TN 16 (09-04)

GN 02406.300 Original and Courtesy or Replacement Check Cashed – Double Check Negotiation (DCN) – Potential Overpayment

A. Process

When nonreceipt is transmitted as a B-stop, “payment before status,” DT issues a courtesy disbursement check to replace the missing original. A courtesy disbursement check is issued before the status of the original check is known and bears a different check number from the original check. The bottom of the check will also have a statement “Replaces check #12345678 dated MM/DD/YY.”

An A-stop for mass loss works the same way as a B-stop – payment before status, because SSA’s system changes it to a B before sending it to DT. Therefore, if the original is cashed after a courtesy disbursement check is issued/cashed, a DCN will occur and DT will send out claims packages for both checks. DCNs in mass loss situations should be processed as any other DCN situation. See instructions below. If a C-stop (“payment after status”) is input and the original check has not been cashed, DT will issue a replacement check.

Although the beneficiary/recipient is advised not to cash both the original and courtesy disbursement, or replacement check, the original may be subsequently cashed and is a potential overpayment situation. This section explains what occurs when DT determines that the original and a courtesy disbursement or replacement check are cashed for the same benefit month.

  • Debit and credit information is posted to the PHUS, SSR, and the Q query control record when the original check is cashed, and reflects each credit given or overpayment being charged to SSA. See SM 00545.295H.4. for debit and credit codes for title II and SM 01315.200 for title XVI.

A credit will usually be posted to PHUS, SSR, and ARS when DT has refunded money in stop payment cases.

  • SSA treats the courtesy disbursement or replacement check as an overpayment and initiates recovery action, and

  • SSA sends the claimant a notice of overpayment that explains the 60-day appeal period and the right to request reconsideration by SSA, waiver, personal conference, or a different rate of adjustment. It also explains that overpayment recovery will begin in 30 days unless a request for reconsideration is received.

IMPORTANT: Double check negotiations should NOT be waived as they indicate an intention to commit fraud by falsely stating that the check was not received. Similarly, the $500 waiver tolerance does not apply because the beneficiary or claimant is not “without fault.”

B. Process - DT Action on Double Check Negotiations

When the original and courtesy disbursement or replacement check are negotiated:

  • DT debits (charges) SSA for the amount of the original check via OPAC. Any credit previously given SSA by DT based on a nonreceipt report is reversed. (See Payment Over Cancellation procedures in GN 02406.245; SM 00609.380 for DCN system processing.)

  • If the original check had not been cashed at the time of the initial report of nonreceipt, but is later negotiated, SSA treats the courtesy disbursement check as an overpayment. For title XVI, the system automatically creates an F-stop (nonentitlement) to determine the status of the replacement check before posting an overpayment.

  • For title II, DT forwards the claims package (FMS-3858, FMS-1133, and photocopy of original check) to the PC Debt Management Branch (DMB), Remittance and Accounting Section (RAS), or the Office of Disability Operations” (ODO) Remittance and Accounting Unit (RAU) for action.

  • For title XVI, DT sends the claims package (described above) to the Division of Benefit Certification and Accounting (DBCA) in Central Office. DBCA then forwards it to the FO of jurisdiction as shown on the FMS-3858 for action (see GN 02406.300D.1.).

C. Procedure - Program Center Action - Title II

1. General

The DMB, RAS in PSC 1-6 or the RAU in ODO receives debit/credit information via OPAC and claims packages for each debit/credit listed (except for C-stops where DT sends the claims packages directly to the claimant). The claims packages are forwarded to the appropriate module for the following action:

  1. Record the overpayment using the DMS, SMED screen.

  2. Send an overpayment notice to the payee providing the proposed recovery action and the right to reconsideration, waiver, personal conference, or a different rate of adjustment (or refund by installment). Refer to GN 02210.000 ff.

  3. Begin recovery of the overpaid amount following normal recovery procedures.

  4. File the blank FMS-1133, check photocopies and the FMS-3858 for future use if claimant protests the overpayment.

  5. Annotate PHUS via SSA-1257-U2 with the amount of the courtesy disbursement/replacement check (see SM 00630.210).

  6. After 60 days, if an appeal is not received or an overpayment is not protested, add the phrase, “DCN Abuse - Input as C-stop through mm/yy” in the SPMSG field. Additional DCN abuse should not occur during this period; however, if it does, change the date to reflect the new 24-month period.

    EXAMPLE: A claimant incurs a DCN in July, 2006. Because the claimant has abused the system, the warning statement should be put in Remarks/Special Message field as: "DCN Abuse - Input as C-stop through July, 2008." Any non-receipt allegations made from July 2006 through July, 2008 will be input as a C-stop; allegations beginning in August 2008 can be input as a B-stop.

