TN 3 (09-17)
GN 02301.075 Benefit Authorizer Payment Instructions for Title II Underpayment Due Deceased Beneficiary
A. Benefit authorizer (BA) responsibility
The BA (or equivalent) is generally responsible for processing underpayments. When the BA discovers an underpayment and the evidence clearly identifies the proper recipient(s) of the underpayment, the BA pays the underpayment to the recipients(s). Otherwise, the BA should develop for a proper recipient per GN 02301.060 and GN 02301.075B, or refer the case to a claims authorizer (CA) or equivalent, if necessary.
NOTE: The BA should issue the underpayment by direct deposit, if available. If direct deposit is not available, issue the underpayment by check. We are not required to issue death underpayments by direct deposit, per GN 02402.005.
B. BA processing instructions for underpayments due deceased beneficiary
1. Determine if an underpayment exists
To determine if an underpayment exists, check to see whether:
an accrued benefit amount was not paid,
a check(s) representing correct payment to a deceased beneficiary was not negotiated, or
an issued payment was returned or not received.
For evidence of an outstanding payment that may be due the deceased, see Returned Check Action Program (REACT) output as proof of an outstanding check return. If there is no REACT output, query the Payment History Update System (PHUS) or search the Treasury Check Information System (TCIS) for a returned check or non-receipt of direct deposit. Pay the underpayment if evidence shows no payment, returned payment, or that a check was issued but not negotiated.
2. Payment to a surviving spouse in the first order of priority
An examination of the claims file may indicate the existence of a surviving spouse in the first order of priority, that is, a surviving spouse who was entitled to a monthly benefit on the same earnings record as was the deceased beneficiary for the month of death, or who was living in the same household (LISH) with the deceased beneficiary at the time of death. For more information about LISH, see RS 00210.035.
a. Spouse entitled on same earnings record
A surviving spouse qualifies for payment in the first order of priority if they were entitled to a monthly benefit on the same earnings record, as was the deceased beneficiary for the month in which the beneficiary died. The BA can pay an underpayment, regardless of the amount, to a surviving spouse in this category.
b. Spouse living in the same household (LISH)
A surviving spouse also qualifies for payment in the first order of priority based on LISH. The BA can pay an underpayment of three months’ monthly benefit payable (MBP) or less to a surviving spouse based on LISH if:
If the underpayment exceeds three months MBP, or if it appears that the surviving spouse is entitled to the underpayment based on LISH but the evidence is not conclusive, the BA refers the case to a CA for development under RS 00210.035.
3. Payment to other relatives
If the file does not show that there is a surviving spouse in the first order of priority, the BA can pay the underpayment to an eligible recipient(s) in categories 2 through 6 of the order of priority list in GN 02301.030 if:
the evidence shows there is no one in a higher class;
for children and parents, it is known how many there are in that class; and
for categories 4 through 6, the underpayment equals three months’ MBP or less.
For information on the evidence needed to receive a Title II underpayment due a deceased beneficiary, see GN 02301.055.
NOTE: For categories 4 through 6, if the underpayment exceeds three months’ MBP, refer the case to a CA for any necessary development and authorization of payment.
After we determine the proper recipient(s) of the underpayment, take the following actions to pay the underpayment:
add it to the survivor award if an automatic conversion is appropriate; or
make payment through the Single Payment System (SPS) if an entitlement conversion has been done or there is no survivor award for processing. The payee legend for SPS should read, “(recipient's name) on account of (deceased's name), deceased.”
If the survivor was entitled to benefits in the month of death, but is not entitled when we discover the underpayment, verify the current address and pay the underpayment to the survivor accordingly.
Use the recipient’s SSN when using SPS to pay the underpayment to a non-beneficiary. For more information about SPS, see SM 00834.001B.
4. Payment to a legal representative
We can pay a legal representative only if it is clear that no one in a higher category in the order of priority exists. If that is questionable or if the legal representative is seeking payment under a small estate statute, refer the case to a CA for payment authorization.
If making payment to a legal representative, see SM 00805.040B.1.c.
C. Return of conserved funds to the estate of the deceased beneficiary
Conserved funds do not constitute an underpayment. However, we will return those funds to the estate of a deceased beneficiary. For more information, see GN 02301.001B. If the beneficiary dies and there is a representative payee who is permitted to continue to administer conserved benefits, see GN 00603.100B.2.
NOTE: If we receive conserved funds for a deceased beneficiary, do not return these funds to the former payee. For more information, see GN 00603.055B.5.