Effective Dates: 08/25/2023 - Present Previous | Next

TN 102 (08-23)

GN 02602.025 Priority in Applying Provisions Affecting Benefit Payments

CITATIONS:

A. Policy – General

1. General

There is a required priority order for applying terminations and nonpayment, reduction, deduction, and withholding events to monthly Title II benefit amounts. The priority order is based upon provisions established by laws, regulations, and SSA policy.

2. Priority order

Generally, we apply the priority order as follows:

•

Withhold benefits due to questionable entitlement;
•

Termination of entitlement;
•

Nonpayment events, and
•

Deductions, reductions, and other withholdings.

EXCEPTION: A different priority order is followed when representative fees and alien tax applies and for withholding SMI premiums, see GN 02602.025C.

IMPORTANT: When you are unable to locate a beneficiary who is in S8 or S08, to update the reason for non-payment follow the procedure in GN 00504.150D.1.

B. Procedure – Priority list

1. Termination/Suspension or Deduction Event

Follow the priority list as shown to accurately determine monthly benefit amounts:

LAF Code	Reason for Termination/Suspension or Deduction Event
T/TA/TJ	Claim withdrawal terminations
T9	Not defined; Erroneous DOD death
T1	Death
T9	Aged beneficiary in long-term suspense for at least 7 years
T8	Primary no longer disabled-auxiliaries terminated
T8	Child no longer disabled-mother/spouse terminated
T2	Auxiliary terminated due to death of primary
T3	Marriage/divorce/remarriage/annulment/stepchild termination.
T4	Child in Care Spouse terminates- Child attains age 16 and not disabled/ child age 18 and not FTS and not disabled
T6	Child no longer FTS or child disability terminates; mother terminated for death or marriage of last remaining child
T5	• Entitled to benefits on another claim • BOAN not determined-Refused enumeration
S9	Withhold benefits pending verification of death
S9	Trial Work Period Fraud (RFST-TWPFRD)
S4	• No Child-in-care • Young spouse Attains Age 62 in Same Month that the Last Child of the NH Attains age 16 (Young Spouse not born on the 1^st or 2^nd of the month)
S9	• Withhold benefits pending withdrawal of claim • Withhold benefits for auxiliaries or survivors in delayed status pending claims development
SD	Withhold benefits for technical dual entitlement – Disability family maximum provision has reduced MBA to zero
S8	Withhold benefits pending payee development
S6	Withhold benefits because check returned for better address
S0	Withhold benefits pending CDR
S9	Withhold benefits pending CDB determination
S9	Withhold benefits due to whereabouts unknown
S9	Withhold benefits for failure to submit postadjudicative development (Recontact form, student enforcement, and foreign enforcement forms)
S9	Withhold benefits for a dually entitled widow. A/B benefits currently are being paid on her own record. Widow's benefits are withheld pending the certificate of election for reduced widow's benefits (CERTEL)
S9	• Withhold benefits for spouse (age 62-FRA) whose last entitled child on the record has attained age 16 and is not disabled; or • A widow(er) who has attained FRA and the number holder was fully insured (these include both development for certificate of election (CERTEL) and age (DEVAGE)).
SJ	Alien outside U.S.
SK	Deportation/removal from the U.S.
SL	• Barred Country • Withhold benefits for subversive activity conviction
S7	• DIB or DAC Blind engaging in SGA • Prisoner (RFST: PRISON, MENTAL, or PREDTR) • EPE SGA suspension • Suspend Prouty barred country, receiving another public benefit, receiving GPO
S9	Fugitive Felon Suspension (RFST – FUGFEL)
SW	Receipt of WC/PDB
SH	Receipt of GPO
S1	Foreign Work
S2	Beneficiary worked in the U.S.
S3	Primary beneficiary worked in the U.S.
S9	Beneficiary Not U.S. Citizen or Not Lawfully Present in U.S.

2. Withholdings/ Deductions from the Retroactive S9 Suspension Period

In these situations, follow the priority list as shown to accurately determine monthly benefit amounts:

LAF Code	Withholdings, Deductions from the Retroactive S9 Suspension Period
S9	• Administrative Sanctions • Apply dollar down rounding • Withhold Maritime Tax • Compute and withhold Title II/Title XVI Offset • Compute Overpayment • Compute penalty • Apply household netting • Withhold overpayment • Withhold penalty • Compute representative’s fee (attorney and nonattorney) in fee agreement cases and withhold anticipated attorney’s fee. • Withhold alien tax • Withhold retroactive alien taxes
S9	Withhold supplemental medical insurance premiums in this order: • B Premiums • D Premiums • C Premiums • Withhold benefits because monthly benefit amount is less than $1.00 (LESSDO SMI cases) NOTE: Beginning with benefits for December, 2006, the system will automatically pay a monthly benefit amount less than $1.00 just as it pays all other benefits.
S9	• Apply garnishment • Apply IRS levy • Apply waiver of benefits • Withhold voluntary tax (provision was effective with the December 1996 monthly check paid on January 3, 1997) • Legislation • Miscellaneous • Voluntary DRCs

LAF Code

Withholdings, Deductions from the Retroactive S9 Suspension Period

•

Administrative Sanctions
•

Apply dollar down rounding
•

Withhold Maritime Tax
•

Compute and withhold Title II/Title XVI Offset
•

Compute Overpayment
•

Compute penalty
•

Apply household netting
•

Withhold overpayment
•

Withhold penalty
•

Compute representative’s fee (attorney and nonattorney) in fee

agreement cases and withhold anticipated attorney’s fee.

