TN 15 (06-16)

A. Introduction

Effective for past-due SSI payments issued on May 22, 2006 or later, section 7502 of the Deficit Reduction Act of 2005, (P.L. 109-171), enacted February 8, 2006, changes the installment formula for SSI past-due payments. This section describes when we must issue the past-due payments by installments.

B. Policy - installment payments

Amounts (including any federally administered State supplement) subject to the installment payment requirement include:

• payments due but unpaid that accrued prior to the month payment was effectuated;

• payments due but unpaid that accrued during a period of suspension for which the recipient was subsequently determined to have been eligible; and

• any adjustment to the record that results in an accrual of unreleased payments.

1. Installment Payment requirements

The installment payment requirement applies when a recipient (or eligible couple) is eligible for past-due SSI in an amount that equals or exceeds:

• three times the current maximum individual FBR (after reimbursement for interim assistance (IA) or direct payment of representative fees), plus

• the recipient’s (or eligible couple's) current federally administered State supplement.

In applying this formula, we subtract any overpayments or penalties that we withhold from the past-due SSI payments. For instructions on determining the amount of past-due SSI payments, see SI 02101.020C.6 and SI 02010.020D.8 in this section. For the exception to priority of payment order when there is a prior overpayment and payable representative fees, see SI 02101.002.

2. Exception to installment payment requirements

At the time of the past-due payment eligibility determination or during the installment process, installment payments are not required for a recipient:

• who has a medical condition which is expected to result in death within 12 months; or

• who is no longer eligible for SSI and is determined likely to remain ineligible for the next 12 months.

If the conditions above apply to an SSI recipient, we should pay the past-due amount in full.

3. Amount and timing of installment payments

We must pay installment payments in no more than three payments. We pay each installment payment in six-month intervals. If the second installment is not released timely, we must wait six months after the second installment to release the third (and final) installment. Each of the first and second installment payments cannot exceed three times the FBR (plus any federally administered State supplement), unless the exception for increasing the installment amount applies (see SI 02101.020B.4. in this section). The first and second installment payments should each be for the maximum FBR amount even if the balance due equals or exceeds this amount. The third (and final) installment payment includes the remainder of the past-due amount.

4. Exceptions to the limitation on the amount of the first and second installment payments

If the recipient provides documentation of any of the following debts or expenses, increase the amount of each of the first and second installment payments by the total amount of the documented debts and expenses.

a. Debts

Increase the amount of the first or second or both installment payments if the recipient provides documentation of outstanding debts relating to:

• food, clothing, and shelter; or

• medically necessary services, supplies or equipment, or medicine.

NOTE: Shelter may include any of the following:

• rent,

• property insurance,

• utilities (Gas, electric, heating fuel, water, sewer, garbage)

• mortgage payments, and

• property tax

NOTE: We determine medically necessary services, supplies or equipment on a case-by-case basis. Examples of non-traditional medical expenses can include, but are not limited to, the purchase of a:

• Car when necessary to get to doctor appointments or medical treatment, especially if the recipient lives in a rural area with no public transportation;

• Mobile phone to enable the recipient to contact medical offices; or

• Computer to enable the recipient to use SSA’s online services.

b. Expenses

Increase the amount of the first, second or both installment payments if the recipient provides documentation of current or expected expenses relating to:

• medically necessary services, supplies or equipment; or

• the purchase of a home.

NOTE: We determine medically necessary services, supplies or equipment on a case-by-case basis. Examples of non-traditional medical expenses can include, but are not limited to, the purchase of a:

• Car when necessary to get to doctor appointments or medical treatment, especially if the recipient lives in a rural area with no public transportation;

• Mobile phone to enable the recipient to contact medical offices; or

• Computer to enable the recipient to use SSA’s online services.

c. Amount of increase allowed and when we will pay

If the recipient provides the debt or expense documentation, we may increase the installment payment amount by the total debt or expense amount. The recipient may request, and be paid, an installment increase at any time.

