Effective Dates: 08/29/2024 - Present Previous | Next

TN 35 (08-24)

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

CITATIONS:

Social Security Act §1631(a)(2)(F) and (10);
20 C.F.R. §416.546, §416.640(e)(2), and §416.545

A. Introduction - dedicated accounts

Effective August 1996, after any Interim Assistance (IA) reimbursement payment and direct payment of representative fees, we must pay any remaining past-due payment that exceeds six times the Federal Benefit Rate (FBR) plus any federally-administered Optional State Supplement (OSS) that we would normally pay to the representative payee (payee) of an eligible individual under age 18, into a dedicated account at a financial institution. For dedicated account requirements, refer to GN 00603.025. For information regarding collective savings and checking accounts, refer to GN 00603.020.

B. Policy - dedicated accounts

1. Past-due benefits paid to a dedicated account

The payee must establish a dedicated account before we release the past-due benefits. We will deposit the past-due benefits into this account. The funds may be used only for certain limited expenditures as described in GN 00602.140.

EXCEPTION: If we have appointed the Bureau of Indian Affairs as the payee and direct deposit is not possible, an automated one-time payment (A-OTP) directly to the Bureau of Indian Affairs for deposit into the child’s account.

IF…

THEN…

After reimbursement for IA and direct payment for representative fees, the past-due benefit is not equal to or greater than 3 X (FBR + OSS)

Normal underpayment rules apply and we will release the past-due benefits or offset for a collectible overpayment.

After reimbursement for IA and direct payment for representative fees, the past-due benefit equals or exceeds 3 X (FBR + OSS) but does not exceed 6 X (FBR + OSS)

Installment provisions will apply, and we will release the past-due benefits in installment payments or offset for a collectible overpayment. For more installment payment information, refer to SI 02101.020. A dedicated account is not required.

After reimbursement for IA and direct payment of representative fees, the past-due benefits are greater than 6 X (FBR + OSS)

We must issue these payments in installments at 6-month intervals, in addition to depositing them in a dedicated account that the payee established. For installment requirements, refer to SI 02101.020.

After reimbursement for IA and direct payment of representative fees, the past-due benefits are greater than 6 X (FBR + OSS) but payee does not establish a dedicated account

We cannot release the past-due benefits to the payee. The technician must determine the need for a new payee, per GN 00504.100.

The individual dies prior to the payee establishing a dedicated account

Follow normal underpayment rules in SI 02101.002 to determine if and to whom we may issue the past-due benefits.

The individual dies after the payee establishes a dedicated account

We have no authority over this account upon the individual's death. The dedicated account is part of the deceased individual’s estate.

The individual attains age 18 prior to the issuance of the notice of determination of eligibility for past-due benefits

The dedicated account provision does not apply. Normal underpayment rules apply, per SI 02101.001. Installments may apply, per SI 02101.020.

An individual is under age 18 but does not have a payee

Dedicated account rules do not apply. Normal underpayment rules apply, per SI 02101.001. Installments may apply, per SI 02101.020.

2. Optional deposits to a dedicated account

After a payee establishes a dedicated account, subsequent past-due benefits that are 6 X (FBR + OSS) or less are not required to be deposited in the dedicated account. If the payee chooses to deposit the funds into a dedicated account, the payee must use the funds in the dedicated account for limited permissible expenditures. For more information about permitted expenditures from a dedicated account, refer to GN 00602.140.

If the subsequent past-due benefit is equal to or greater than 3 X (FBR +OSS), but does not exceed 6 X (FBR +OSS), installment provisions apply.

3. Definition - past-due benefits

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    Benefits due, but unpaid, that accrued prior to the month of payment effectuation;

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    Benefits due, but unpaid, that accrued during a period of suspension for which the individual was subsequently determined to have been eligible; or

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    Any adjustment to benefits that results in an accrual of unpaid benefits.

4. Payee responsibilities

The payee may use benefits deposited into a dedicated account only for specific and limited expenses for the child. For more information about the payee requirements and responsibilities concerning these dedicated accounts, refer to GN 00602.140.

5. Resource and income exclusions

Past-due benefits deposited into a dedicated account are excluded from resources. Any accrued interest the account earns is excluded from income and resources. The payee may deposit additional smaller past-due benefits into the dedicated account. These benefits are also excluded from resources. For additional information on this resource and income exclusion, refer to SI 01130.601.

6. Installment dedicated accounts

Effective for past-due benefits paid 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 formula for determining when we pay SSI past-due benefits in installments.

