When administrative finality protects the rates of one or more beneficiaries and a
new person is entitled the rates for the new beneficiary are computed using the correct
PIA and family maximum. See GN 04030.070B.1.c. Compute the rates for the new person as if the other beneficiaries are receiving
the correct rates. This may result in the family maximum being exceeded. To document
these cases the MBR PIA History field should show the correct PIA and maximum. The
special message field should be used to document which rates are protected by administrative
finality and to show the PIA and maximum used to arrive at those rates. In addition
the Administrative Finality indicator must be coded to prevent automated changes in
the rates per instructions in MSOM T2PE 007.026.
The two examples that follow illustrate how to process a case when only the numberholder
is protected by administrative finality and when the numberholder and another person
are protected.
EXAMPLE: The numberholder is receiving a PIA/benefit of $1,000.00 with a maximum of $1,750.00.
A new auxiliary files a claim and we determine the correct PIA is really $750.00 with
a maximum of $1,312.50. We determine that the rate to the NH is protected by administrative
finality and cannot be changed. To determine the rate for the new child we subtract
the correct PIA from the correct maximum ($1312.50 - $750.00) and are left with $562.50.
The child is entitled to one half the PIA or $375.50 so we have enough to pay the
child the full correct rate. The rates payable will then be $1,000.00 to the NH and
$375.50 to the new child. The total payable to the family will then be $1,375.50 even
though the correct maximum is only $1,312.50.
EXAMPLE: The numberholder is receiving a PIA/benefit of $1,000.00 with a maximum of $1,750.00.
There is also a child receiving $500.00. A new auxiliary files a claim and we determine
the correct PIA is really $750.00 with a maximum of $1,312.50. We determine that the
rates to the NH and the first child are protected by administrative finality and must
be based on the protected PIA and maximum. The NH will continue to get $1,000.00.
Although GN 04020.020C. allows us to adjust the rate for the first child because of the new child that adjustment
must be made using the original PIA and maximum because administrative finality protects
the NH and the child. The rate to the first child based on the original PIA and maximum
would be: $1,750 minus $1,000 is $750 divided by 2 or $375.00. To determine the rate
for the new child we subtract the correct PIA from the correct maximum ($1312.50 -
$750.00) and are left with $562.50. We divide that by the number of children (2) and
get $281.20 as the correct rate for the new child. The rates payable will then be
$1,000.00 to the NH, $375.00 to the first child and $281.20 to the new child. The
total payable to the family will then be $1,656.20 even though the correct maximum
is only $1,312.50.