Effective Dates: 08/29/2024 - Present Previous | Next

TN 35 (08-24)

SI 02101.020 Large Past-Due Supplemental Security Income Payments by Installments – Individual Alive

CITATIONS:

Social Security Act §1631(a)(10);
20 C.F.R.§416.545

A. Introduction

Effective May 22, 2006, we enacted changes to the installment formula for Supplemental Security Income (SSI) past-due payments. This section describes when we must issue past-due payments by installments.

B. Policy - installment payments

Installment payment amounts include any federally administered State supplement and any:

  • •

    Payments due but unpaid that accrued prior to the month we effectuated payment;

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    Payments due but unpaid that accrued during a period of suspension for which we subsequently determined the individual was eligible; and

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    Adjustment to the record that results in an accrual of unreleased payments.

1. Installment payment requirements

The installment payment requirement applies when an individual (or eligible couple) is eligible for past-due SSI payments and the payment amount equals or exceeds three times the current maximum Federal Benefit Rate (FBR) plus any federally administered State supplement after reimbursement for interim assistance (IA) or direct payment of representative fees.

In applying this formula, we subtract any overpayments or penalties we withhold from the past-due SSI payments. For instructions on determining the amount of past-due SSI payments, refer to SI 02101.020C.6. and SI 02101.020D.8. in this section. For the exception to priority of payment order when there is a prior overpayment and payable representative fees, refer to SI 02101.002.

NOTE: 

At the pre-effectuation review conference (PERC) interview, we will inform individuals they can receive more of the underpayment right away if they have debts or expenses.

2. Exception to installment payment requirements

Installment payments are not required for an individual who, at the time of the past-due payment eligibility determination or during the installment process:

  • •

    Has a medical condition which is expected to result in death within 12 months; or

  • •

    Is no longer eligible for SSI and is determined likely to remain ineligible for the next 12 months.

If an individual meets one of the two conditions, pay the past-due amount in full.

3. Amount and timing of installment payments

We must pay installment payments in no more than three payments. We issue each installment payment at six-month intervals. If we do not release the second installment timely, we must wait six months after the second installment to release the third, and final, installment. Each of the first and second installment payments cannot exceed three times the FBR plus any federally administered State supplement, unless the exceptions in SI 0210.020B.4. for increasing the installment amount applies. The first and second installment payments should each be for the maximum FBR amount when the balance due equals or exceeds 3 X FBR, plus State supplement). The third, and final, installment payment is the balance of the past-due benefit.

4. Exceptions to the limitation on the amount of the first and second installment payments

If the individual, or their representative payee (payee), alleges they have debts or expenses as described in SI 02101.020B.4. in this section, we will increase the amount of the first or second installment.

a. Debts

Increase the amount of the first or second or both installment payments when the individual or their payee alleges they have outstanding debts relating to:

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    Food, clothing, and shelter (including expenses necessary to provide a place to live, such as rent, mortgage payments, property insurance, property tax, and utilities such as gas, electric, heating fuel, water, sewer, and garbage);

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    Medically necessary services, supplies, equipment, or medicine;

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    Car;

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    Mobile phone; or

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    Computer.

b. Expenses

Increase the amount of the first, second or both installment payments if the individual or their payee alleges that they have current or expected expenses relating to:

  • •

    Medically necessary services, supplies or equipment; or

  • •

    Housing stability:

We determine medically necessary services, supplies or equipment on a case-by-case basis. Examples of non-traditional medical expenses can include, but are not limited to, the purchase of a:

  • •

    Car;

  • •

    Mobile phone; or

  • •

    Computer.

c. Amount of increase allowed and when we will pay

If the individual alleges that they have debts or expenses that meet the criteria for an increased installment, increase the installment payment amount by the total debt or expense amount. The individual may request, and be paid, an installment increase at any time.