If the past-due benefits equal or exceed 3 X (FBR+OSS) but do not exceed 6 X (FBR+OSS), after IA reimbursement and direct payment of representative fees, we must issue these payments in installments, but they do not require a dedicated account.

If the past-due benefits are greater than 6 X (FBR+OSS), after IA reimbursement and or direct payment of representative fees, we must deposit these payments into a dedicated account in up to 3 installments at 6-month intervals. The first and second installment payments cannot exceed 3 X (FBR + OSS) unless the technician documents the request for an additional amount on a Report of Contact when an individual has outstanding debts or expenses as described in SI 02101.020B.4. However, because of dedicated account restrictions, installment payments to dedicated accounts should only be increased for debts related to:

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    Medical treatment.

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    Education or job skills training; or

    If related to the individual's impairment:

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    Personal needs assistance,

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    Special equipment,

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    Housing modification,

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    Therapy, or

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    Rehabilitation.

For examples of approved dedicated account expenditures, refer to GN 00602.140F.

The system determines (after any prepayment review, IA reimbursement, direct payment of representative fees, and automated recovery of any outstanding overpayment) whether installments apply. The system sets EA and IN diaries, and sends E1 and I6 alerts notifying the FO that the past-due benefits are scheduled for A-OTP into the dedicated account. The system also generates an automated notice to the individual explaining the current installment payment and that we will issue the next payment in 6 months.

Generally, the required dedicated account notices are automated. If a case requires a manual notice, the notices are available in DPS.

If the system does not automatically offset a prior collectible overpayment, recover the overpayment from the individual's continuing SSI payments at the 10 percent recovery rate.

However, even though we must deposit the benefits into a dedicated account, installment procedures do not apply if the individual:

  • •

    Has a medical condition that is expected to result in death within 12 months, or

  • •

    Is ineligible at the time of payment and is likely to remain ineligible for the next 12 months.

If one of these exceptions applies, we deposit the entire amount into the dedicated account using the A-OTP process.

7. Current calendar month benefits included in installment dedicated accounts

If benefits for the current calendar month, or a subsequent month, are included in the benefits subject to installments or dedicated accounts, the FO must use the A-OTP process to issue the current month, or a subsequent month's payment to the payee. In some instances, this action removes the case from the installment or dedicated account provision.

NOTE: 

We will only take this action after any prepayment review of large underpayments adjustment for reimbursement for IA, calculation or adjustment for direct payment of attorney or non-attorney fees, or automated recovery of any collectible overpayment. For more information about the prepayment review requirements for large underpayments, refer to SI 02101.025.

EXAMPLE 1: If the technician effectuated the SSI claim on August 15th, the current computation month is September. we will issue the first monthly payment on September 1 and treat all benefits through August as an underpayment subject to the installment or dedicated account provisions. The FO must issue an A-OTP for August (the current calendar month).

EXAMPLE 2: If the technician effectuated the claim after the current computation month cutoff in August, the current computation month would be October. We would issue the first monthly payment on October 1, and treat all benefits due through September as an underpayment subject to installment or dedicated account provisions. In this situation, the FO must issue an A-OTP for the current calendar month’s benefits (August), and September benefits.

In both examples, the A-OTP may reduce the underpayment to less than 3 X FBR so that the installment provisions do not apply or less than 6 X FBR so that dedicated account provisions do not apply.

8. Interim Assistance Reimbursement (IAR) cases

Effective November 2010, when the FO, or an automated interface adds a pending grant reimbursement code (GRC) to an SSR, the system holds the entire underpayment with a UPV:V until the IAR is processed. Reimbursement to the state occurs automatically, without FO involvement unless the case requires FO intervention or the case is an eIAR exception. For information on FO intervention cases, refer to SM 01311.662C. For eIAR exception cases, refer to SI 02003.023.

If a dedicated account is not required after IAR, direct payment for representative fees, and automated recovery of any collectible overpayment, we release the underpayment.

For installment procedures, refer to SI 02101.020.

9. Closed period of disability at time of past-due benefit determination and medical cessation cases

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    Closed period of disability cases placed in PSY N07 (i.e., not disabled) do not require a dedicated account for a child under 18 with a representative payee, even if the payee files an appeal.

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    In medical cessation cases (CDRs), even when the individual appeals the cessation, the dedicated account rules stop at termination, unless we approve a request for benefit continuation. If benefit continuation applies, then dedicated account rules continue.

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    If an existing dedicated account is involved in a medical cessation case, the rules for the account cease, unless benefit continuation applies.

