TN 8 (12-10)
GN 00603.055 Transfer of Conserved Funds
20 CFR 404.2060, 20 CFR 416.660
Generally, SSA learns of conserved funds when a payee submits an annual or final accounting report. When a payee, who has conserved funds for a beneficiary, stops serving as the payee, the payee generally must return those funds and interest earned thereon to SSA. SSA will reissue returned conserved funds to a successor payee or to the beneficiary directly if he or she no longer needs a payee.
SSA may permit a former payee to transfer conserved funds directly to a new payee or to a capable beneficiary rather than returning them to SSA if it serves the best interest of the beneficiary. SSA will allow such transfers on a case-by-case basis. For guidelines in determining when a direct transfer of conserved funds may be in the best interest of a beneficiary, see GN 00603.055C.
In exceptional circumstances, SSA may allow a former payee to continue managing conserved funds when the arrangement serves the best interest of the beneficiary. For information on a former payee continuing to manage conserved funds see “When a Former Payee May Administer Conserved Benefits” (GN 00603.130).
When we select a new payee, a beneficiary becomes his or her own payee, or a beneficiary’s entitlement ends, we notify the former payee to return to SSA any money saved for the beneficiary unless the payee made other plans with SSA for handling it. The notice provides an envelope addressed to the Mid-Atlantic PSC for the return of any conserved funds. See Final Notice to the Former Representative Payee, or the Non-Selected Applicant When Another Payee is Appointed - (NL 00703.821).
1. Former payee returns conserved funds
When a former payee returns any conserved funds, we will reissue them to the individual or organization serving as payee at the time of payment or directly to the beneficiary if he or she no longer needs a payee. The amount of conserved funds will determine whether we release them in a lump sum or installments. For instructions on administering a large amount of conserved funds see “Payment of Large Retroactive Benefits or Conserved Funds (GN 00502.186), “Payment of Large Amounts of Accumulated or Conserved Benefits—Title II Only” (GN 00603.070), and “Installment Payments of Accumulated or Conserved Funds—Title II Only” (GN 00603.085).
2. Former payee requests direct transfer of conserved funds to new payee or beneficiary
On a case-by-case basis, you may approve a former payee’s request to transfer conserved funds directly to the new payee or to the beneficiary provided:
The direct transfer serves the best interest of the beneficiary,
We have not replaced the former payee because of misuse of benefits or other evidence of unsuitability, and
The former payee agrees to transfer funds within 30 days.
Document your determination in the Representative Payee System (RPS) using the Beneficiary/Recipient Special Text (BRST) screen (MSOM RPS 002.021).
Notify the beneficiary or the beneficiary’s new payee of the existence of any conserved funds and that the former payee will send those funds within 30 days.
If the former payee does not know the new payee’s address, use form SSA-3288, Consent for Release of Information, to obtain the new payee’s written consent before disclosing his or her address to the former payee. For additional information, see “Disclosure with Consent-General” (GN 03305.001).
3. Former payee reports transfer of conserved funds without consulting SSA
If the former payee transferred conserved funds to the beneficiary or to a new payee without consulting SSA, contact the new payee or beneficiary to confirm the amount transferred and document the BRST screen in RPS.
Query the RPS to determine if the former payee is a payee for other beneficiaries. If so, advise the former payee that he or she must obtain SSA approval prior to transferring conserved funds directly to a new payee or to the beneficiary.
4. Former payee fails to return conserved funds
When all reasonable efforts by SSA fail to collect conserved funds held by a former payee, document your efforts on the BRST screen in RPS. The former payee’s failure to return conserved funds to us or to transfer them at our direction to the beneficiary or a successor payee deprives the beneficiary of the use of those funds and warrants an investigation into misuse of benefits. For additional information on misuse of benefits, see “Overview—Misuse of Benefits GN 00604.001.