EXAMPLE 1: During the PERC interview the technician tells Joseph that they are due an underpayment of $20,000. The technician explains we must issue the underpayment in installments. The first two installments would be limited to $2,829 (three times the FBR of $943 for 2024). The technician tells Joseph that if they need more money for the cost of debts, household expenses, or housing costs, we can release additional money up to the total amount of the underpayment. Joseph alleged a need for $10,000 to purchase a car. We issue the $10,000 to Joseph as an additional amount for the first installment payment.

EXAMPLE 2: Scott is due an underpayment totaling $15,000. In February 2024, we release the first installment of $2,829. We inform Scott they can receive more of the underpayment right away if they have debts or expenses. Scott goes into the field office in May 2024 and alleges the need for an additional $5,000. If the debts or expenses meet the criteria for an increase, we can pay the $5,000 immediately. We consider the $5,000 payment an increase of the first installment. This leaves a balance of $7,171. In August 2024, Scott is due the second installment, so we release $2,829, leaving a balance of $4,342 as the third and final installment.

d. Increase only allowed for non-reimbursable expenses

The increase in installment payments only applies with respect to debts or expenses that are not reimbursable by any public assistance program, Title XVIII, a State plan approved under Title XIX, or by any private party liable for payment by an insurance policy, prepaid plan, or other arrangement.

If you have no evidence that the debt or expense is reimbursable, approve the request for an increased installment payment amount.

Attorneys and non-attorney representatives who do not receive direct fee payment by SSA do not qualify as an exception for an increased first or second installment payment.

C. Policy - related issues

1. Dedicated accounts - individual under age 18 with a payee

A dedicated account is required if the individual is under age 18, has a payee, and the past-due amount (after Interim Assistance Reimbursement (IAR), representative fee payments, and prior overpayment collection) is greater than six times the FBR plus any federally administered State supplement. Because installment payments are required if the past-due amount equals or exceeds three times the current FBR plus any federally administered State supplement, any case that meets the dedicated account requirement also meets the installment payments requirement. Establish the dedicated account before releasing any past-due payments. For instructions on dedicated accounts, refer to SI 02101.010.

2. Couple cases

When members of an eligible couple both become eligible at the same time, determine if a case requires installment payments using the couple's FBR, plus any applicable, federally administered State supplement. However, when only one member becomes eligible while the other member's claim is pending, use the individual's FBR, plus any applicable federally administered State supplement, to determine if the case requires installment payments for that member of the couple.

When the second member of the couple becomes eligible, one-half of the couple's rate applies in determining whether the case would require installment payments if that member is due an underpayment. This does not affect the first member's installment payments.

3. Effect on resources

Each installment payment retains a nine-month exclusion period following the payment receipt month. For retroactive SSI and RSDI payments, refer to SI 01130.600. Do not consider the unpaid installment balance a resource. Exclude dedicated account installment payments indefinitely as a resource.

4. IAR payments

The system holds the underpayment when a pending GR code is on the SSR. Conduct the prepayment review to send the electronic accounting record to the State and set the UPV of “V”. When the State certifies the interim assistance (IA) payment amounts, the system determines the reimbursement due and releases the past due payment following the priority of payment order. If the case meets an exception to eIAR, refer to the instructions in SI 02003.025.

5. Representative fees

Installment payments are determined after we reimburse the State for interim assistance or for the direct payment of any representative fees. If the authorized representative elects direct fee payment, refer to the instructions in:

  • •

    Administering Representatives Fees Provisions - GN 03920.000

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    Fee Authorization Under the Fee Petition Process - GN 03930.000

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    Fee Authorization Under the Fee Agreement - GN 03940.000

6. Overpayment collection with installment payments on the record

We may deduct an overpayment for a different period from the unpaid balance of the past-due installments after we give the individual due process rights for the overpayment and the appeal period has expired. The system automatically offsets an overpayment against the past due installment when we release the first, second, or third and final payment.

