TN 18 (11-08)

GN 02408.405 Stop-Payment Needed and the Treasury Offset Program (TOP) is Involved

A. Background

Two Treasury Offset Programs (TOP) are involved in offsetting a portion of a Title II electronic funds transfer (EFT) benefit payment: Benefit Payment Offset (BPO) and Federal Payment Levy Program (FPLP). The offset amount is sent to another agency by Treasury, and the remainder goes to the beneficiary's account at a financial institution (FI). For more information on TOP, see GN 02201.029.

This section describes what to do when the payment that was offset was not due the beneficiary for a reason other than the beneficiary's death.

B. Policy when a stop-payment is needed and TOP is involved

When a Title II EFT payment was not due for a reason other than death, and a portion of the benefit was sent to another agency through TOP, use an F-stop to recover the amount that was offset.

The Department of the Treasury (Treasury) reverses the offset and returns the money to the SSA Trust Fund from which it was issued, using code 71.

This is the only time we use an F-stop for a Title II EFT payment.

Regular overpayment procedures apply for the payment. The initial notice to the beneficiary must contain the entire amount, not only the amount after offset. Return any excess collected, regardless of the amount, to the beneficiary.

C. Procedure to determine if TOP applies

To determine whether a TOP offset was processed on the payment, check the MBR TRANS field, or the Payment History Update System (PHUS). When TOP offset applies, the following information is on the queries:

  • The TRANS field of the MBR shows “LAP-ZT PHUS - TOP OFFSET.”

  • The PHUS record shows “ZT PHUS TOP OFFSET” followed by a line that states the amount of the offset and the month the offset occurred.

When you need to know the type of offset (BPO or FPLP), go to Online Retrieval System (ORS) IESI, and look for the notice.

D. PC procedure for inputting a stop-payment

The PC uses this procedure when an EFT payment that was not due for a reason other than death was reduced by TOP offset. At present, this includes only a Benefit Payment Offset (BPO) or Federal Payment Levy Program (FPLP) offset.

When you are in a component other than the PC, notify the PC to make the input and process the overpayment.

1. Offset portion

Input an F-stop for the total amount of the incorrect payment, not the reduced amount.

RESULT: Treasury reverses the portion of the payment that went to the other agency and returns it to SSA. For payments levied through the FPLP, if the levy occurred nine months or more from the time the incorrect payment occurred, the IRS will not reverse the levied amount.

2. Remaining portion

Establish the overpayment on the beneficiary’s account, giving due process. In the overpayment notice, include the full amount of the payment before offset.

3. Beneficiary alleges not receiving payment

If the beneficiary alleges not receiving the amount after offset was applied, follow EFT nonreceipt procedures starting at GN 02406.007. Input the full amount of the payment, not the reduced amount.

4. SSA collects excess amount

If more than the total amount of the incorrect payment is received at SSA, issue a refund to the beneficiary. The FO releases Title XVI refunds via OTP (SM 01901.005) and the PC releases Title II refunds via MACADE or CPS.

NOTE: This is most likely to happen when the beneficiary returns the full amount of the payment, and then the other agency returns the offset amount through Treasury.

E. PC procedure for follow-ups on reclamations involving BPO

Direct requests for status of an FMS-133/135 with BPO involved to the Department of the Treasury’s San Francisco Regional Financial Center (SFC) at:

San Francisco Financial Center
Reclamation Section
P.O. Box 24700
Oakland CA 94623-1700

F. References

  • GN 02410.300 - Benefit Payment Offset (BPO)

  • GN 02410.305 - Federal Payment Levy Program (FPLP)

  • SM 00609.210 - Postentitlement Online System, Modernized Data Input, RSDHI and FALCON Transmissions - General Data

  • MSOM INTRANETMAMPSCDI 003.003 - SSA-4510 Non-Re