•

Withhold alien tax
•

Withhold retroactive alien taxes

Withhold supplemental medical insurance premiums in this order:

•

B Premiums
•

D Premiums
•

C Premiums
•

Withhold benefits because monthly benefit amount is less than $1.00 (LESSDO SMI cases)

NOTE: Beginning with benefits for December, 2006, the system will automatically pay a monthly benefit amount less than $1.00 just as it pays all other benefits.

•

Apply garnishment
•

Apply IRS levy
•

Apply waiver of benefits
•

Withhold voluntary tax (provision was effective with the December 1996 monthly check paid on January 3, 1997)
•

Legislation
•

Miscellaneous
•

Voluntary DRCs

C. Procedure – Priority list for combinations of specific events

Follow these instructions when a combination of certain specific events occurs:

1. Representative fees

a. Title II/Title XVI Offset applies

Compute the title II/title XVI offset without regard to the attorney fee. The amount of the potential direct payment for an attorney representative's fee and, in fee agreement cases, the authorized representative's fee, must be computed and withheld:


Before
• Computing and withholding title II/title XVI offset,
• Computing any overpayments (prior or current),
• Alien taxes (current and retroactive),
• Deducting a prior overpayment; but
After
• Computing a penalty,
• Applying household netting,
• Withholding a current overpayment,
• Withholding a penalty.

b. Overpayment applies

•

Determine the amount of the current overpayment which occurred during the retroactive period included in the current award.
•

Determine the amount of the prior overpayment which occurred in an entirely distinct period which preceded the period included in the initial award, e.g., overpayments that occurred during a prior period of entitlement.
•

Compute and withhold the amount of the potential direct payment for an attorney representative's fee and, in fee agreement cases, the authorized representative's fee:


Before
• Computing any overpayments (prior or current),
• Alien taxes (current or retroactive),
• Deducting a prior overpayment; but
After
• Computing a penalty,
• Applying household netting,
• Withholding a current overpayment,
• Withholding a penalty,
• Applying Garnishment, and
• Applying an IRS levy

c. Alien tax applies

The amount of potential direct payment for an attorney representative's fee and, in fee agreement cases, the authorized representative's fee, must be computed and withheld before computing alien taxes; but after applying garnishment and applying an IRS levy.

2. Alien tax applies

a. Title II/Title XVI Offset applies

Compute the alien tax:


Before
Computing and withholding title II/title XVI offset; but
After
• Computing any overpayment,
• Computing a penalty,
• Applying household netting,
• Withholding an overpayment, and
• Withholding a penalty.

b. Unpaid Maritime tax applies

Compute the alien tax:


Before
• Withholding unpaid maritime taxes
• Computing and withholding title II/title XVI offset, but
After
• Computing any overpayment
• Computing a penalty
• Applying household netting
• Withholding an overpayment, and
• Withholding a penalty.

3. SMI premiums

Supplemental Medical Insurance (SMI) premiums are withheld from monthly benefits in the following order: (1st) B premiums; (2nd) D premiums; and (3rd) C premiums. When a combination of certain specific events occurs, withhold SMI premiums:


Before
Withholding any overpayment, but
After
• Withholding a penalty,
• Computing alien tax,
• Computing retroactive alien taxes • applying an IRS levy
• Computing a representative’s fee,
• Withholding alien tax, or
• Retroactive alien tax.

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0202602025

GN 02602.025 - Priority in Applying Provisions Affecting Benefit Payments - 08/25/2023
Batch run: 08/25/2023
Rev:08/25/2023

Social Security

Program Operations Manual System (POMS)

GN 02602.025 Priority in Applying Provisions Affecting Benefit Payments

A. Policy – General

1. General

2. Priority order

B. Procedure – Priority list

1. Termination/Suspension or Deduction Event

2. Withholdings/ Deductions from the Retroactive S9 Suspension Period

C. Procedure – Priority list for combinations of specific events

1. Representative fees

a. Title II/Title XVI Offset applies

b. Overpayment applies

c. Alien tax applies

2. Alien tax applies

a. Title II/Title XVI Offset applies

b. Unpaid Maritime tax applies

3. SMI premiums