10. Non-pay dedicated account cases with installments

If a case goes into non-pay or suspense status during the installment process, the FO must issue the scheduled installment to the payee by A-OTP unless the individual is residing in a correctional institution. The case requires a manual notice. For instructions on the prohibition against paying installments to persons residing in a correctional institution, refer to SI 00529.001.

C. Procedure

1. IAR involvement – underpayment $15,000 or more

If the past-due benefits are equal to or greater than $15,000, the FO must complete the underpayment prepayment review as described in SI 02101.025. Use the Underpayment Processing (UOUP) screen through Direct SSR Update. For more information on the UOUP screen, refer to MS 00304.018.

Once the FO completes the prepayment review, select option 4 = Release Underpayment/Prepayment Review Completed or Title II Offset Involved from the UOUP screen. If the FO does not complete the prepayment review through the UOUP screen, the case will not be automated. If the case is automated, the system generates:

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    An underpayment verification code (UPV) of ‘V’;

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    A request that the State submit its request for reimbursement for IA within 25 days through the eIAR website.

    Once the State submits the request, the system will compute and issue the reimbursement amount, and process the remaining underpayment according to the priority of payment rules. If the system cannot issue the reimbursement automatically, it will post an I9 diary to the record which requires FO intervention;

    NOTE: 

    The system will not set the E1 alert or the EA diary until the IAR is resolved.

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    An E1 alert to the FO for the payee to establish a dedicated account; and

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    An EA diary indicating need for account establishment.

The system then determines whether the remaining underpayment requires a dedicated account and whether installments are required and changes the UPV field from a ‘V’ to ‘2’ or ‘B.’ When the payee has established the dedicated account, the past-due benefits should be direct deposited into the account by A-OTP, per SM 01311.660 and MS 00304.018.

NOTE: 

For past-due benefits less than $15,000 with IAR involvement, the system also determines whether a dedicated account is required after the State and or direct payment of representative fees has been paid. If a dedicated account is still required, the system generates an alert and diary for the establishment of the account and benefit payment.

Once the account is established, follow the procedures in SI 02101.010C.3. in this section.

The system releases the underpayment in installments, if required if a dedicated account is not required after IA reimbursement and or direct payment for representative fees. For an overview of the SSI underpayment system process, refer to SM 01311.660.

When there is a prior collectible overpayment on the record and there is direct payment of authorized representative fees, the systems priority of payment order is:

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    IAR payment

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    Direct Payment of Representative Fee

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    Recovery of Prior Overpayment

2. No IAR involvement and no direct payment of representative fee

If the past-due benefits require a prepayment review, the FO should follow instructions in SI 02101.025. After the prepayment review, use the UOUP screen to release the underpayment using the appropriate option. Refer to MS 00304.018 and SM 01311.661.

The system determines if a dedicated account with installments applies. It sets the UPV to ‘B’ and issues an automated notice to the payee informing them to set up a dedicated account. The system also sets an EA diary with a 30-day maturity date. If the diary matures, the system generates an E1 alert to notify the FO that the payee must establish a dedicated account. The system sends follow-up alerts every 15 days thereafter until we issue an A-OTP to the dedicated account, resolving the diary.

NOTE: 

If no prepayment review is necessary but the record requires a dedicated account, the system sets the UPV to ‘B’ and sets appropriate diaries and alerts, as explained. The system also generates the appropriate notices.

3. Payee establishes dedicated account

Once the payee establishes a dedicated account for an individual who is disabled and provides the FO with the required information for the account (the name and address of the financial institution, the routing number, account number, account title, type of account, and the amount of money deposited to open the account), the FO should:

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    Have the payee or individual in direct pay sign and date the SSA-552 “Dedicated Account Use of Funds Statement.” A PDF version of the SSA-552 is available on the inFORM Library website to print. The SSA-552 is also available online. The technician can also send the link to the individual who needs to complete the SSA-552 through the eMailer program.

    NOTE: 

    For instructions on completing the SSA-552 statement, refer to GN 00602.140F.

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    Input the financial institution information (routing number, account number, etc.) using the One-Time Payment Address (UPOA) screen. For A-OTP rules for records with direct deposit to the dedicated account, refer to SM 01901.160.

