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SI 01120: Identifying Resources

Effective Dates: 07/26/2010 - Present

TN 38 (02-06)

A. Introduction

The following instructions apply to situations where a representative payee or former representative payee returns conserved funds to SSA. This section explains when these returned funds are counted as a resource and when they are not counted as a resource. The resource determination for the returned funds depends on factors such as timeliness of the return and the intent of the payee in making the return.

B. Definitions

The following definitions apply to the instructions in this section.

1. Timely Return of Conserved Funds

For purposes of this section, funds are considered to be returned to SSA timely if they are returned within 30 days after:

  • the former or current payee receives final notice per GN 00503.130; or

  • a new payee is appointed (if no notice is sent); or

  • the individual becomes his/her own payee; or

  • another event terminates the payee relationship.

2. Temporary Retention of Returned Funds by SSA

When a former or current payee returns funds to SSA, SSA may temporarily retain such funds before reissuance if there is an indication of an overpayment or payee development is required per GN 00504.100. While it is not possible to state a specific time limit for such a retention period, the necessary development must be completed as soon as possible.

3. Voluntary Refund of an Overpayment

A voluntary refund of an overpayment occurs when the facts indicate to SSA that the payee’s purpose or intent in returning the funds was for the funds to repay an overpayment.

4. Title XVI Underpayments

Title XVI underpayments, which include any Federally-administered State supplementation payments, are benefits issued in any month after the calendar month in which they were due to be issued. For example, if an SSI benefit due for January is issued in February, it is an underpayment.

5. Title II Underpayments

Title II underpayments are payments issued in any month after the calendar month in which they were due to be issued. For example, if a Title II benefit due for January is issued in March rather than in February, it is an underpayment.

C. Policy - Conserved Funds and Change of Payee

Determining whether returned conserved funds are a resource starts with a determination of whether the funds were returned to SSA timely as defined in SI 01120.023B.1.

REMINDER: A payee remains the payee of record until the beneficiary has been afforded his or her appeal rights in the final notice or the advance notice, SSA-4164, when applicable and/or benefits have been certified to the proposed payee (See GN 00502.183B.).

1. Conserved Funds Returned to SSA Timely

If the former payee returns funds to SSA timely as defined in SI 01120.023B., the conserved funds are counted as the beneficiary’s resource while in the possession of the former payee and for the period of time SSA retains the funds prior to reissuing them. This is consistent with the general policy stated in SI 01120.022B.

2. Conserved Funds Not Returned to SSA Timely

a. Conserved Funds are a Resource

If the conserved funds are not returned to SSA timely, the conserved funds are a resource:

  • for all months the former payee is the payee of record and still holds the funds; and

  • beginning again the month after the month that SSA reissues the funds to the new payee or to the beneficiary.

NOTE: Reissued conserved funds are not income and are not an underpayment. Conserved funds may, however, be reissued in the same check with an underpayment. The 9-month underpayment resource exclusion does not apply to the conserved funds portion of the payment. The reissued conserved funds are a countable resource beginning the month after receipt following normal resource counting rules. However, any reissued conserved funds that were currently excluded underpayments continue to be excluded for the full nine consecutive months following the month of original issue.

b. Conserved Funds Are Not a Resource

If the conserved funds are not returned to SSA timely, the conserved funds are not a resource:

  • for any months the former payee is not the payee of record and still holds the funds;

    EXCEPTION: The conserved funds are a resource when SSA determines according to GN 00603.130 that the former payee may administer the funds and has notified the new payee.

  • for any months after the former payee returns the funds to SSA and SSA retains the funds before reissuing them to the new payee. For example, the beneficiary was over the SSI resource limit and SSA temporarily retains the funds to determine the periods of ineligibility and corresponding overpayments before reissuing them to the new payee.

c. Example - Conserved Funds Not Returned Timely

Situation: The Department of Social Services (DSS) served as representative payee for John Jones while he was in foster care. DSS failed to report that John’s conserved funds began to exceed the $2,000 limit in June 2002. John left foster care and a new payee was appointed in October 2002. The last check that DSS received for John’s was the October 2002 check. Because of a DSS record-keeping error, the conserved funds were not returned to SSA timely. During a routine audit in July 2003, the funds were discovered and DSS returned them to SSA in August 2003.

Analysis: The conserved funds were John’s resource in all months beginning the month that his resources began to exceed the $2,000 limit in June 2002 and ending the month that the former payee last received John’s check in October 2002. Thus, he had excess resources from June 2002 through October 2002. From November 2002 through August 2003 the conserved funds are not a resource because they were retained by DSS (not returned timely to SSA). In September 2003, SSA reissued the conserved funds to John’s new payee. The funds will be a resource as of October 2003 (the month after the month they were reissued).

D. Policy - Conserved Funds and No Payee Change

When there is no change of payee and the payee returns funds to SSA, use the following rules to determine whether the funds count as a resource.

1. Conserved Funds Are a Resource

If the payee returns funds for a reason other than as a voluntary repayment of an overpayment and no overpayment exists, the funds are a resource while held by SSA and are a resource in the month SSA reissues the funds to the payee.

NOTE: Reissued conserved funds are not income and are not an underpayment. Conserved funds may, however, be reissued in the same check with an underpayment. The 9-month underpayment resource exclusion does not apply to the conserved funds portion of the payment. The reissued conserved funds are a countable resource beginning the month after receipt following normal resource counting rules.

2. Conserved Funds are Not a Resource

Conserved funds are not a resource if:

  • the payee did intend the return of the conserved funds to be a voluntary repayment of an overpayment. The conserved funds are not a resource after being returned to SSA. Any conserved funds subsequently reissued to the payee because they exceeded the unpaid balance of the overpayment are a resource beginning the month after they are reissued; or

  • the payee did not intend the return of funds to be a voluntary repayment, but SSA temporarily retains the funds because the individual was over the resource limit. The funds are not a resource after being returned to SSA. Any funds subsequently reissued to the payee because they exceeded the unpaid balance of the overpayment are a resource beginning the month after they are reissued.

3. Example - Conserved Funds Returned Due to Overpayment

Situation: Suzanne Smith has been in foster care since 2000. Each month her SSI payment exceeds her current needs so that her conserved funds exceed the $2,000 resource limit in June 2002. Her payee, the Department of Social Services (DSS), fails to report the excess resources. The excess amount is discovered in a March 2003 audit and in April 2003 DSS returns all of the conserved funds in excess of $2,000 because DSS believed Suzanne was overpaid.

Analysis: The conserved funds are Suzanne’s resources through April 2003. When the funds over $2,000 are returned to SSA they are no longer her resources because her payee intended them as a voluntary repayment of the overpayment caused by excess resources. The $2,000 retained by DSS continues to be her resource. SSA will compute the overpayment and offset the overpayment with the returned funds. If the amount of returned funds exceeds the overpayment, the remaining funds must be reissued to the payee and will be Suzanne’s resource as of the first of the next month.

E. References

SI 01120.022, Conserved Funds when the Payee Changes

SI 01130.600, Exclusion of Retroactive Title II and XVI Payments

GN 00503.130, Notice to Former Payee

GN 00504.100, Determining the Need for Successor Payee

GN 00603.130, When Former Payee May Administer Conserved Funds

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SI 01110: Resources, General
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SI 01130: Resources Exclusions
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