TN 18 (11-08)

A. Background

Generally, checks that are issued after death are returned in the mail or brought into the servicing field office; however, sometimes these checks are not returned and remain outstanding. In Titles II and XVI, when a death input is transmitted to the Master Beneficiary Record (MBR) or Supplemental Security Income Record (SSR), the system generates an E-stop for each check issued after the posted date of death, unless the E-stop must be input manually (see Manual E-Stop Process GN 02408.012).

The E-stop alerts the Department of the Treasury (DT) of the non-entitlement of the payment due to death and identifies the payment in question. DT investigates the status of the check and provides SSA with a disposition code indicating whether the check remains outstanding or has been cashed (see Treasury RFC and CSD Disposition Codes SM 00609.610 and How to Respond to Treasury Process Messages SM 01315.200).

If a check has been cashed, DT reclaims the funds from the presenting financial institution (FI) based on the E-stop (see Check Reclamation – Titles II and XVI, GN 02408.301). If the check has not been cashed or returned, the E-stop prompts DT to cancel the check and return credit to SSA. If the check is subsequently cashed, it is detected with DT’s Check Operations Re-engineering Effort (CORE) system at the Richmond Federal Reserve Bank (RFRB) and returned unpaid to the presenting FI (GN 02408.006).

E-stops are not automatically generated, and should not be input manually, on check payments made to a representative payee after the death of the beneficiary. These payments after death are processed as overpayments made to the representative payee (see GN 02201.000).

IMPORTANT: It is important for SSA to post the date of death promptly, as DT can only reclaim check payments going back 12 months from the date that SSA learns of the death (see GN 02408.005B.5. in this section). For Limited Payability Death Cases, see GN 02401.917.

B. Process for Titles II and XVI

1. E-Stop due to the death of the beneficiary or recipient with no representative payee involved

When the date of death is input to the deceased’s record, an E-stop is automatically generated for each check issued after the date of death to which the beneficiary or recipient was not entitled (incorrect payment). (For systems exclusions and when E-stops must be input manually, see GN 02408.012.)

E-stops:

• identify checks issued after the death of the beneficiary/recipient;

• enable DT to reclaim funds for checks that are fraudulently cashed after the death of the beneficiary or recipient; and

• enable RFRB to deny payment for checks that are cashed after the beneficiary/recipient’s death by using the CORE process (see GN 02408.006).

NOTE: E-stops, W-stops, and reclamations do not apply if SSA is notified of a death prior to the processing cutoff date because the death can be input in time to prevent incorrect payments from being issued.

2. F-stop due to the death of the beneficiary or recipient who has a representative payee involved

Input F-stops for checks issued to a representative payee after the death of the beneficiary or recipient (see GN 02408.007). When negotiated, these checks issued after death are not considered "incorrect payments”; they are overpayments to the representative payee and are collected accordingly (see General Information - Overpayments Table of Contents GN 02201.000).

Although the date of the beneficiary's or recipient's death is input on his or her record, and checks may go out after the date of death, an automated E-stop does not post to those payments when a representative payee is on the record.

NOTE: E-stops are only input to collect incorrect payments. E-stops should NEVER be used to collect an overpayment because overpayments require due process. Therefore, manual E-stops should not be input on any payments issued to a representative payee after the death of a beneficiary.

3. F-Stop due to death of the representative payee in Title XVI cases only

The Title XVI system no longer has a specific stop code for this category; the "R" that was formerly used is no longer accepted by Treasury. Therefore, use the F-stop for checks that are issued after the representative payee’s death. This prompts DT to return credit for the uncashed checks so they can be reissued to the new representative payee.

F-stops (in this context):

• identify checks issued after the death of the representative payee;

• return credit for uncashed checks;

• result in a check claims package for checks cashed after a representative payee's death; and

• enable DT to reclaim funds for checks that are fraudulently cashed after the death of the representative payee.

4. W-Stop due to death of the representative payee in Title II cases only

When SSA learns of the death of the representative payee in a Title II case, input a W-stop on each payment issued after the date of death. W-stops post to the Payment History Update System (PHUS) as E-stops and E-stops are sent to DT.

W-stops:

• identify checks issued after the death of the representative payee;

• enable DT to reclaim funds for checks that are fraudulently cashed after the death of the representative payee; and

• enable the Richmond Federal Reserve Bank (RFRB) to deny payment for checks that are cashed after the representative payee’s death by using the Check Operations Re-Engineering Effort (CORE) process (see GN 02408.006).

5. Late notification of death and the 12-month limit

Due to various reasons, SSA may receive a late notification of death. One situation that often presents a problem is when the death occurred more than 12 months in the past. DT can only reclaim for checks issued within 12 months back from the date that SSA learns of the death.

EXAMPLE: The beneficiary dies on January 15, 2001, but SSA is not notified until June 16, 2008, at which time the date of death is input in the system. DT can only reclaim back to July 3, 2007 (June benefit). The improper check payments issued from January 16, 2001 to June 3, 2007 (May 2007 benefit) are not reclaimable. For Limited Payability Death Cases, see GN 02401.917.

6. Erroneous day of death and correct day of death are within the same month

If the wrong day of death is reported and it is within the same month of death, transmitting the correct day may not always involve a payment correction. (For Title XVI, see Systems Processing of Subsequent Reports of Death, SM 01301.378 and for Title II, see Correction of Date of Death on the MBR, SM 00706.075.)

7. Erroneous day of death and correct day of death are in different months

Sometimes a date of death is input incorrectly in a different month from the month of death, causing stop-payments to be put on checks to which the beneficiary/recipient was actually entitled.

EXAMPLE: A beneficiary died in March but the date of death was input as January. The beneficiary was actually entitled to the checks issued in February and March. To correct this problem, correct the date of death, then request abandon reclamation for the checks issued in February and March. Use the abandon reclamation request form found at GN 02408.302. Use the abandon reclamation request whether the funds have already been reclaimed from the FI or not.

IMPORTANT: Sometimes SSA is contacted by an FI requesting that we return funds collected by reclamation in error. DT prefers that SSA use the abandon reclamation process rather than settling with the FI ourselves. The abandon reclamation process allows the money to flow back to the FI the same way it was collected so both agencies do not perform the same work. See Abandon Reclamation – Checks, GN 02408.302C.

8. Early delivery date and payment is due

Do not use a stop-payment when the payment is an early delivery payment and the beneficiary or recipient died on the early delivery date because the payment is due. For special overpayment situations, see GN 02201.007E.2.

In Title XVI cases, when a date of death is equal to an early delivery payment date, an incorrect overpayment is computed. The overpayment is incorrect and should be annotated as an incorrect overpayment (see SM 01311.340).

EXAMPLE 1: The March 2008 SSI payments were issued 02/29/08 (03/01/08 was a Saturday and 03/02/08 was a Sunday). If the SSI recipient was alive as of 12:01 a.m. on 02/29/08 but died later that day, the recipient was due the payment issued even though the payment was for 03/01/08. Assume that the recipient died after payment was received. Annotate the overpayment as an incorrect overpayment.

EXAMPLE 2: Title II payments for April 2008, must be delivered on 05/02/08 because 05/03/08 is a Saturday. If the Title II beneficiary is alive as of 12:01 a.m. on 05/01/08 but dies later that day, the beneficiary is due the payment even though the payment was dated 05/03/08.

C. Policy for check payments issued after death that are not due

For Title II, a payment for the month of death or later is not due and must be reclaimed. For Title XVI, a payment for any month later than the month of death is not due and must be reclaimed. For early delivery date policy, see GN 02408.005B.8 in this section.