EXAMPLE: A recipient is due $10,000.00 in past-due SSI. We release the first installment to the recipient on 02/16, in the amount of $2199.00. His letter tells him he can receive more of the back payments right away if he has certain debts or expenses. He goes into the field office in 05/16 with his bills and requests an additional $2000.00. If his debts or expenses meet the criteria for an increase, we can pay the $2000.00 immediately via A-OTP. We consider the additional money an increase of the first installment. This leaves a balance of $5801.00.

In 08/16, he is due the second installment, so we release $2199.00, leaving a balance of $3602.00 as the third and final installment.

d. Increase only allowed for non-reimbursable expenses

The increase only applies with respect to debts or expenses that are not reimbursable by any public assistance program, Title XVIII, a State plan approved under Title XIX, or by any private party liable for payment by an insurance policy, prepaid plan, or other arrangement.

NOTE: Attorneys and non-attorney representatives who do not receive direct fee payment by SSA do not qualify as an exception for an increased first or second installment payment.

C. Policy - related issues

1. Dedicated accounts - individual under age 18 with a representative payee

A dedicated account is normally required if the recipient is under age 18, has a representative payee, and the past-due amount (after Interim Assistance Reimbursement (IAR), representative fee payments, and prior overpayment collection) are greater than six times the FBR plus any federally administered State supplement. Because installment payments are required if the past-due amount equals or exceeds three times the current FBR plus any federally administered State supplement, any case that meets the dedicated account requirements also meets the installment payments requirement. Establish the dedicated account before releasing any past-due payments. (For instructions on dedicated accounts, see SI 02101.010.)

2. Couple cases

When members of an eligible couple both become eligible at the same time, determine if installment payments are required using the couple's FBR (plus State supplement. However, when only one member becomes eligible while the other's claim is pending, use the individual's FBR (plus State supplement) to determine if installment payments are required for that member of the couple.

When the second member of the couple becomes eligible, one-half of the couple's rate applies in determining whether installment payments would be required if there is an underpayment due that member. This does not affect the first member's installment payments.

3. Effect on resources

Each installment payment retains a nine-month exclusion period following the payment receipt month. For retroactive SSI and RSDI payments, see SI 01130.600. Do not consider the unpaid installment balance a resource. Exclude dedicated account installment payments indefinitely as a resource.

4. IAR payments

The system holds the underpayment when a pending GR code is on the SSR. Conduct the prepayment review to send the electronic accounting record to the State and set the UPV of “V”. When the state certifies the interim assistance (IA) payment amounts, the system determines the reimbursement due and releases the past due payment following the priority of payment order. If the case meets an exception to eIAR, follow the instructions in SI 02003.025.

5. Representative fees

Installment payments are determined after we reimburse the State for interim assistance or for the direct payment of any representative fees. If the authorized representative elects direct fee payment, follow instructions in:

• GN 03920.000 Administering Representatives Fees Provisions

• GN 03930.000 Fee Authorization Under the Fee Petition Process

• GN 03940.000 Fee Authorization Under the Fee Agreement

6. Overpayment collection with installment payments on the record

We may deduct an overpayment for a different period from the unpaid balance of the past-due installments after we give the recipient due process rights for the overpayment and the appeal period has expired. The system automatically offsets an overpayment against the past due installment when we release the first, second, or third and final payment.

NOTE: When SSA pays authorized representative fees direct, and a prior overpayment is on the record, the priority of payment order is:

• IAR payment

• Direct Representative Fee Payment

• Prior overpayment recovery (see GN 03920.000, GN 03930.000, GN 03940.000 and SM 01901.000 for instructions.)

7. Additional past-due SSI payments become payable

Any additional past-due SSI payments that become payable during the installment period become part of the installment process. An automated notice informs the recipient that we will add the additional underpayment to the next installment payment. The recipient must contact the FO to receive this money sooner. The FO needs to send an A-OTP (using the UPOT screen from the UPSP Menu) only for the additional past-due amount.

8. FLA “D” cases

For recipients in the FLA D living arrangement ($30 cap), the threshold when making the determination for paying past-due installments is an amount that equals or exceeds three times (the current FBR, plus any federally administered State supplement), i.e., for 2016, 3 X FBR ($733 plus any applicable State supplement).

