TN 49 (05-04)

Citations:

Soc. Sec. Act as amended in 1996, Sec. 1613(a)(12) and Sec. 1631(a)(2)(F);
P.L. 104-193., Sec. 213.

A. Background

1. Mandatory accounts

Section 213 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, P.L. 104-193, enacted August 22, 1996, requires that when an eligible individual under age 18 is eligible for past-due Supplemental Security Income (SSI) monthly benefits (including any Federally administered State Supplement (OSS)) which, after any withholding for reimbursement of interim assistance (IAR), exceeds the sum of 6 times the FBR plus OSS the representative payee must establish a dedicated account in a financial institution into which the past-due benefits will be paid. Subsequent amounts of past-due benefits that exceed this amount must also be paid into this account.

2. Optional deposits

After a dedicated account has been established, subsequent past-due benefits that are less than or equal to the amount described in SI 01130.601A.1. may be, but are not required to be, deposited in the account. Any other subsequent underpayment, that does not meet the definition of a past-due benefit, that equals or exceeds 1 times the FBR, but is less than or equal to 6 times the FBR and OSS may be deposited, at the option of the representative payee, in the established dedicated account.

B. Definition

1. Dedicated account

For purposes of this provision, a dedicated account is an account in a financial institution, the sole purpose of which is to receive and maintain SSI past-due benefits which are required or allowed to be paid into such an account and the use of which is restricted by section 1631(a)(2)(F) of the Social Security Act. Funds other than those described in SI 01130.601A.1. and SI 01130.601A.2. may not be deposited into a dedicated account. See GN 00603.025 for dedicated account requirements, and GN 00603.020 for information regarding collective savings and checking accounts. For example, title II benefits of any kind, title XVI recurring monthly payments, title XVI underpayments less than 1 times the FBR, etc., may not be deposited into a dedicated account.

2. Past-due benefits

Past-due benefits are:

1. benefits due but unpaid which accrue prior to the month payment was effectuated;

2. benefits due but unpaid which accrue during a period of suspension for which the recipient was subsequently determined to have been eligible; and

3. any adjustment to benefits which results in an accrual of unpaid benefits.

C. Policy - Exclusions

1. Resources

Past-due benefits and other underpayments of the type described in SI 01130.601A.1. and SI 01130.601A.2. deposited into a dedicated financial institution account and any accrued interest or other earnings on such an account are excluded from resources. For any month that funds other than accrued interest or other earnings on the account are commingled in this account, the exclusion does not apply to any funds in the account.

EXCEPTION: Funds, other than past-due benefits, required by a financial institution to open the dedicated account may be commingled in the account, but only until the end of the month following the month that the past-due benefits are paid. (See SI 01130.601D.2. for an example.) However, these funds other than past-due benefits in the account are not excluded from resources.

2. Interest and other earnings

Interest and other earnings (e.g., dividends) earned on and left to accrue in the excluded dedicated account are excluded from income and resources.

3. Exclusion during a period of suspension or termination

• Restrictions on the use of funds in a dedicated account continue to apply during a period of suspension (e.g., S06), non-pay (e.g., N04), and eligibility but no payment (E01). The exclusion from resources of the funds in the account continues to apply during a period of suspension, non-pay, or eligibility but no payment, prior to termination (i.e,, the 12 months prior to PSY T31).

• Once an individual's eligibility has been terminated (e.g., T31), the exclusion of the funds in a dedicated account cannot be carried over if the individual establishes a new period of eligibility by filing a new application for SSI. Reopening of a prior period of eligibility following termination is not a new period of eligibility and, therefore, the exclusion may be reapplied. Any remaining funds are a countable resource.

4. 9-Month exclusion of underpayments from resources

When an individual receives past-due benefits that may be, but have not yet been, deposited into a dedicated account (i.e., meets the requirements in SI 01130.601A.2.), the exclusion in SI 01130.600 applies for the lesser of 9 months or until the payee deposits the payment into the dedicated account.

5. Restrictions on the use of funds

See GN 00602.140 for a list of the restricted uses that apply to the funds in a dedicated account.

D. Procedure

1. Verify file records

The payee must provide the following information in order for a payment to be released into a required dedicated account. Verify, using the individual's records, that the following information is correct in the file:

• name and address of financial institution;

• account number;

• account title;

• type of account; and

• amount of money in the account.

Make an entry in the REMARKS field (R1 - R5) of the SSR per SI 01130.601D.4. or verify the accuracy of the existing entry and update as necessary.

2. Funds used to open a dedicated account

If a payee, after being informed of the requirement to establish a dedicated account for the receipt of past-due benefits, is required by the financial institution to use other funds to open an account, issue the manual notice per SI 02101.010E.2. (the payment notice) to inform the payee that he/she must withdraw the other funds used to open the account before the end of the month following the month that the past-due benefits are paid.

NOTE: If the individual is blind or visually impaired, see instructions at NL 01001.010 for more information on the special blind or visually impaired notice options.

EXAMPLE: A payee receives the notice requiring establishment of a dedicated account on September 1. He visits a local bank and is told that a minimum deposit of $50 is required to open a new account. He deposits $50 and establishes the dedicated account. He reports the account information to the local FO. If the FO releases the payment on September 25th, the $50 used to open the account must be withdrawn before the end of October because it is not part of the past-due benefit amount and cannot be excluded.

3. Optional deposits

If, after receiving subsequent underpayments along with the appropriate notice, a payee reports that he/she made an optional deposit to the dedicated account, verify from the individual's records the amount and date of the deposit. Verify that the deposit exceeds one time the FBR. Revise the REMARKS field entry on the SSR per SI 01130.601D.4.

4. Make REMARKS field (R1 - R5) input

Enter “Dedicated Account, $,$$$$, MMYY” in the REMARKS field (R1 - R5) of the SSR where $$$$$represents the amount of funds in the account and MMYY is the month and year of the most recent reported balance.

NOTE: You may also record the account number, bank name and other pertinent information as space allows.

5. MSSICS screens

Enter information about the dedicated account on the Financial Institution Accounts (RFIA) page. Specify the type of account (e.g. Checking, Savings, etc) and select the “Dedicated account” checkbox to code the account as a dedicated account. Select “Dedicated account funds” as the exclusion reason.

E. References

• Dedicated Account Requirements, GN 00603.025

• Payment of Past-Due Benefits to Dedicated Accounts,
  SI 02101.010

• Expenditures From a Dedicated Account, GN 00602.140

• Misapplication of Funds in a Dedicated Account, SI 02220.060