TN 18 (11-08)

A. Background

When a financial institution (FI) account has been inactive for a period of years, the money in the account reverts to the State. The process is known as “escheat.” The laws on escheat vary in different States.

Sometimes an FI notifies SSA that an account containing several years of SSA benefits has been inactive and has recently escheated, or will soon escheat. The FI asks us to send documentation if the agency wants to reclaim the money for the Trust Fund. Reclamation by way of an E-stop is not appropriate, unless we know the beneficiary is dead.

B. Policy when notified of escheatment

When notified of a recent or upcoming escheat involving several years of SSA benefits, attempt to recover the funds. The processing center (PC) (for Title II) or the field office (FO) (for Title XVI) lists the payments that were paid during the time covered by the escheat action and computes the total amount to be requested. The FO/PC then notifies the SSA Regional Office (RO) for the State to which the money will escheat (or has already escheated). The RO provides an opinion from the Regional Chief Counsel (RCC) as to how to proceed. When the RCC’s opinion is not currently on file, the RO asks the RCC for an opinion.

The FO/PC follows the advice of the RCC to recover the money. The FO/PC takes these actions:

• Requests the FI to return the funds to SSA;

• Requests the return of the funds from the State; or

• Sends a letter to the beneficiary’s estate, when the estate filed for and received the funds from the State after the funds escheated to the State.

The FO/PC also investigates the beneficiary’s possible death, and makes a determination of death, if applicable. When the funds are returned to SSA and the beneficiary is later determined to be alive and entitled to the funds, the FO/PC returns the money to the beneficiary.