9. Period of ineligibility

The installment payment process continues at six-month intervals for a maximum of three payments until the past-due amount is paid in full, unless the recipient meets an exception in this section at SI 02101.020B.2. When a recipient is in non-pay or suspense status, issue the installment payments using the A-OTP process and send manual notices, unless the recipient resides in a correctional facility, per SI 00529.001. (see SI 02101.020D.3 in this section).

10. Death of recipient

If the recipient dies prior to receiving all past-due payments, follow SI 02101.001 to determine who is eligible for the decedent's remaining past-due SSI payments.

11. Current calendar month payments included in amount subject to installments

If payments for the current calendar month or subsequent month or both are included in the amount subject to installments, issue an A-OTP for the current month or subsequent month or both. In some instances, this action removes the case from the installment provisions.

NOTE: Take this action only after any prepayment review of large underpayments (see SI 02101.025), adjustment for IAR calculation, or adjustment for direct attorney/non-attorney fee payment and collectible overpayment from a different period.

EXAMPLE 1: If we effectuate the SSI claim on August 15th, the current computation month is September and the first monthly payment would be issued September 1st.

We treat all due amounts through August as an underpayment and are subject to the installment provisions if the underpayment is more than three times the FBR. The FO may issue an A-OTP for August (the current calendar month).

EXAMPLE 2: If we effectuate the claim after the current computation month cutoff in August, the current computation month is October, and the first monthly payment is issued October 1st. Treat all payments due through September as an underpayment, subject to installment payment requirements if the underpayment is more than three times the FBR. In this situation, the FO may pay the current calendar month’s payment (August), and September’s payment by A-OTP. The FO needs to issue a manual notice when paying the current or subsequent month by an A-OTP. In both examples, the possibility exists that the A-OTP may reduce the underpayment to less than three times the FBR, removing the underpayment from installment payment requirements.

D. Process for releasing underpayments

1. Current pay records

For performing the prepayment review, follow the instructions in SI 02101.025. To release the underpayment after the prepayment review, use the UOUP screen through DIRECT SSR Update (see MSOM BUSSR 004.018) and choose the appropriate underpayment release code.

After we make the IAR payment to the State, pay representative fees directly, and recover any prior overpayment. The system determines whether installment payments or dedicated accounts apply. The system also generates the appropriate notices if a dedicated account is required.

2. Terminated records

As long as an underpayment (UPX) remains on a record, the system does not automatically terminate the record. However, in cases where the record has terminated (e.g., T31, T32), manually control the case until we issue all past-due payments. If you erroneously terminate the record (T30, T33), manually, control the case until we issue all past-due payments. Follow SI.020B.2 if the recipient is no longer eligible for SSI and is determined likely to remain ineligible for the next 12 months.

NOTE: The No Social Security Benefits for Prisoners Act of 2009 (NSSBP) prohibits paying SSI underpayments to recipients or terminated recipients who are prisoners, confined in a public institution based on a court order for a criminal act, fugitive felons, or probation or parole violators. For instructions on processing incarcerated claimants and recipients’ underpayments, see GN 02607.550, SI 00529.001, and SI 00529.020.

3. Non-pay records

The system issues installment payments in only a few non-pay situations when a record goes into non-pay status. Control and issue installment payments using the A-OTP process and send manual notices in any case where the system does not release the payment, unless the recipient resides in a correctional facility, per SI 00529.001 (see MSOM BUSSR 003.007).

4. Current pay – IAR, no IAR, direct representative fee payment, dedicated accounts or installments

NOTE: When SSA pays authorized representative fees directly, and a prior overpayment is on the record, the priority of payment order is:

• IAR payment

• Direct representative fee payment

• Prior overpayment recovery

5. Exception to installment provision - ineligibility likely for at least 12 months or medical condition likely to result in death within 12 months

If the recipient is likely to remain ineligible for SSI (or becomes ineligible during the installment process) or the medical condition will likely result in death within 12 months:

• Complete a prepayment review, if applicable, according to SI 02101.025.

• Document the file showing the reason for issuing one payment rather than installments.

