TN 3 (09-17)
GN 02301.060 Determining the Proper Recipient of Title II Underpayment Due Deceased Beneficiary
The adjudicating office is responsible for determining the proper recipient(s) of the underpayment.
A. Determining the proper recipient
Before paying an underpayment, the adjudicating office must determine:
No living individual in a higher order of priority exists, and
Once the highest order or priority is determined, whether there are other living individuals in that category.
An individual in the order of priority to receive an underpayment cannot waive their right to the underpayment. We cannot pay a death underpayment to an individual in a lower priority category when someone in a higher priority category exists, even if that individual states that they do not want the underpayment.
If an eligible recipient dies before we complete payment, divide his or her share among the other eligible members of the same category. When there are no other recipients in the same category, issue the payment to the recipient(s) in the next lower order of priority.
B. Locating the proper recipient if the underpayment is under $50
If the underpayment is less than $50, pay the underpayment if the file contains sufficient information to determine who is entitled to receive it. Do not develop to locate the proper recipient, however. Post any unissued underpayment to the Special Payment Amount (SPA) field on the master beneficiary record (MBR).
NOTE: If the underpayment is under $1, do not pay the underpayment unless specifically requested.
C. Locating the proper recipient if the underpayment is $50 or more
If the underpayment is more than $50, the adjudicating office must first develop to determine the highest priority category in which a potential recipient exists. Refer to the chart in GN 02301.030A for the order of priority. The adjudicating office must then determine how many potential recipients are in that category. Failure to locate any such recipients could result in an incorrect payment. Any unpaid portion of the underpayment should remain in the SPA field on the MBR. Document all development on the report of contact screen.
Develop for the proper recipient of the underpayment as follows:
If there is no Title II spouse entitled to benefits on the same earnings record, develop to determine whether there was a surviving spouse living in the same household as the deceased at the time of death.
If there are no potential recipients in the first three categories of the order of priority (spouse, child, or parent), develop to determine if there are any living individuals in any of the remaining four categories, starting with the highest and going down the list.
Use direct contact to develop for potential recipients. The deceased beneficiary’s file may provide leads on possible contacts. Send a letter to the last address of record for all known individuals in the highest order of priority. Document your development via special message.
If the letters do not yield a current address for all potential recipients in the highest order of priority, withhold payment of the portion due the individual(s) we cannot locate. Post a special message to the MBR documenting that we were unable to find a current address for the recipient, and the unpaid portion of the underpayment should remain in the SPA field on the MBR.
NOTE: If we cannot locate an eligible recipient(s) in the highest order of priority, we must withhold the portion of the underpayment due the recipient(s); we cannot redistribute the payment among anyone else. We consider a payment complete when the recipient negotiates the payment.
D. Foreign claim for an underpayment
When there is a foreign claim for an underpayment due a deceased beneficiary, remember:
Do not solicit requests for payment of an underpayment from foreign claimants. However, if a foreign claimant requests payment of an underpayment, follow the instructions in GN 02301.080 through GN 02301.095.
If no underpayment is paid, post the underpayment to the SPA field on the MBR and create a special message as documentation. For example, “Death underpayment of $450 not issued to deceased beneficiary’s child, Jerry -child resides in barred country.”
E. Underpayment checks returned for incorrect address
If an underpayment check is returned for incorrect address, do not develop. If the file shows a better address, reissue the underpayment. Otherwise, post the underpayment to the SPA field on the MBR and include a special message. For example, “Death underpayment of $450 issued to deceased beneficiary’s child, Jerry was returned for incorrect address. Placed the underpayment in the SPA field – 12/25/16.”