

A. How do we discover underpayments

SSA’s systems detect most underpayments due a living beneficiary.

If the system cannot process an underpayment, the office that detects the underpayment issues the payment and notice.

B. Procedure for issuing the underpayment

When issuing an underpayment, remember:

• A living beneficiary does not need to request payment of an underpayment they are due.

• Issue the underpayment with any amount currently payable or in a separate payment if we are not releasing any other payment at that time.

• Issue the underpayment by direct deposit, if available. If the beneficiary or representative payee, if any, does not have direct deposit, issue the underpayment by check.

• If the underpaid beneficiary also has an overpayment, we may withhold part or all of the underpayment to recover the overpayment. For policy on adjustment of underpayments for an overpaid beneficiary, see GN 02210.006.

NOTE: If the United States Postal Service (USPS) returns an underpayment check of $50.00 or more as “undeliverable as addressed,” develop for a current address. If USPS returns an underpayment check of less than $50.00 as “undeliverable as addressed,” or if we are unable to obtain the current address for an underpayment of $50.00 or more, the benefit authorizer (BA) posts the underpayment to the Special Payment Amount (SPA) field of the Master Benefit Record (MBR). Annotate the Special Message field on the MBR to state, “Underpayment posted to SPA - unable to locate.” Take no further action unless SSA receives a request for payment of the underpayment from an eligible recipient. For undeliverable mail development policy, see GN 02605.055.

1. When the beneficiary is in current pay status

Issue an underpayment to a beneficiary in current pay status using current MBR information:

• Issue the underpayment directly to the beneficiary.

• If the beneficiary has a representative payee, issue the underpayment to the payee on behalf of the beneficiary. See GN 02301.020C.

2. When the beneficiary is terminated or in suspense status

Issuing an underpayment to a beneficiary in terminated or suspense status requires development:

• If the beneficiary in terminated or suspense status is not a minor or incompetent, and there is no indication that the beneficiary needs a representative payee, contact the beneficiary directly to determine a current address and bank data for direct deposit (if available). Verify the identity of the individual per GN 00203.020A.2, before releasing the underpayment. Issue the underpayment directly to the beneficiary. If you are unable to contact the underpaid beneficiary, develop using undeliverable mail guidelines per GN 02605.055. If you are still unable to obtain an address for the beneficiary, consider them “whereabouts unknown.” Follow policy for whereabouts unknown at GN 02602.320.

• If the beneficiary in terminated or suspense status requires a representative payee, issue payment to the appropriate payee via check or direct deposit (if available) after completing the proper development as listed in GN 02301.020C. in this section.

• If the beneficiary is in suspense status for address development, representative payee development, or whereabouts unknown, complete required development before we pay the underpayment. If you are unable to obtain an address for the beneficiary, consider them “whereabouts unknown.” Follow policy for whereabouts unknown at GN 02602.320.

NOTE: Effective December 15, 2009, the Social Security Act prohibits paying any retroactive benefits, including underpayments, to beneficiaries or terminated beneficiaries while they are prisoners, fugitive felons, or probation or parole violators (when the arrest warrant offense code is 4901, 4902, 4999, 5011, 5012, 8101, or 8102). This prohibition also applies to retroactive payments due to members of the Martinez court settlement who are currently prisoners, fugitives, or probation or parole violators. For terms of the Martinez court settlement, see GN 02613.860B.1.

SSA must hold retroactive benefits until the beneficiary contacts SSA and provides proof that they are no longer a prisoner, fugitive felon, or a probation or parole violator.

C. Procedure for issuing the underpayment if the beneficiary has a representative payee

If the beneficiary is in current pay status, pay the underpayment to the beneficiary’s representative payee on behalf of the beneficiary.

If the beneficiary is in suspense or terminated status:

• If the period of nonpayment of benefits is less than 3 consecutive months, assume the current payee remains qualified unless there is evidence to the contrary. Follow instructions for payment after a period of nonpayment at GN 00504.160B.1 and GN 00504.160C.

• If the period of nonpayment of benefits is 3 months or more, do not make payments until you have completed representative payee development. Follow instructions for payment after a period of nonpayment for a period of 3 months or more at GN 00504.160B.2 and GN 00504.160C.

• Scan all documentation into the Non-Disability Repository for Evidentiary Documents (NDRed) per GN 00203.020A.2.a.