TN 6 (08-07)

GN 04030.070 Administrative Finality - Effect of Administrative Finality on Subsequent and Prior Claims

A. Background

Terms such as “prior,” “earlier,” “existing,” “new,” “current,” “subsequent,” and “later claims,” etc., refer to claims filed in both of the following situations:

  • Claims filed by the same or different person for 2 or more different periods of entitlement on the same SSN.

    EXAMPLE 1: Claimant was entitled to disability benefits 06/1997. His benefits terminated 06/2002. (Prior or earlier claim.) Claimant files new (subsequent, current or later) claim for DIB on the same SSN in 08/2006. Claimant is found to be entitled to DIB with an onset of 07/2006.

    EXAMPLE 2: NH, wife and children were entitled to benefits. When all children had turned age 16, wife's benefits were terminated. (Prior or earlier claim.) NH later died. When wife turns age 60 she files for widow's benefits on the same SSN. (New, subsequent, current or later claim.)

  • One period of entitlement with one or more different claims filed on behalf of different beneficiaries at different times.

    EXAMPLE 3: NH and 2 auxiliaries are entitled to benefits. (Prior, earlier or existing claims.) A third auxiliary later files for benefits. (New, subsequent, current or later claim.)

B. Policy — Claims filed on the same earnings record

1. Effect of Administrative Finality on Subsequent Claims

If a new claim for benefits is filed on the same earnings record as an earlier claim, when we adjudicate the new claim we are not bound by the findings of fact that were made in a determination or decision on the earlier claim.

However, res judicata, as defined in GN 04040.010, may be applicable.

EXCEPTION - Insured Status

  • A finding in connection with an earlier claim that a person has insured status can only be revised for a later claim if the first initial determination can be reopened based on GN 04001.010.

  • Although a finding of insured status may not be reopened in a subsequent claim if none of the conditions discussed in GN 04001.010 applies, SSA may revise the amount of the PIA with respect to the subsequent claim based on the earnings (if any) which are still posted to the earnings record. (This means if no earnings are posted, the PIA is zero.)

EXAMPLE

Mr. Wilson filed for RIB on 03/10/98. A E/R showed he had 40 quarters of coverage. He was awarded RIB of $675.70 on 06/5/98. This rate was increased through subsequent conversions/COLAs to $755.20 effective December 2002. He died on 03/12/03 and his widow filed for benefits and questioned the correctness of his benefit amount. A certified E/R was obtained which showed that Mr. Wilson had only 39 QCs. Because of the lapse of more than 4 years, SSA cannot revise the finding of insured status, but survivors' benefits should be computed based on the correct earnings record. In claims processed with initial eligibility before 12/81, the benefit would be determined based on the guaranteed minimum PIA (see RS 00605.070). For claims processed with initial eligibility after 12/81, the benefit would be determined based on the actual earnings with no guaranteed minimum (see RS 00605.100).

However, if Mr. Wilson had acquired an additional QC after the lifetime of his application, thus giving him an insured status, the amount of the PIA should be computed as if the widow's application were the first application filed after considering the DIB Guarantee PIA provision (see RS 00605.035).

The computation of the PIA will depend on the facts in a particular case (see
RS 00605.000).

NOTE: Refer to GN 04030.070B.4. for information regarding the effect of a DIB guarantee PIA on a subsequent claim.

a. Example - Prior Entitlement Terminated; New Claim Later Filed By Same Claimant

A woman was paid benefits as a young wife from 12/95 until 12/2001. Her benefits terminated when her youngest child reached age 16 in 12/2001. When she later files as an aged spouse in 12/2006 we discover that she should never have been entitled as the wife of the NH since she does not meet the relationship requirements. Since none of the rules for reopening apply, the determination on her earlier claim for wife's benefits cannot be revised. However, even though we previously made a determination which found that she was entitled to benefits as the wife of the NH, we are not bound by the erroneous finding of fact made in that determination when we adjudicate her later claim in 12/2006. We can deny her aged spouse's claim.

