TN 18 (11-08)
GN 02408.610 Overview of the Reclamation Process for Title II and Title XVI EFT Payments
Reclamation is the process Treasury uses to reclaim Federal benefit payments issued after death. For check reclamation procedure, see GN 02408.301.
A. General – Reclamations
1. Payments issued after death
For Title II, a payment for the month of death or later is not due and must be reclaimed. For Title XVI, a payment for any month later than the month of death is not due and must be reclaimed.
For a description of the exception of early payment delivery dates for Title II and Title XVI, see GN 02408.650E.
2. Responsibility for reclamations
The Department of the Treasury (DT) is responsible for reclaiming erroneous Electronic Funds Transfer (EFT) payments that were sent by SSA and other Federal agencies to U.S. financial institutions (FI) after the death of the beneficiary/recipient.
3. SSA sends reclamation request to DT
SSA sends a request for reclamation to DT (an E-stop), either automatically or by manual input, when Title II or Title XVI EFT payments have been sent to the FI after the death of a beneficiary/recipient.
4. 120-Day rule
The request must arrive at the FI no more than 120 days after SSA learns of the death and sends the death notification entry (DNE). The FI can protest to DT if the reclamation was sent by SSA more than 120 days after the DNE.
For the process of automated reclamation requests to DT, see GN 02408.615.
For manual requests, see GN 02408.620.
5. Three-year rule
Effective January 2, 2008, the Department of the Treasury (DT) imposed a three (3) year time limit for Federal agencies to submit final debits (i.e., ACH reclaims) of a Financial Institution's (FI) Federal Reserve account via the FMS-135, Request for Debit. An ACH reclaim represents a debit against an FI for certain liability on payments disbursed after the death of a beneficiary. Agencies have three years from the date of the FMS-133, Notice of Reclamation, to submit ACH reclaims via the FMS-135 to DT's Philadelphia, Kansas City and San Francisco Regional Financial Centers. Items older than three years are rejected and not processed.
6. Six-year rule
The Green Book states the FI is not liable for any post-death payments made more than six years prior to the date of the notice of reclamation, except under the following circumstance:
“If the account balance at the time the FI receives the notice of reclamation exceeds the total amount of all post-death payments made by the agency during such six-year period, this limitation shall not apply and the FI shall be liable for the total amount of all payments made, up to the amount in the account at the time the FI receives the notice of reclamation and has had a reasonable opportunity (not to exceed one business day) to act on the notice.”
B. Process when DT responds to SSA's reclamation request
DT matches the information in the reclamation request (E-stop) against its records and does the following:
When the requested payment matches DT's records and has not been returned, DT returns a code 01 to SSA. For Title II, the 01 is posted as part of the SF-1184 information on the Payment History Update System (PHUS) under event code 070. For Title XVI the 01 is posted on the UPTQ screen (see Treasury Status Query (UPTQ) MSOM BUSSR 003.020).
DT then sends the FI a form FMS-133, Notice of Reclamation, that contains the date, payment amount, SSN, and other payment identification information for all payments made after death that are subject to reclamation. This form is found in the Reclamations section of Treasury's “Green Book,” at www.fms.treas.gov/greenbook .
DT informs SSA when the requested payment has already been returned. For Title II, disposition code 04 is posted on PHUS as part of the SF-1184 information (PHUS event code 070), and a “Returned Check” entry gives the payment information. For Title XVI, disposition code 04 is posted on UPTQ as part of the Stop-Payment information, and Payflag 1 of the PMTH field on the SSR has a slash (/), A, B, C, D, J, K, L, M, S, T, or U for that payment, depending on the type of payment and whether it is returned by the FO, Treasury, or both.
When the requested payment information does not match DT's records, DT rejects the request and sends a disposition code 07. (This code is often the result of an input error at SSA.) For Title II the response is posted on PHUS under event code 070. For Title XVI the UPTQ shows “07 – NO PAYMENT ISSUED.”
SM 00609.610 - for DT's Title II disposition codes.
MSOM BUSSR 003.020 - for DT's Title XVI disposition codes.
SM 00624.010B - for “returned check” reason codes shown on PHUS.
C. Process when an FI responds to a notice of reclamation
1. All/Partial funds are available
The FI returns any funds that are available. The FI completes the FI portions of the FMS-133 and sends the form to DT. For information about the FI's possible responses, see GN 02408.625.
If only part of the funds remain in the FI, the FI returns the partial funds AND provides the name and address of the last withdrawer of the funds on the FMS-133 for contact by SSA.
When the FI returns the funds, DT returns them to SSA. A Title II return is shown as “009 EVENT RET CHECK” on PHUS. A Title XVI return is shown as a slash (/), S, T, or U in Payflag 1 on the SSR. For more information on erroneous EFT payment returns from FIs and individuals, see GN 02408.665 and GN 02408.670.
2. No funds are available
When the account does not contain any funds at all, the FI must return the FMS-133 to Treasury. The FI must provide the name and address of the last withdrawer on the FMS-133. If the FI does not return a completed FMS-133 timely, DT debits the account of the FI or its correspondent bank at the Federal Reserve Bank, and returns the funds to SSA. For the amount of the FI's liability, see GN 02408.625.
3. FI sends “120-day” protest
The FI protests to DT if it believes that we sent the reclamation request more than 120 days after knowing of the death. The 120-day period is usually counted from the date the DNE was sent to the FI. However, in some cases the FI protests because it believes we had the death information before that time.
4. DT responds to FI's 120-day protest
When the FI protests to DT because the reclamation arrived more than 120 days after the FI believes we learned of the death, DT notifies us of the protest. After examining our response to the protest, DT determines whether we sent the request more than 120 days after learning of the death.
When DT determines that we sent the request too late, the money goes back to the FI, if it has already been reclaimed. If DT determines that we sent the request within 120 days, the reclamation process continues.
D. Process when an FI does not respond to a notice of reclamation,
When the FI does not return the funds or respond to DT within 30 days, DT sends a “Follow-up to Notice of Reclamation,” Form FMS-2942, to the FI. The FI then has 30 days from the date of the follow-up to return the funds or send a completed Notice of Reclamation to DT.
When the FI does not respond after 30 days from the date of the follow-up, DT debits the account of the FI or its correspondent bank at the Federal Reserve Bank for the full reclamation amount, and returns the funds to SSA. For the amount of the FI's liability, see GN 02408.625.
SM 01315.134 - When to Initiate a Stop-Payment Action
SM 01315.136 - When the SSI System Automatically Generates Stop-Payment Requests
GN 02408.900 - Recovery of Title II IDD Payments Improperly Issued After Death of Beneficiary