TN 22 (04-12)
GN 02610.005 Introduction to Title II/Title XVI Windfall Offset
20 CFR 404.408b
A. Background on windfall offset
Windfall offset affects a claimant and couples who are concurrently entitled and due retroactive payments from Supplemental Security Income (SSI) and Retirement, Survivors, and Disability (title II) benefits for the same months. The windfall offset prevents a claimant from receiving more benefits retroactively than he or she would have received if we paid all benefits in the months they were due. Claimants entitled to both title II and title XVI benefits should receive their title XVI benefits first to retain eligibility for Medicaid benefits.
1. Windfall offset original law
Effective for title II claims adjudicated after 06/30/81, the law prevents a windfall to claimants concurrently entitled to both title XVI and title II retroactive benefits for the same period. Retroactive title II benefits resulting from an initial award are reduced by the amount of title XVI that would not have been paid if the title II had been paid when due.
2. Windfall offset amendments
Effective 02/01/85, Congress amended the law to permit reduction:
of either title XVI or retroactive title II benefits;
of retroactive title II benefits resulting from a reinstatement or a title II postentitlement event when administratively feasible, and
to take into account retrospective monthly accounting (RMA) to eliminate a two-month windfall that was caused by RMA. For the policy on RMA, see SI 02005.001.
3. Claims processed 09/08/95 or later
We apply windfall offset to the retroactive title II benefits even if we pay the title II current monthly accrual (CMA) before the title XVI benefits. The system will control the release of the title II retroactive benefits until after we pay the title XVI benefits.
B. Definition of windfall offset terms
You must have an understanding of windfall offset terms to understand the windfall offset process.
For a list of the types of benefits subject to offset, see GN 02610.014.
1. Windfall offset
The reduction of retroactive title II or title XVI benefits prevents a windfall. A windfall occurs when the combined title XVI and retroactive title II benefits exceed the amount of benefits due if the title II benefit had been paid when due rather than retroactively.
2. Retroactive title II benefits
Benefits paid in a month later than the month or months they were due; i.e., a prior month accrual (PMA). For information about the treatment of retroactive title II benefits in the PMA month, see SI 02006.201.
3. Retroactive SSI benefits
SSI benefits, including any federally administered State supplementation that has accumulated for any month after the calendar month they are due.
4. Title II benefits paid when due
Benefits paid in the month after the month the person is entitled; i.e. current month accrual (CMA).
EXAMPLE: The title II benefit due for February paid in March.
5. Offset period
The offset period is the maximum period that retroactive title II benefits could affect title XVI payments. For determining the offset period, see GN 02610.022.
6. Title II offset
The reduction of retroactive title II benefits to prevent a windfall. It is the amount of title XVI benefits that would not have been paid had the title II benefits been paid timely.
7. Title XVI offset
The reduction of retroactive title XVI benefits to prevent a windfall. It is the counting of retroactive title II benefits if paid on time. For instructions for processing a title XVI offset, see SI 02006.205B.
8. Excess offset
The total offset computed for the record exceeds the amount of title II offset withheld. For instructions on processing excess offset, see GN 02610.050F and SM 01320.206D.
9. Negative offset
When we would have paid more title XVI if we paid the title II amount timely for one or more months in the offset period. The new federal amount due based on the offset computation (FAM/SAM) results in a higher payment amount than the due amount (FAM/SAM) on the SSID screen of the Supplemental Security Record (SSR). For instructions on processing a negative offset, see SI 02006.010A and SM 01320.206.
10. Windfall due amount
The amount of title XVI payment the recipient would have received if we paid the title II retroactive payments when due.
11. Automated computation
An automated computation occurs when the system can determine, compute, and post the windfall offset amounts to the Supplemental Security Record (SSR) for all months in the windfall period.
12. Manual computation
When the system cannot determine the offset amounts for one or more months in the windfall offset period, the field office (FO) must manually compute the offset amounts. The FO must post the results from the manual offset computation to the SSR. For instructions how to manually compute offset amounts, see GN 02610.035.
13. Postentitlement (PE) events
Any title II event that occurs after title II entitlement and affects the amount of title II benefits previously paid. For information about postentitlement events and their effect on windfall offset, see GN 02610.016B.
14. Title II reinstatement
The resumption of title II benefits following a suspension or termination. For specific conditions where windfall offset applies to reinstatements, see GN 02610.016B.
15. Countable Income (CI)
The amount of income used in the title XVI monthly payment computation to determine the SSI amount due.
16. Noncountable income (NCI)
The title II benefits payable for months in the windfall-offset period after the offset amount is subtracted from the title II retroactive benefits that accrued for months in the windfall offset period. For instructions how to compute NCI in the windfall offset period, see GN 02610.042.
17. Interim Assistance Reimbursement (IAR)
We may reimburse a State for assistance the State provided to a claimant in the form of cash or through vendor payments to meet his or her basic needs. Apply windfall offset to all retroactive months including the amount used to reimburse the State. For information about IAR, see SI 02003.003.
18. Fee agreement
A written statement signed by the claimant and the appointed representative specifying the fee the representative expects to charge and collect and the claimant expects to pay. For an overview of the fee agreement process, see SI 02006.200B.3.
19. Fee petition
A written statement, signed by a claimant’s representative, requesting the fee the representative wants to charge and collect for services. For information about the fee petition process, see SI 02006.200B.2.
20. Subsequent award
A subsequent award results in additional title II benefits becoming due because of an application (e.g. dual entitlement, retirement benefits (RIB) to disability benefits (DIB), widow(er) (WIB) to RIB, child (C1) to disabled claimant (HA).
21. Amended award
Corrects or changes a material factor of entitlement of a prior award. For instructions for recomputing windfall offset when an amended award changes the title II date of entitlement or title II amount, see GN 02610.050B.
22. Electronic record of manual title II computation (e4345)
The e4345 is a web-based application created to facilitate communication between Program Services Centers (PSCs) and FOs on windfall offset cases requiring a manual computation.