b. Example - Auxiliaries Erroneously Entitled; New Claimant Files

B2 and C1 were awarded benefits in 03/2002. C1 was entitled as a stepchild based on the determination that B2 was married to the NH. A current claim is filed by B2 for a different stepchild, C2 in 06/2006. In the course of developing this claim, it is shown that B2 was never married to the NH. The prior determination of benefits made in 03/2002 for B2 and C1 cannot be reopened, i.e., it was more than 4 years ago and none of the special situations in GN 04020.001 exist. SSA will continue to pay benefits to them. However, the current claim by C2, filed in 06/2006, as a stepchild will be denied because the only way C2 can be entitled is as a stepchild. Since B2 was not married to the NH, C2’s claim must be denied. SSA cannot take benefits away from B2 and C1 because the rules of administrative finality preclude it. When B2's benefits are terminated due to C1 attaining age 16, if B2 again files for wife's or widow's benefits on this record, her claim will be denied unless she later marries the NH.

c. Example - Incorrect Computation; New Auxiliary Files

When the NH is entitled in 01/2002 we compute his PIA and benefit amount incorrectly. More than 4 years later a child files for benefits in 02/2007. The adjudicator notices the error. The child should be paid based on the correct PIA rather than on the incorrect rate protected by the rules of administrative finality for the NH. For additional information and examples, see RS 00615.754. See GN 04030.070B.4 about the effect of a DIB Guarantee PIA on a subsequent claim.

NOTE: When there is one or more claimants on a record being paid based on an incorrect PIA that is protected by the rules of administrative finality and other claimants are being paid based on the correct PIA, change the MBR PIA to the lower correct PIA effective with the date of entitlement of the new claimant. In addition, prepare a special message to show the PIAs that were used to compute the benefits for the protected claimants and post the Administrative Finality code to the MBR.

EXCEPTION WEP PIA: This policy does NOT apply to the imposition of a WEP PIA because it applies strictly to computation factors and a decision to impose WEP is not a computation factor (RS 00605.405). Therefore, it is a separate determination made independently of the PIA computation and should be treated differently when a child later files for benefits. Consequently, when a new auxiliary files for benefits, the child’s benefit should be based on the PIA being used to pay the NH unless an appeal is taken to correct the error. For additional information regarding WEP and administrative finality see GN 04030.100 – Reopening When Windfall Elimination Provision (WEP) is Involved.

2. Effect of Administrative Finality on Prior Claims

If a new claim is filed on the same earnings record as a prior claim, when we adjudicate the new claim we can apply the procedures in GN 04001.010 to see if we can reopen the determination on the prior claim.

3. RIB LIM

In cases where the deceased NH's rate was incorrectly computed and a subsequent widow's rate is dependent on the retirement insurance benefit limitation (RIB LIM), the RIB LIM should be based on the correct amount, even if the deceased number holder's rate was incorrectly computed and is barred to reopening.

4. DIB Guarantee PIA Applies to Title II Disability Cases (See RS 00605.035)

  • The DIB guarantee means that when a PIA (including a RIB or survivor PIA) is computed after a previous disability entitlement has terminated, the PIA can be no lower than the disability PIA that was most recently determined (including automatic increases (COLAs) up to the month of termination).

  • It applies to correctly computed PIAs and to erroneous PIAs which are barred to reopening by the rules of administrative finality.

  • This means that if the rules of administrative finality permit it, we can reopen the incorrectly computed PIA initial determination on the prior claim and revise it. The DIB guarantee PIA would then apply to the revised, correctly computed PIA.

  • If the initial determination of the incorrectly computed PIA on the prior claim cannot be reopened under the rules of administrative finality, the DIB guarantee PIA applies to the incorrect PIA.

5. Spouse’s Benefit Converted from Life (Spouse) to Survivor (Widow(er))

When a spouse’s benefit is converted to a survivor benefit effective with the month of the NH’s death (e.g. PIC B to PIC D, PIC B6 to PIC D6, PIC B2 to E), the PIA determination may be reopened based on the rules of administrative finality just as if the spouse had filed a new application for benefits. The spouse is considered to have filed a new application for survivor’s benefits effective with the date of the conversion from life to survivor’s benefits. Since normal reopening rules apply to all initial determinations, the error(s) on the newly converted widow(er)’s benefits must be discovered within 4 years from the date of the initial notice before we can reopen and revise the erroneous initial determination (see GN 04010.001).