5. What to do if a Beneficiary Dies after Payee Returned Conserved Funds
Upon the death of a beneficiary, any returned conserved funds become the property of the beneficiary’s estate, and State law governs the disposition of the beneficiary’s property. Do not return the conserved funds to the former payee.
Contact the former payee to determine the existence of a legal representative. If there is no legal representative, contact the State probate court for instruction on the disposition of the conserved funds.
While conserved funds are not underpayments, follow the legal representative documentation procedures outlined in GN 02301.035, Legal Representative – Underpaid Person Deceased. For additional information, see “Entitlement Terminated—Notice to be Given About Conserved Benefits” (GN 00603.100).
C. Guidelines for determining best interest
Use the following examples as guidelines to determine if a direct transfer is in the best interest of a beneficiary:
1. Custodial parent former payee
A mother with custody serves as payee for her son. She reports that he is capable of managing his money and will be living alone. They visit the field office and the beneficiary applies to be his or her own payee. The mother wants to give the conserved funds directly to the beneficiary to pay for the deposit on the apartment and for utilities. The beneficiary needs the direct transfer as soon as possible so that he does not lose the apartment to another renter. Direct transfer to the beneficiary may serve the beneficiary’s best interest.
2. Family member former payee
An aged beneficiary has two daughters. One has served as her payee for two years, but needs to relocate due to a job offer. We selected the other daughter to serve as the new payee. Since the former payee used most of the beneficiary’s monthly benefits to pay for the beneficiary’s stay in assisted living, the new payee believes that it is important that she have access to the conserved funds to help pay for any additional expenses that may arise. Direct transfer to the new payee may serve the beneficiary’s best interest.
3. Organizational payee
Board and Care Home closes. It served as payee for ten beneficiary residents. The beneficiaries relocated to another facility that has just opened. We selected the new facility as payee. The cost of care in the new facility will take most of the beneficiaries’ monthly benefits, but all of the beneficiaries have accrued some conserved funds in a collective account. The beneficiaries and their new payee state that they will need funds to buy new bed linens, pillows, and blankets for their new rooms. They report that they have been in direct contact with the former payee, who has agreed to turn over the funds directly to the new payee. Direct transfer to the new payee may serve the best interests of these beneficiaries.
4. Foster care agency payee
A foster care agency serving as payee provides documentation that when a child in foster care attains age 18 and ages out of the foster care system, State law requires the agency to disburse any conserved funds and assets of the child directly to the child to facilitate transition into adult life. Direct transfer may serve the beneficiary’s best interest.
5. New payee prefers transfer through SSA
A former payee no longer has custody of a beneficiary and asks to transfer conserved funds directly to the new payee. The FO contacted the new payee for consent to give its address to the former payee. The new payee indicated beneficiary dissatisfaction with the former payee’s facility and prefers that the former payee not know his whereabouts. The new payee declined to give consent in deference to the beneficiary. Direct transfer would NOT be in the beneficiary’s best interest.
Payment of Large Retroactive Benefits or Conserved Funds, GN 00502.186
Conservation of Benefits - Basic Policy, GN 00603.001
Payment of Large Amounts of Accumulated or Conserved Benefits -- Title II Only, GN 00603.070
Installment Payments of Accumulated or Conserved Funds -- Title II Only, GN 00603.085
Entitlement Terminated - Notice to be Given About Conserved Benefits, GN 00603.100
When Former Payee May Administer Conserved Benefits, GN 00603.130
When a Title II Debt is Referred for Civil Suit, GN 02215.150
Legal Representative – Underpaid Person Deceased, GN 02301.035
Procedures for Handling Remittances and Premium Payments in the Field Office - Table of Contents, GN 02403.000
Processing Savings Bonds Received as Conserved Funds in the FO, GN 02403.015
Disclosure With Consent – General, GN 03305.001
Final Notice to the Former Representative Payee, or the Non-Selected Payee Applicant When Another Payee is Appointed, NL 00703.821
Beneficiary/Recipient Special Text (BRST), MSOM RPS 002.021