TN 18 (01-17)
GN 01010.140 Delayed Claims
A. Policy for delayed claims
In a delayed claim situation, we process awards for claimants for whom we have established entitlement, while other auxiliaries or survivors are pending development that cannot be resolved immediately. The delayed claim process allows us to:
Adjust benefit amounts for non-delayed beneficiaries by including delayed claimant(s) in the distribution of the family maximum, and
Hold payments for delayed claimant(s) until entitlement is established and the claim is awarded.
Never use the delayed claim procedure to load a non-valid application (i.e., “dummy” or fictitious claim). A proper applicant must file a valid application.
1. When to delay a claim
Delay a claim for an auxiliary or survivor when they meet all of the following:
A proper applicant files an application for an auxiliary or survivor claimant and we are developing evidence for at least one factor of entitlement, and
Other entitled auxiliary or survivor claimants will be overpaid if we do not include the delayed claimant in the initial benefit calculation, and
Other entitled claimants are due immediate payment.
2. When not to delay a claim
Do not delay a claim for an auxiliary or survivor when they meet any of the following conditions:
The claimant files a valid application, meets all factors of entitlement, and submits all required evidence. For policy on valid applications, see GN 00204.001.
The other auxiliaries or survivors on the record are not due immediate payment.
The family maximum is not exceeded; and, therefore, does not affect the calculation of the benefit amount (e.g., the claimant is the only auxiliary or survivor).
The family maximum is involved, but the delayed claimant lives in the same household as the entitled claimant(s). In this situation, we recover overpaid benefits to existing auxiliaries or survivors on the record from the underpayment due to the delayed claimant.
The only outstanding issue is representative payee development. In this case, use a suspension event or diary, as appropriate, see GN 00504.110.
3. Handling leads for auxiliaries and survivors
A lead for Title II benefits, as defined in GN 00202.001, is a written or oral indication of potential entitlement where there is no intent to file by the party who furnishes the lead information. Document development and dispose of the lead per GN 00202.020H. If we subsequently receive an application for the auxiliary or survivor and establish entitlement, process the award as a late filer under the 202(j)(1) provision.
4. Handling protective filings for auxiliaries and survivors
Naming a current spouse or specifically naming or sufficiently identifying a child of the Number Holder (NH) establishes a protective filing for the auxiliary or survivor per GN 00204.010C. However, the NH or applicant who is naming the auxiliary or survivor may not always be the proper applicant to file an application for the protected individual. If the NH or applicant who is naming the auxiliary or survivor is not the proper applicant, follow instructions in GN 00204.012C. to close out the protective filing. In order to establish entitlement, a proper applicant must file a valid application for an individual with a protective filing.
If the NH or applicant who is naming the spouse or child is not the proper applicant for the auxiliary or survivor and you are not able to secure a valid application, you should do all of the following:
Send the 6-month closeout notice to the protected claimant or proper applicant. Follow procedures in GN 00204.012C.
Verify that all required evidence is in the file for claimants with valid applications. Refer to GN 01010.053 on Documenting the Adjudicative Decision.
Process valid applications and award benefits using the Automated 101 (A101) process and partially award the claim. Follow instructions in GN 01010.110C.1.b. on how to adjudicate partial awards manually.
Calculate the monthly benefit amount by distributing the family maximum among the beneficiaries including the protective filer(s) with no valid application(s) (to avoid future overpayments).
Document the claim and explain why the claim cannot be adjudicated via the Modernized Claims System (MCS) Earnings Computation (EC) process (i.e., potential auxiliary or survivor with a protective filing, but no valid application filed).
Set a follow-up diary for the appropriate processing center (PC) on the protective filing (see GN 01010.260A.2. bullet 4). Include instructions for the PC to add a Special Message about the protective filer(s) to the Master Beneficiary Record (MBR).
Transfer the A101 to the PC for processing.
After six months, if the protected filer has not filed a valid application, the PC will recalculate the payments for the auxiliaries or survivors on the record. The PC will adjust benefit rates and pay any underpayments due.
B. Examples of how to handle a delayed claimant with a valid application, a protective filing with no valid application, and a lead
EXAMPLE 1 – Delayed claimant with a valid application
James Hawkins lists his son, George Hawkins, on his initial application. James’ application is ready for adjudication along with claims for his current wife and two younger children, Thomas and Catherine. George lives in a separate household with his mother, James’ ex-wife.