• Select Option 5 on the UOUP screen to indicate the case meets an installment exception and the prepayment review is complete. The system releases the underpayment via the automated payment process. (see MSOM BUSSR 004.018.)

NOTE: You can only use the UOUP screen to release underpayments when the current payment status code is CO1, E01, S21, NO4, NO6, N19, NO7, NO8, N27 and NO1 records meeting systems criteria.

If an SSI recipient becomes ineligible during the installment process and is likely to remain ineligible for at least 12 months, or if the recipient informs the FO that his or her medical condition will likely result in death within the next 12 months and requests the remaining past-due SSI payments, we can issue the remaining past-due amount.

NOTE: Examples of where ineligibility is likely to continue for 12 months include, but are not limited to continuing Title II income (N01) or a closed period of disability (N07). However, other circumstances could also provide a basis for such a conclusion.

EXCEPTION: We cannot pay underpayments or retroactive Title XVI payments to claimants, recipients, or terminated recipients while they are residing in a correctional institution, confined in a public institution based on a court order for a criminal act (CPICO), a fugitive felon (FF), or in violation of probation or parole (PPV). See the No Social Security Benefits for Prisoners (NSSBP) Title XVI Provisions located in SI 00529.001.

Refer to the instructions for terminally ill cases, (TERI) (see DI 23020.045) as guidance in considering whether there is an expectation that an individual's medical condition will result in death within 12 months. When determining whether a recipient is likely to remain ineligible for 12 months or more, consider the facts involved in the case.

6. Exceptions to installment limit - increased payment - documentation

The first or second installment payment may be increased by the amount of the recipient’s outstanding debt or expenses under the conditions described in this section at SI 02101.020B.4.

The amount by which we increase the payment cannot exceed these “approved” debts or expenses. The recipient may request an increase to the installment payment at any time.

Let the recipient know what the exceptions are to the limit on the amount of the first and second installment during the interview, and explain the kinds of outstanding debts or current or anticipated expenses that are acceptable expenses for increasing the installment.

NOTE: The notice explains the debts and expenses that can increase the first and second installment payments.

When the recipient requests an increased installment payment because of outstanding debts or expenses as described in this section at SI 02101.020.B.4, obtain:

• Evidence of the outstanding debts or expenses, (e.g., copies of bills, closing costs statements, or letter of intent,) as described in SI 02101.020B.4. relevant to the increased payment above, and

• Document the file via the locked DROC or on an SSA-5002, and

• Issue the increased payment by A-OTP (see SM 01901.001).

• Issue a manual notice (use DOCS/DPS notices for language).

NOTE: Enter the increased payment amount and date in the SSR Remarks field.

7. Dedicated account involvement

When past-due payments greater than six times the FBR (plus any federally administered State supplement) are due a recipient under age 18 who has a representative payee, in addition to requiring a dedicated account, installment payments are required. SSA pays all dedicated account cases in installments by direct deposit into a dedicated account. For the requirements of a dedicated account, follow the instructions in GN 00602.140 and GN 00603.025. If an exception to installments applies, (see SI 02101.020B.2), the entire past-due amount is then deposited into the dedicated account.

8. Prior overpayment from other record – installment-only cases

Prior overpayments are offset against the first, second and third (final) installment payment(s) automatically. Due to systems limitations, we cannot offset in all dedicated account or installment payment cases. If the system does not offset a prior overpayment, continue collecting the overpayment at the 10 percent rate.

NOTE: We cannot offset prior collectible overpayments against an installment payment until we directly pay an authorized representative. The priority of payment order when direct representative fee is involved is:

• IAR,

• direct representative fee payment; and

• prior overpayment recovery.

See SM 01901.000, GN 03920.000, GN 03930.000 and GN 03940.000.

9. Subsequent overpayment during installment payment period

If we are making installment payments and the FO inputs a change for a subsequent period that creates an additional overpayment, DO NOT OFFSET the overpayment against the installment payments. After all overpayment due process rights for the overpayment (including waiver issues) are complete, a collect decision is put on the record (D TAC), and the overpayment is recovered from any installment funds that have not been paid. If we have not completed due process, or the recipient requests a waiver, issue the last installment payment timely and recover the overpayment via 10-percent withholding from the current check.