2. Beneficiary Deceased Before DCN Resolved

When a DCN occurs, DT sends claims packages for both checks. Ideally, the claimant would look at the check photocopies and would either deny signing one or both of the checks or would admit to the overpayment. Since the claimant died before the DCN was resolved, the reason for the forgery determination now is to determine if an underpayment exists and to see if there is someone entitled to receive it (see GN 02301.030 – Underpaid Person is Deceased), or determine if forgery was involved. Below are several scenarios and instructions to process each:

  1. Deceased and no protest made to overpayment:

  2. Deceased and protest was alleged prior to death:

    • Do not record/post the overpayment (if not already on the record).

    • If the FMS-1133 is already filled out by the beneficiary or can be completed by an individual eligible to receive an underpayment:

    • Show the exact date of death and attach one or more specimens of the deceased beneficiary’s signature and the check photocopy. Retain copies of the claims package and documentation.

    • Return the FMS-3858 and completed FMS-1133 to DT’s Questioned Documents Branch (QDB) for their investigation to:

      Department of the Treasury
      Bureau of the Fiscal Service
      P.O. Box 51318
      Philadelphia, PA 19115–6318

    • Once QDB makes a determination, DT sends a claims disposition notice to the PC/DBCA/ODO. If forgery was established, the money will be reclaimed from the presenting bank; and

    • If appropriate, pay underpayment to person eligible to receive it. See GN 02301.001.

  3. If the FMS-1133 has not been completed by the beneficiary and there is not an individual eligible to receive the underpayment who could fill out the FMS-1133:

    • Prepare a cover note of explanation providing the date of death of the beneficiary. Indicate that no one is available to complete the FMS-1133, and that we are requesting a forgery determination.

    • Attach one or more specimens of the deceased beneficiary’s signature to the note and the check photocopy. Do not send the FMS-1133 or the FMS-3858. This will only confuse the issue and will likely result in the package being returned because it is incomplete.

    • Send the signature specimens and check photocopy to DT’s Questioned Documents Branch at:

      Department of the Treasury
      Bureau of the Fiscal Service
      P.O. Box 51318
      Philadelphia, PA 19115–6318

  4. Establish a 60-day diary for DT processing of the case. If no response is received within 60 days, prepare an FMS-3864 and follow up with DT on the disposition of the claim. CP&R can also be queried for the status/call DT’s general inquiries number at 855-868-0151.

  5. If a completed FMS-1133 was not possible and only the note of explanation with the check photocopy and signature specimens were sent to DT’s QDB (in GN 02406.300C.2.c.), DT’s response to SSA will be by letter. If forgery is determined, no reclamation can be done because a completed FMS-1133 (the instrument needed to reclaim from the bank) was not available. Therefore, if an underpayment is due an eligible survivor, the money should be paid but DT will not reimburse SSA.

  6. If there was no forgery, an overpayment exists. See GN 02201.013 for collection efforts.

3. Beneficiary Protests the Overpayment

See GN 02406.310 for information on reconsideration of an overpayment resulting from a DCN.

D. Procedure - Field Office Action - Title XVI

1. General

  1. Send the overpayment notice (i.e., the SSA 8170, SSA-8171, or SSA 8172).

  2. Prepare a file for the blank FMS-1133, check photocopies, and the FMS-3858.

  3. Make the usual system input (notice date, collect decision, etc.).

2. Recipient Deceased

See GN 02406.300C.2. and SI 02101.003 (SSI Underpayment Due – Individual Deceased – General).

3. Mass Loss

See GN 02406.700 for complete description and action to be taken when a DCN occurs.

4. Recipient Protests the Overpayment

See GN 02406.310.

5. Overpayment Not Protested/Appeal Not Filed

After 60 days, if an appeal is not filed or an overpayment is not protested, add the phrase, “DCN Abuse - Input as C-stop through mm/yy” in the RMKS field. Additional DCN abuse should not occur during this period; however, if it does, change the date to reflect the new 24-month period.

EXAMPLE: A claimant incurs a DCN in July, 2006. Because the claimant has abused the system, the warning statement should be put in Remarks/Special Message field as: "DCN Abuse - Input as C-stop through July, 2008." Any non-receipt allegations made from July 2006 through July, 2008 will be input as a C-stop; allegations beginning in August 2008 can be input as a B-stop.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0202406300
GN 02406.300 - Original and Courtesy or Replacement Check Cashed - Double Check Negotiation (DCN) - Potential Overpayment - 04/12/2017
Batch run: 04/12/2017
Rev:04/12/2017