We are able to reach George’s mother to obtain a valid application for benefits. However, George is missing the student verification to prove he is eligible for benefits, and it is going to take weeks before he is able to provide us the proof. Therefore, process George as a delayed claimant because:
George’s mother is the proper applicant and filed a valid application, and
We are developing at least one factor of entitlement for George (the student verification), and
George’s stepmother and siblings are due immediate payment, and
We adjust the benefit amounts of the other entitled auxiliaries because of George’s entitlement (since the family maximum is involved).
EXAMPLE 2 – Protective filing, but no valid application filed
James Smith died on 11/12/2015. His ex-wife, Martha, filed for benefits for two children. She also informed us of a third child, Sarah, living in another state with her mother. She provided us with the address of Sarah’s mother.
We have been unable to reach Sarah’s mother to obtain her application. Since Martha is not a proper applicant, she cannot file a claim for Sarah. By listing Sarah on the application with the other two children, Martha establishes a protective filing for Sarah.
We send Sarah’s mother a 6-month closeout notice and store the notice in ORS. We do not input or process a “dummy” claim for Sarah. Since immediate payment is due to Martha’s children and the family maximum is involved, we must follow instructions listed in section A.4 of this chapter. We must pay Martha’s children as if Sarah had filed an application to avoid overpayments for the two entitled children.
EXAMPLE 3 – Lead
Same scenario as Example 2, except Martha only thinks there is another child, and she cannot provide enough information to identify the child. This is a lead, not a protective filing.
We initiate development for possible benefits for this child. If we are unable to confirm the existence of the child, we do not adjust the benefit amount when processing the award for Martha’s children. Document development and dispose of the lead per GN 00202.020H. If we subsequently receive an application for this child and establish entitlement, process the award as a late filer under the 202(j)(1) provision.
C. Field Office (FO) procedures for delayed claims
When processing a delayed claim, we place the claimant in delayed payment status (i.e., ledger account file (LAF) code P, PB, or PT) because we cannot release any payments until we establish all factors of entitlement. When delaying a claim, we include the delayed claimant when we calculate the distribution of the family maximum.
To delay the claim, take all of the following actions:
Load a valid application in MCS using data provided by a proper applicant.
Develop for any outstanding evidence per instructions in GN 01010.410.
Enter a decision status (DEC STAT) code of “08 Delay” on the decision input (DECI) screen in MCS.
Establish a diary to follow up on the outstanding development per instructions in GN 01040.010 and GN 01010.260.
Adjudicate the claim and transfer the claim via MCS EC, if possible. If not, process via A101.
IMPORTANT: It is vital that the FO establish a control (e.g., MCS DW01 and a PC diary) so that we can process the claim to completion. These diaries serve as the only control mechanism for delayed claims. No workload management system (WMS) controls remain after we award the entitled (i.e., not delayed) beneficiaries and effectuate payment.
Although a listing of claimants in delayed status is generated in the PC, it is solely to identify claimants remaining in delayed status for unreasonable amounts of time.
1. Completing an A101 when the delayed claim cannot be adjudicated via the MCS EC process
Follow the instructions below to establish and transfer the claim via A101:
Input A101 per instructions in MSOM MS MCS 014.001;
Enter “Y” in the DELAYED CLAIMAINT field of the Beneficiary Data (BENE) screen of the A101;
Follow standard procedures for completing the A101 screens. Be sure to include the proper diary codes, notice information and explanation of development on the appropriate screens.
IMPORTANT - Include protective filer(s) in the distribution of the family maximum when calculating monthly benefit amounts (MBA) for the beneficiaries being entitled.
2. Making an evidence determination on delayed claims
After securing all required evidence, or the SSA-1045-U2 closeout period has expired, make an initial determination on entitlement. Always query the MBR and claims file before making the decision. Use the MCS DW01 and report of contact (RPOC) screens to document details of the claim.
a. Delayed claim awards
Review the evidence provided by the applicant and SSA records (i.e., MCS application), and make an initial entitlement determination for the delayed claimant. If the evidence provided supports awarding the claim, take the following actions:
Annotate the RPOC screen in MCS to explain any changes in the PIA or entitlement data for the delayed claimant or currently entitled beneficiary;
Document specific details of the delayed claimant’s entitlement on form SSA-5002. Include any relevant information (e.g., representative payee for a minor child, applicant lives in a separate household than the beneficiary, etc.) The SSA-5002 must also include a request to release benefits to the delayed claimant;
Fax a copy of form SSA-5002 to CFRMS via NDRED;
Annotate on form SSA-3601 (Claims Routing), “BA ACTION NECESSARY FOR DELAYED CLAIMANT BIC XX/BENEFIT IS NOW PAYABLE – SEE RC DATED XX/XX/XXXX IN FILE” and fax it to the appropriate PC via paperless.