NOTE: Conversions from B2 to B or W to D at FRA are NOT new entitlements because they are in the same class of benefits. Conversions from E to D benefits are entitlements to a new class of benefits and should be considered new claims. See GN 04030.070B.4. about the effect of a DIB Guarantee PIA on a subsequent claim.

a. EXAMPLE 1 - Incorrect PIA Established for NH Life Claim – Now Spouse’s Benefits are Converted to Widow’s Benefit – RIBLIM Not Involved

Information regarding the NH PIC A

PIC “A” benefits were awarded 10/1981 (at age 62) based only on posted wages, no military service credits were included in initial award. PIC “A” properly advised SSA at the time of filing that he was a Civil Service Annuitant. The evidence in file from the initial adjudication clearly showed his pre-1957 military service had been used in computing the amount of his Civil Service Pension. On 09/20/84 we correctly recalculated his PIA to include deemed military service credits for January 1957 through May 1963. These had not been included in SSA benefit at the time of the initial computation.

An AERO issued in 06/1985 alerted SSA to the fact that these military wages needed to be verified. The CA handling the AERO allowed the recomputation to include all pre-1957 M/S credits and greatly increased the PIA as a result. A review of the file would have shown that we were precluded from using the M/S period prior to 1957 because they were used to compute the NH’s Civil Service Pension. The incorrect PIA was used as the basis for benefit rates in all subsequent computations and COLAs.

The NH “PIC A” died in 10/1994. His benefits terminated. Administrative Finality does not allow revision of any payments made to “PIC A” during his lifetime.

Information regarding the spouse of the NH PIC B/D

B/D claimant is not entitled to any benefits based on her own earnings record. She filed for spouses benefits (PIC B) at age 62 (November 1989). She was awarded benefits based on the incorrect PIA given to the NH. When the NH died in 10/1994, spouse’s (B) benefits were automatically converted to widow’s (D) benefits. She is in current pay status as a D based on the incorrect PIA. When the CA reviewed this case in 12/1995, he noticed the incorrect computation used in establishing the PIA because of the miscalculation with the military service.

  • Question – Can we reopen and revise the PIA now in 12/1995 and make the correct payment to the widow (D) based on the reduced PIA?

  • Answer: Yes, we can revise the PIA and make the correct payment of widow (D) benefits based on the reduced “correct” PIA because we are within four years from the date she was notified of her entitlement to widow’s (D) benefit. The basis for permitting revision is that this is considered to be a new initial determination that was made when the spouse’s benefit was converted to a widow’s benefit (see GN 03101.040, GN 03101.070 and GN 04001.030).

The conversion from spouse’s benefits to widow’s benefits constitutes a new initial determination subject to the rules of administrative finality because they are different classes of benefits with different requirements for entitlement.

  • Question – Can we reopen and revise the spouse’s benefit (B)?

  • Answer: No, we cannot revise the spouse’s benefit (B) because she became entitled to spouse’s benefits over four years ago in November 1989. We did not notice the error until December, 1995. Her spouse’s benefit is based on the NH’s established 10/81 PIA that was originally computed over four years ago.

b. EXAMPLE 2 - Incorrect PIA Established for NH Life Claim – Now Spouse’s Benefits are Converted to Widow’s Benefit – DIB Guarantee Involved

Same facts as EXAMPLE 1 except that the NH was entitled to DIB in 10/81 which converted to RIB at age 65 (10/84).

  • Question – Can we reopen and revise the PIA now in 12/1995 and make the correct payment to the widow (D) based on the reduced PIA?

  • Answer: Yes, we can revise the PIA and make the correct payment of widow (D) benefits based on the reduced “correct” PIA because we are within four years from the date she was notified of her entitlement to widow’s (D) benefit. However, we must consider the Subsequent DIB guarantee PIA as one of the choices of the “correct” PIA. The Subsequent DIB guarantee PIA will be based on the DNH’s administratively final “incorrect” PIA. (GN 04030.070B.4) Therefore, in effect, the PIA type code will be changed to “S” but there will be no reduction in the PIA or D rate.

6. Child’s Benefit is Converted to Surviving Child’s Benefit

When a child’s benefit is converted to a surviving child’s benefit effective with the month of the NH’s death, the PIA determination cannot be reopened because the class of benefits has not changed. Children are not considered to have filed a new application for survivor’s benefits because the class of benefits has not changed like it does in spouse’s benefits to widow’s benefits. The child is still receiving child’s benefits while the spouse is now receiving widow’s benefits.

If entitlement to child’s (survivor) benefit was within 4 years from the date of initial determination and the error in the PIA is discovered within the 4 years from the date of initial determination to child’s (life) benefits, then normal reopening rules apply and the determination can be reopened and revised.

EXAMPLE – Incorrect PIA Established on NH’s Life Claim – Now Children’s Benefits are Converted from Life Benefits to Survivor’s Benefits - The same information in GN 04030.070B.5.a. regarding PIC “A” applies in this example.

