TN 14 (04-00)
GN 02406.245 Payment Over Cancellation (POC)/Credit Reversal
A. PROCESS - DT
By keying in specific stop codes, SSA requests DT to either issue a courtesy disbursement check prior to obtaining status of the original (B-stop) or investigate the status first and issue a replacement check if the original is still uncashed (C-stop). Refer to GN 02406.125 for a description of the nonreceipt codes on POS screens for title II inputs and their relationship to the stop codes used by SSA and DT. The following description of these stop codes also explains the circumstances that may lead to a payment over cancellation (POC).
When the FO/PSC/TSC transmits a stop code of “B” (NRT = 1 or NC code B), the RFC will screen the claim and issue a courtesy disbursement if a check for the amount reported was issued and if the original check has not been returned. The claim is then sent to CCB for processing. If the check has not been presented for payment (outstanding), CCB cancels the original check and uses the “credit” to fund the courtesy disbursement check.
When the FO/PSC/TSC transmits a stop code of “C” (NRT = 2 or NC code C), the claim goes to the RFC first to determine if the original check was returned, if the check was issued, and to provide the check number and symbol. Then the RFC sends the claim to CCB who investigates to determine if the original check has been cashed and presented to DT for payment. If the check has not been negotiated, CCB cancels the original check, and notifies the RFC to issue a replacement check. The “credit” for the cancelled original check is used to fund the replacement check.
When the FO/PSC/TSC transmits a stop code of “G” (NRT = 4 or NC code G) and the original has not been cashed, a credit is returned to SSA. The check can be reissued, if still due.
2. Mass Loss
If the Mass Loss procedure applies, the FO/PSC/TSC will transmit a stop code of “A” (NRT = 3 or NC code A) for title II and title XVI checks. When the “A-stop” is transmitted, DT will issue a courtesy disbursement if the check has not been returned to the RFC. The claim is then sent to CCB for processing. If the check is outstanding, CCB cancels the original check and returns credit to SSA. (See GN 02406.700 for additional information about mass loss.)
3. How a Payment Over Cancellation/Credit Reversal Occurs
In the situations above, the original check has been cancelled by DT and replaced by either a courtesy disbursement or replacement check. If the original check is subsequently cashed and presented to DT for payment, DT will charge SSA for the amount of the original check, causing a “payment over cancellation.” Two separate claims packages are then created for the original and the replacement or courtesy check for examination by the payee.
B. PROCESS - SSA
When DT cancels the original check, issues a courtesy disbursement check, and the original is later cashed, this is a possible payment over cancellation (POC, as well as a double check negotiation [DCN]). See GN 02406.300 for additional information about DCNs.) The following events take place when this occurs:
DT debits SSA when the original check was cashed after being replaced.
SSA's system posts a debit on PHUS for title II and a “U” (credit reversal for either the original or replacement; dependent on the circumstances and timing of the DT transactions) in payflag 3 for title XVI.
REACT generates an alert for the PC technician to input an F-Stop on the courtesy disbursement or replacement check.
When the DT's final disposition for the stop payment is posted to the PHUS record, REACT takes the appropriate action. If the courtesy disbursement or replacement check is uncashed, no further action is taken by REACT. If the check has been cashed, a DCN overpayment now exists and REACT establishes the overpayment on ROAR and the MBR.
REACT also generates an alert for the PC technician to send an overpayment notice to the beneficiary about the DCN overpayment.
1. If nonreceipt input was a B-stop:
If a B-stop generated the courtesy disbursement check, for title II the claims package goes to the PC from DT; for title XVI cases, the claims package goes to the FO via DBCA for routing to the claimant.
See GN 02406.310 for procedures if claimant denies cashing one or more of the checks and requests reconsideration of the overpayment.
2. If nonreceipt input was a C-stop: