TN 13 (11-11)

GN 01010.320 Field Office (FO) Procedures for Handling Adverse Claims

A. Procedure for handling adverse claims

An adverse claim is an award of benefits to a subsequent claimant or the reinstatement or resumption of benefits to a prior beneficiary that results in the non-entitlement or termination of an earlier beneficiary

1. Identifying adverse claims

In most cases, you learn of a possible adverse claim by reviewing the Master Beneficiary Record (MBR) or Inquiry Response (I/R) in Modernized Claims System (MCS) screens after receiving a subsequent claim.

2. Example of an adverse claim

Liz files for benefits for her child and herself (subsequent claims) on the social security number (SSN) of her disabled husband. The subsequent claimants live apart from the number holder (NH) and the mother alleges that she never divorced the NH. However, the MBR shows current entitlement of a common-law wife and stepchildren living with the NH. In this case, Liz and the child’s claim are adverse claims because their award to benefits will result in the non-entitlement of the common-law wife and the stepchildren.

B. Development of adverse claims

  • Since adverse claims result in the non-entitlement or termination of the current beneficiary, follow careful documentation and development procedures to ensure that the action is justified.

  • Develop evidence of the subsequent claimant's entitlement under the usual POMS guidelines. However, do not use assumptions or tolerances otherwise permitted in the development process. Obtain supporting evidence even though POMS provides that an assumption or tolerance may be used (e.g., “absent information to the contrary” or “when there is no reason to doubt”).

  • Do not contact the adversely affected beneficiary about the adverse claim, while developing evidence for the subsequent claim.

  • Follow the instructions in GN 00305.040 thru GN 00305.055 and RS 00202.001 when developing an adverse claim involving spouse claimants.

C. Adjudication of adverse claims

1. Award for the adverse claimant

If your development supports an award, follow the steps below:

  • Mark the claim as a non- District Office Final Authorization (DOFA) award by selecting #3 on the decision (DECI) screen, see GN 01010.027B.3;

  • Adjudicate the claim via Automated 101 (A101) as a non-DOFA and transfer it to the appropriate Processing Center (PC) for review effectuation and release of the advance due process notice. Include any other adverse claims that indicate the non-entitlement of an earlier claimant. The PC technician has the adjudicative authority to reopen a prior claimant's entitlement determination and the adjudicative authority for the initial determination on the late filer, see GN 01010.325.

2. Disallowance for the adverse claimant

If the evidence shows that the adverse claimant is not due benefits, prepare the disallowance and process under the usual DOFA procedures.

If you determine a disallowance of the adverse claimant but development raises a question about an earlier beneficiary's entitlement (i.e., a possible reopening), take the following action:

  • Prepare the disallowance for the late filer and process under the usual DOFA procedures;

  • Fax a request to the PC paperless unit to review the claims file and resolve the earlier beneficiary's entitlement question.

  • Include an explanation of the issue and any information questioning the earlier beneficiary's entitlement, and;

  • Copies of any pertinent evidence obtained in the adverse claim must be stored in the share process or the Non-Disability Repository (NDR).

D. Subsequent FO actions when adverse claim is allowed

1. Claimant Protests Adverse Claim

If after receiving the advance due process notice, the adversely affected beneficiary contacts the FO within the 30-day protest period, advise the beneficiary of the following:

  • The right to make a formal written protest;

  • The right to have benefits continuing; and

  • The possibility of an overpayment (O/P) resulting if the