b. Delayed claim denials
If after proper development, you determine that the delayed claimant is not entitled to benefits, or the applicant did not submit the requested information, deny the claim. Take all of the following actions to deny a delayed claim:
Input a manual adjustment credit and award data entry (MACADE) denial with the applicable denial code. Use miscellaneous code “064” if no other code applies. The MACADE denial will result in a MADCAP exception, which serves as an electronic transfer of the action to a BA in the PC.
Prepare and sign form SSA-5002 to document the basis for denying the delayed claim. Include instructions for the PC to adjust the monthly benefit amount (MBA) due to currently entitled beneficiaries and release the underpayment to the remaining auxiliaries or survivors on the record.
Fax form SSA-5002 under cover of form SSA-3601 to the paperless fax number of the servicing PC for action.
Fax a copy of form SSA-5002 to CFRMS via NDRED for documentation.
3. Handling situations when an MBR shows a claimant in LAF PB or PT, but a valid application was never filed
When an MBR shows a beneficiary in LAF PB (delayed claimant processing) or PT (delayed claimant terminated), and the individual or proper applicant alleges never having filed an application for benefits, it is an indication that an interim or “dummy” claim may have been loaded into MCS. In these situations, take the following actions:
Determine if the individual is responding to a closeout notice, and if benefits are due him or her;
Review all SSA records to determine if a proper applicant filed a valid application for the individual in delayed status;
Secure a valid application if the individual is due benefits and the individual or his or her proper applicant never filed a valid application. Follow processing instructions in GN 01010.140C.2. in this section accordingly;
If the individual is not due any benefits and no valid application was filed, contact the PC to remove the “dummy” claim from the MBR, and instruct the PC to release any underpayment due to other beneficiaries on the record.
D. Processing Center (PC) procedures for delayed claims
Upon receiving a diary alert, FO notification, or A101 application for a delayed claim, PC technicians should take the following actions:
Review the claims file to determine if we sent an SSA-L1045-U2 for the outstanding evidence (e.g., MCS segments, ORS, CFRMS, eView, and paper folders).
Process an award for the delayed claim if we have received all of the required evidence and can establish eligibility.
Process a denial if we did not receive the evidence within the period stated on the SSA-L1045-U2, or if the period specified in the SSA-L1045-U2 has expired.
Send the Action Control Record (ACR) to a benefit technical expert (BTE) or benefit authorizer (BA) for processing.
Provide the applicable award or denial code and remind the BTE/BA to adjust benefits for other auxiliaries or survivors on the record.
E. Special Considerations for processing delayed claims
1. Attorney fees
When an attorney is involved, attorney fees may be due if the delayed claim is approved and the maximum fee has not already been paid to the attorney. If fees are due, withhold attorney fees from the delayed claimant for the same attorney fee period as the Number Holder (NH) and provide the relevant paragraphs in the notice. Include the appropriate attorney (ATY) code on the MCS DW01 per MSOM MCS 008.004. If denying or disallowing the delayed claim, withhold the fee amount from the remaining beneficiaries, pay the attorney, and provide the appropriate notices.
2. Workers’ compensation (WC) and public disability benefits (PDB)
The addition or deletion of a beneficiary may cause the total family benefits (TFB) to become the applicable limit for offset or cease to be the applicable limit for offset. When the family composition changes, re-compute offset using the interactive computation facility (ICF) as though the new number of beneficiaries were receiving benefits for the first month we imposed or considered WC/PDB offset. See DI 52150.070 for additional guidance on how changes in family composition affect WC/PDB offset.
3. Simultaneous entitlement
Consider a combined family maximum whenever a simultaneously entitled child or other beneficiary will receive a higher benefit based on the combined maximum. When denying a delayed claim, a rate increase is due to the remaining auxiliaries or survivors on the record. For guidance on simultaneous entitlement, refer to RS 00615.770.
4. Alien tax withholding
Consider the possibility of adjustments needed for alien tax withholding. Alien tax withholding may apply to foreign delayed claims. Process these cases in accordance with the current alien tax withholding procedures in GN 05010.010.