The NH adopted two grandchildren in 01/1992. The children subsequently became entitled on his record in 01/1992. When the NH died in 10/1994, their benefits were automatically converted to survivor’s benefits. When the CA reviewed this case in 12/1995, he noticed the incorrect computation used in establishing the PIA because of the miscalculation with the military service.

  • Question – Can we reopen and revise the 01/92 determination since the error is discovered within four years of the date of the children’s’ initial award notices?

  • Answer: Yes, we can reopen and revise the 01/92 determination because the time period is within four years of the date of their initial entitlement to benefits.

  • Question – Can we reopen and revise the benefit amount now and make the correct payment to the surviving children effective 10/94?

  • Answer: Yes, the determination can be reopened because the error was noticed within 4 years of the date of their initial entitlement to benefits.

NOTE: The conversion from life to survivor’s benefits in this example does not constitute a new initial determination because they are considered to be receiving the same class of benefits (grandchildren’s) with the same requirements for entitlement in the life claim and the survivor claim. If this error was not discovered within 4 years, then the children’s benefit would be based on the incorrect PIA of record since the conversion from life to survivor’s benefits is not considered to be a new initial determination because it involves the same class of benefits.

7. Life to Death Conversion Cases and AERO Actions

When AERO actions are received, the record(s) involved should be carefully evaluated before any corrective action is taken on the record to ensure that no additional errors are made. The PSCs receive AERO “PIA LOW INVESTIGATE” actions following a B to D conversion when the death PIA appears to be too high, based on the computational data on record. This occurs when the NH’s life PIA was calculated incorrectly (e.g. duplicate wage postings were used), but the higher PIA could not be corrected under the rules of administrative finality. If this type of AERO action is received and an affirmative action in writing is established within four years of the initial award notice that converts a spouse (B) to widow (D) benefit, the newly entitled widow’s (D) PIA determination can be reopened and revised effective with the month of the B to D conversion.

If there are children entitled on the same record, their “survivor” PIA and MBAs cannot be corrected unless the initial determination notice of “life” auxiliary child’s entitlement was made within the last four years. The normal reopening rules involving good cause apply in these situations (see GN 04010.001).

a. EXAMPLE - Applying Rules of Administrative Finality in Conversion Cases (Spouse to Widow(er)’s Benefits) Upon Receipt of an AERO Action

NH and spouse were receiving retirement and spouse’s benefits beginning in 01/1990. The years used in computing the NH’s PIA were 1951-1989. In 10/1993 an AERO was erroneously processed granting additional wage credits for duplicate earnings in 1988. These duplicate earnings should not have been included in the NH’s PIA computation because they were erroneous. However, this AERO recalculation was processed erroneously which increased the NH’s 01/1990 PIA from $610 to $675.

In 04/1994 another AERO was received informing SSA to investigate the possibility of lowering the PIA. Since the initial determination was made over four years ago in 01/1990, SSA cannot reopen and revise the recalculation since it was a revised initial determination on the 01/1990 initial determination. The 04/1994 effective PIA was $816.30.

On 05/05/1995 the NH died. The spouse’s benefit was converted to widow’s benefit based on the incorrect PIA that used the duplicate earnings in error.

On 10/10/1998, a PIA investigate AERO alert was sent on this record because of the discrepancy in the PIA with the incorrect computation. At that time the CA established an affirmative action in writing. The NH’s 10/98 PIA was $904.50. The correct PIA (not including the duplicate 1988 earnings) should be $824.50.

  • The question the AERO alert raised is, Can the PIA be adjusted/lowered under the rules of administrative finality since this error took place over four years ago in 1993? If so, can the adjustment in the PIA go back to when the NH died and the spouse’s benefit was converted to widow’s benefits in 05/1995?

  • The correct answer is; yes, the PIA can be corrected back to the date the spouse’s benefit was converted to widow’s benefits in 05/1995. The reason the CA can correct this PIA back to the date the benefits were converted is, SSA considers the conversion of spouse’s benefits to widow’s benefits to be a new initial determination under the rules of administrative finality. So, in 05/1995 we sent the widow a new initial notice of determination regarding her entitlement to widow’s benefits. Since the entitlement requirements are different for spouse’s and widow’s benefits, SSA had to make a new initial determination on whether the spouse qualified for widow’s benefits. When the NH died, we decided that in fact, the spouse met the requirements for widow’s benefits. Since we discovered the error on 10/10/98 which is within four years of the initial determination, we can correct the erroneous PIA back to the date of initial entitlement to widow’s benefits in 05/1995.