The dedicated account cannot be the same financial account to which we issue the regular, recurring SSI payment. If the bank account input on the A-OTP matches the bank account on the SSR in the DRDP segment of the SSR, the system will issue a UP reject. Refer to SM 01901.160 for A-OTP rules for records with direct deposit. Use the Special Payments Menu (UPSP) from the Direct SSR Update to establish an A-OTP from the One-time Payment (UPOT) screen (Option 2) to direct this payment to the new dedicated account. This does NOT affect the regular, recurring SSI payment information on the SSR.

4. Payee establishes dedicated account - subsequent underpayments

After the payee has established a dedicated account, the amount of a subsequent underpayment determines whether we must deposit, may deposit, or may not deposit it into the dedicated account.

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    If the subsequent underpayment may be deposited, the system releases the underpayment and notice with language stating that it may be deposited into the dedicated account.

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    If the subsequent underpayment is equal to or greater than 3 X FBR+OSS, it is paid in installments.

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    If we have begun installments, we will add any ‘new’ underpayment to the next installment. The system releases a notice that explains the new underpayment and instructs the payee to contact the field office if they want the money paid directly to them.

5. Payee does not establish a dedicated account

If, after 30 days from the original notice explaining the requirement for a dedicated account, the payee has not established the account, follow instructions in “Determining the Need for a Successor Payee” GN 00504.100. Once the EA diary matures, the system generates an E1 alert to the FO to notify them that the record is still waiting for a dedicated account. The system generates follow-up alerts every 15 days until the EA diary is resolved.

D. Examples

1. Individual under age 18 with payee - past-due benefits payable - dedicated account required

June is the payee for their child, Jake, a 7-year old who has a disability. The SSI claim was filed on January 3, 2023. On October 22, 2024, the FO receives a favorable disability determination from DDS that the child has a disability as of January 3, 2023.

The FO knows that the child's past-due benefit will exceed 6 times the adjusted FBR plus any federally administered optional State supplements ($914 + 75 State supplement for 2023 and $943 +$75 State supplement for 2024). The FO conducts the prepayment review ($21,059 in past-due benefits for February 2023 – October 2024), completes the UOUP screen through Direct SSR Update, and enters the appropriate selection.

The system holds the past-due benefits, sets the appropriate UPV code and diary, and issues an alert, if necessary. No IAR or representative fees are involved. The automated notice is released to the payee explaining the requirements of a dedicated account.

After receiving the dedicated account notice, the payee visits the FO with the required financial institution information. The FO has the payee sign and date the SSA-552, Dedicated Account Use of Funds Statement, explaining the limited expenditures authorized from this account.

The FO transmits the financial institution information on the UPOA screen and issues the first installment payment of $3,054 by A-OTP into the account. This resolves the EA diary. The system establishes an IN diary to indicate the next installment payment is due.

Two months prior to the second installment payment, June visits the FO to request $1,500 to purchase special equipment that is related to Jake’s impairment. The technician documents June’s request for the additional underpayment installment amount on a Report of Contact and issues an A-OTP to June to purchase the special equipment.

2. An individual with a disability attains age 18 prior to the determination of eligibility for past-due benefits - dedicated account is not required

Jean is payee for their child, Ross. Jean filed an SSI claim for Ross on February 3, 2024. On November 27, 2024, the FO receives a favorable DDS disability determination that Ross has a disability as of February 3, 2024. Ross attained age 18 on September 2, 2024.

The FO determines that Ross needs a payee. Although the past-due benefits exceed 6 times the FBR + OSS, because Ross attained age 18 prior to SSA issuing a determination they are eligible for past-due benefits, the past-due benefits are not subject to the dedicated account requirements, but we must pay them in installments.

Therefore, after prepayment review, if the underpayment is $15,000 or more, the FO adjudicates the case to pay and the system releases the past-due benefits in installment payments to the representative payee, along with an award notice.

3. IAR involved - dedicated account not required

The FO receives a favorable disability determination from the DDS on November 25, 2024 that Matt, who is ten years old, has a disability as of February 11, 2024. Matt's parent is selected as the payee.

Although there is an IAR, the FO believes the past-due benefits may still exceed 6 times the FBR + OSS, after we have paid the State. After we receive the SSA-L8125-F6 from the State and issue an A-OTP for the IAR, the past-due benefits no longer exceed 6 times the FBR + OSS. Therefore, a dedicated account is not required. If installments apply, the system releases the first installment to the payee and sets the UPV to ‘2’ to control for the next installment.

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0502101010
SI 02101.010 - Past-Due Benefits Payable - Individual Alive Under Age 18 with Representative Payee - Dedicated Account Required - 08/29/2024
Batch run: 08/29/2024
Rev:08/29/2024