10. Additional amounts due/excess payments during installment payment period

Automated netting is part of the computational process. Netting takes place prior to placing the installment or dedicated account indicator on the record. However, once we place the installment or dedicated account indicator on the record, automated netting does not take place.

When the recipient receives installment payments and the FO inputs a change for a subsequent period in which higher payments are due for some months and lower payments are due for other months, allow the system to create a B3 diary (unresolved overpayment) for months of excess payment and add the additional amounts due the recipient to the installment total. After we release the overpayment notice and there is a collect decision on the record (D TAC), and installment funds remain, the system recovers the overpayment (if the appeal period has not lapsed, or if there is a waiver request, we cannot recover from the installment payment. If these issues are not resolved before we make the final installment payment, recover the overpayment through 10 percent withholding from the current check.)

11. Subsequent past-due payments during installment payment period

a. Dedicated Account Not Involved

When the recipient receives installments and the FO inputs a change for a subsequent period that creates an additional past-due amount, the system adds the additional underpayment to the total remaining past-due payments we are issuing via installments. This generates an automated notice to the recipient explaining the additional past-due amount.

b. Dedicated Account Involved

When we make installment payments into a dedicated account and input a change for a subsequent period that creates an additional underpayment that meets the requirements of an optional deposit (see SI 02101.010C.3), add the additional underpayment to the total remaining past-due payments we are issuing via installments. The system generates an automated notice to the recipient explaining the additional past-due amount. If the recipient or the representative payee requests the additional underpayment prior to the next installment payment (i.e., he or she does not want it deposited into the dedicated account), the FO must make an A-OTP for that amount. If the recipient or the representative payee does not request the optional underpayment when the next installment payment is paid, we should pay the optional payment separately to the recipient by an A-OTP and the installment payment directly into the dedicated account by an A-OTP. An automated notice will release the installment payment; however, a manual notice is required for the optional payment.

NOTE: Automated netting takes place prior to placing the dedicated account/installment indicator on the record. Once the indicator is on the record, automated netting does not occur, see SI 02101.020D.10 in this section.

E. Procedure – manual netting notices

Prepare the appropriate manual notice, SSA-L8025, SSA-L8151, SSA-8166 or SSA-L8100 when releasing an underpayment if netting took place. We require manual notices for A-OTPs when the FO suppresses the automated notice. You can find manual netting notices in DPS.

F. References

• GN 00602.140 Permitted Expenditures from Dedicated Accounts

• GN 00603.025 Dedicated Accounts for Disabled/Blind SSI Recipients Under Age 18

• GN 02607.550 Payments to Prisoners and Correctional Institutions

• GN 03920.000 Administering Representative Fees Provisions

• GN 03930.000 Fee Authorization Under the Fee Petition Process

• GN 03940.000 Fee Authorization Under the Fee Agreement

• SI 00529.001 No Social Security Benefits for Prisoners (NSSBP) Title XVI Provisions

• SI 00529.020 No Social Security Benefits for Prisoners (NSSBP) Title XVI Field Office (FO) Processing Instructions

• SI 02003.020 Field Office Processing of IAR Authorizations

• SI 02003.022 Processing eIAR Field Office Intervention Cases

• SI 02003.025 IAR Payment Processing for Exception and Proration Cases

• SI 02101.001 SSI Underpayment Definitions and General Rules

• SI 02101.025 Basic Requirements of Supplemental Security Income (SSI) Underpayment (UP) Review

• SI 02101.010 Past-Due Benefits Payable – Individual Alive Under Age 18 with Representative Payee – Dedicated Account Required

• DI 23020.045 Terminal Illness (TERI) Cases

• SM 01311.660 Overview of SSI Underpayment Processing

• MSOM BUSSR 003.007 Special Payments Menu (UPSP)

• MSOM BUSSR 003.022 One-Time Payment (UPOT)

• MSOM BUSSR 004.018 Underpayment Processing (UOUP)