TN 9 (04-04)

A. Introduction

As explained in RS 00601.122, a special adjustment in July 2001 corrected an error in the 12/99 COLA amount. All records in pay at that time were corrected beginning with the 7/01 rates. Special payments were made to make up for any shortfall in benefits for months from 12/99 through 6/01. Awards processed after the July 2001 correction have been paid correctly for all months from 7/01 and later. However, any beneficiary who would have been affected by the 12/99 COLA may be due a special one-time payment to make up for the shortfall for months from 12/99 through 6/01. This section explains how to determine eligibility to the payment and how to compute and make the payment.

B. How to Determine if a Special One-time Payment Has Been Made

To determine if a one-time payment has been paid (or considered) by the automated run on 6/22/01, refer to the MBR and the PHUS. SM 00510.524 explains information that will be displayed on the MBR if the one-time payment was already made (or considered) by the system as part of the July 2001 automated run. The PHUS record will show a PHUS event of 042 with event code 199 for 1999 or event code 200 for 2001.

NOTE: Any beneficiary who already received a special CPI one time payment on another record will not receive another CPI payment, even if later they become entitled to retroactive payments prior to and including December 1999.

C. Procedure – Making the Special One-time Payment

If the award was processed after 6/22/01 and the eligibility year is before 2000 a one-time payment may be due. To see if a beneficiary is eligible for the one-time payment follow these steps:

1. Eligibility Year

Is the Eligibility Year (ELY) on the MBR for the beneficiary 1999 or earlier? (ELY prior to 2000)

If No - the beneficiary is not due the one-time payment - STOP HERE

If Yes - Go to Step #2 to determine eligibility to the one-time payment.

2. Special One-Time Payment For 2000

Is the beneficiary due, or did the beneficiary receive a payment for at least one month from 12/99 – 11/00? (Review 12/99 - 11/00 months in the HISTORY field on the MBR or 01/00-12/00 Effective Tax Date (ETD) in PHUS history.)

If No - the beneficiary is not due a one-time payment based on 2000. Go to Step #3 to determine eligibility for a one-time payment based on 2001.

If Yes - the beneficiary is entitled to a one-time payment for 2000 of $12/$24/$36/$48. Use the following chart to find the amount of his/her one-time payment for 2000. The chart is based on the 11/99 PIA. It does not matter how many months in 2000 the beneficiary was paid for, he/she will receive a fixed rate of $12, $24, $36 or $48 based solely on the PIA amount. Do not issue the payment until you determine whether a one-time payment for 2001 is also due. Go to Step #3 to determine if the payment for 2001 is needed.

3. Special One-Time Payment For 2001

Does the 07/01 COLA increase the beneficiary’s Monthly Benefit Credited (MBC) by at least $1 AND is the beneficiary due, or did the beneficiary receive a payment in at least one month from 12/00 – 06/01? (Review 12/00 – 06/01 months in the HISTORY field on the MBR or 01/01-07/01 Effective Tax Date (ETD) in PHUS history.)

If No to either question, the beneficiary is not due a one-time payment based on 2001.

If Step #2 above determined a one-time payment is due for 2000 go to Step #4 for payment issuance rules

If Step #2 above determined no one-time payment was due for 2000, document the Special Message Field on the MBR to show the one-time payment was considered and why it was not due. – STOP HERE

If Yes to both questions, the beneficiary is due a one-time payment based on 2001. The amount payable is determined by taking the difference between the MBC for 06/2001 and 07/2001. Truncate at the decimal (drop the cents) and multiply by seven. Again, it does not matter how many months the beneficiary was paid during the period 12/00 – 06-01, the difference between the 06/01 and 07/01 benefits is always multiplied by seven. This will result in payments of $7, $14, or $21. Add this amount to any amount determined in Step #2. Go to Step #4 to determine if this one-time payment can be issued.

4. LAF Status

Is the beneficiary in any one of these LAF statuses? LAF: E, S0, S6, S7 (RFST=PRISON or MENTAL), S8, S9 (RFST=WHEREU), SJ, SK, SL, TA, T&, X1 or XK.

If No, go to Step #5

If Yes, the beneficiary's one-time payment cannot be issued. Document the Special Message Field on the MBR to show that the payment can only be issued after the LAF code no longer reflects any of these statuses.

5. LAF Status of T1

Is the LAF Status equal to T1?

If No, the beneficiary's one-time payment can be issued. This payment must be issued by the PSC as a one check only A-. Go to RS 00601.123D. and RS 00601.123E. for documentation and notice instructions.

If Yes, the beneficiary's one-time payment can be computed but not issued. Document the Special Message Field on the MBR to show that the payment can be made after the applicant for the underpayment completes an SSA-1724 using normal underpayment procedures. – STOP HERE.

D. Procedure - How to Document the Payment Action

Use the Special Message Field on the MBR to document the date and amount of the special one-time Payment. Establish a corresponding PHUS event (event 042 for OCO A - with event 199 for 2000 or event 200 for 2001). Remember that the PHUS record must show that money was paid to the beneficiary for the particular year in question.

NOTE: If the CPI is paid through SPS, the PHUS event 042 is automatically built to the MBR

E. Procedure - How to Notify the Beneficiary

Use the following language to explain the reason for the special one-time payment. This paragraph is available on AURORA with a UTI of COL006.

“You are entitled to a special, one-time Social Security benefit. Each year, you get a cost-of-living increase in your Social Security benefits. This increase is based on the consumer price index, or CPI. The CPI is the government’s measure of the rate of inflation. In 1999, there was an error in how the CPI was figured. Because of this, Congress passed a law that allows us to make special payments to compensate for the shortfall. Payments for July 2001 and later have been paid correctly. This special payment is for the additional benefits you would have received for December 1999 through June 2001 if the CPI error had not occurred.”