NOTE: If the error was discovered after four years from the initial determination to widow’s benefits in 05/1995, then we could NOT correct the benefit amount.

b. EXAMPLE - Applying Rules of Administrative Finality in Conversion Cases (Life to Survivor’s Benefits - Children) Upon Receipt of an AERO Action

Same situation as in the example mentioned in 7.a., except there are two children who were also on the NH’s record when he died in 05/1995. The question the 10/98 AERO alert raised was; can the children’s benefits be adjusted/lowered under the rules of administrative finality since the error took place over four years ago in 1993?

The answer is no. The children’s benefits cannot be lowered because the initial determination was made over four years ago in 01/90 and the class of benefits has not changed. The children are still receiving children’s benefits. Also, the result would be disadvantageous to the beneficiaries. In this case, the children would be paid based on the incorrect PIA and the surviving spouse would be paid based on the correct PIA.

NOTE: If the result of correcting this error on the face of the evidence was favorable to the children, then the error could be corrected according to GN 04010.020 and GN 04020.080. Also, if the error had been discovered within four years from the initial determination date of 01/1990 and an affirmative action in writing was established, then we could have corrected the error on this record even though the result of reopening would be unfavorable to the children.

8. Conversion Cases – One Class of Benefits to a Different Class of Benefits – e.g. Disability to Retirement

When one class of benefits is converted to another class of benefits (e.g. Disability to Retirement), the benefit amount or PIA can be reopened and revised effective with the month of the conversion. The PIA determination may be revised based on the rules of administrative finality. The conversion of benefits from one class to another generates a new initial determination for benefits effective with the date of the conversion. Since normal reopening rules apply to all initial determinations, the error(s) on the newly converted benefit must be discovered within 4 years from the date of the initial notice before we can reopen and revise the erroneous initial determination if the result is unfavorable to the claimant. If the end result is favorable, we can reopen and revise the initial determination (conversion) at anytime if there is an error on the face of the evidence (see GN 04010.001 and GN 04010.020).

EXAMPLE

NH is receiving Disability benefits beginning in 10/1994. In 12/1999 he will be full retirement, age 65, and his benefits will be converted to Retirement benefits. In 10/2003, we discover an error in the computation of his benefit amount that resulted in the NH receiving more benefits than he was due. Since reopening and revising this error would be disadvantageous but we discovered the error within 4 years of his entitlement to Retirement benefits, we can reopen and revise the amount of his benefit beginning in 12/1999, the date his benefits were converted to retirement. (See GN 04030.070B.4 about the effect of a DIB Guarantee PIA on a subsequent claim).

NOTE: We cannot go back and correct the amount of his disability benefit since the initial determination made on his Disability benefit was in 10/1994, well over 4 years from the date we discovered the error in 10/2003 and the end result of reopening that determination would be unfavorable to the NH (see GN 04010.020).

C. Policy — Claims filed on different earnings records

When a new claim is filed, the adjudication of such claim does not affect and is not affected by a determination on a prior claim filed on a different earnings record. The determination on the new claim should be made independent of the determination made on the earlier claim on the other earnings record. Information about the earlier claim which comes to light while processing the new claim can lead to reopening the earlier claim under the rules of administrative finality.

EXAMPLE

In 2004, Mary Jones files as a wife on the E/R of James Peterson. Investigation reveals she was entitled beginning 1989 as the wife of Bill Jones, and she is still collecting benefits as Mr. Jones' wife. Her marriage to Mr. Jones has not terminated. (New information indicates her marriage to Mr. Jones was bigamous.)

The fact that we made a determination of marriage in 1989 on one earnings record does not preclude us from now making a marriage determination on another earnings record. We should make a determination as to whether Mary Jones is married to James Peterson. If we determine she is not married to Mr. Peterson, we should deny the claim.

(We will want to see if the marriage determination on Bill Jones' E/R was correct. If it was not, we will see if we can reopen it under the rules of administrative finality in GN 04020.000.) If we determine that she is married to James Peterson, we should award her benefits on his record and determine whether we can reopen the relationship determination on Mr. Jones' record. (For example, fraud may be found.) If there is no basis in GN 04020.000 for reopening the marriage determination on Mr. Jones' record, Mary Jones, although entitled on both E/Rs, cannot be paid on the two records at the same time.