NOTE: 

When we pay authorized representative fees directly, and a prior overpayment is on the record, the priority of payment order is:

7. Additional past-due SSI payments become payable

Any additional past-due SSI payments that become payable during the installment period become part of the installment process. An automated notice informs the individual we will add the additional underpayment to the next installment payment. The individual must contact the field office (FO) to receive this money sooner. The FO needs to send an A-OTP, using the UPOT screen from the UPSP Menu, only for the additional past-due amount.

8. FLA “D” cases

For individuals in the FLA D living arrangement ($30 cap), the threshold when making the determination for paying past-due installments is an amount that equals or exceeds three times the current FBR, plus any federally administered State supplement, i.e., for 2024, 3 X FBR of $943 plus any applicable State supplement.

9. Period of ineligibility

The installment payment process continues at six-month intervals for a maximum of three payments until we paid the past-due amount in full, unless the individual meets an exception in SI 02101.020B.2. When an individual is in a non-pay or suspense status, issue the installment payments using the A-OTP process and send manual notices, unless the individual resides in a correctional facility as described in SI 00529.001 and SI 02101.020D.3. in this section.

10. Death of the individual

If the individual dies prior to receiving all past-due payments, refer to SI 02101.002 to determine who is eligible for the decedent's remaining past-due SSI payments.

11. Current calendar month payments included in the amount subject to installments

If payments for the current calendar month, a subsequent month, or both are included in the amount subject to installments, issue an A-OTP for the current month or subsequent month or both. In some instances, this action removes the case from the installment provisions.

Take this action only after any prepayment review of large underpayments as described in SI 02101.025, adjustment for IAR calculation, or adjustment for direct attorney or non-attorney fee payment, and collectible overpayment from a different period.

EXAMPLE 1: If we effectuate the SSI claim on August 15th, the current computation month is September and the first monthly payment would be issued September 1st.

We treat all due amounts through August as an underpayment subject to the installment provisions if the underpayment is more than three times the FBR. The FO must issue an A-OTP for August, the current calendar month.

EXAMPLE 2: If we effectuate the claim after the current computation month cutoff in August, the current computation month is October, and we issue the first monthly payment on October 1st. Treat all payments due through September as an underpayment, subject to installment payment requirements if the underpayment is more than three times the FBR. In this situation, the FO must pay the current calendar month’s payment (August), and September’s payment by A-OTP. The FO will issue a manual notice when paying the current or subsequent month by an A-OTP. In both examples, the A-OTP may reduce the underpayment to less than three times the FBR, removing the underpayment from installment payment requirements.

D. Process for releasing underpayments

1. Current pay records

For performing the prepayment review, follow the instructions in SI 02101.025. To release the underpayment after the prepayment review, use the Underpayment Processing (UOUP) screen through DIRECT SSR Update. For more information about the UOUP screen, refer to MS 00304.018. Choose the appropriate underpayment release code.

After we make the IAR payment to the State, pay representative fees directly, and recover any prior overpayment. The system determines whether installment payments or dedicated accounts apply. The system also generates the appropriate notices if a dedicated account is required.

2. Terminated records

As long as an underpayment (UPX) remains on a record, the system does not automatically terminate the record. However, in cases where the record has terminated (e.g., T31, T32), manually control the case until we issue all past-due payments. If you erroneously terminate the record (T30, T33), manually control the case until we issue all past-due payments. If the individual is no longer eligible for SSI and is determined likely to remain ineligible for the next 12 months, refer to SI 02101.020B.2 in this section.

The No Social Security Benefits for Prisoners Act of 2009 (NSSBP) prohibits paying SSI underpayments to individuals or terminated individuals who are prisoners, confined in a public institution based on a court order for a criminal act, fugitive felons, or probation or parole violators. For instructions on processing incarcerated claimants and individuals’ underpayments, refer to GN 02607.550, SI 00529.001, and SI 00529.020.

3. Non-pay records

The system issues installment payments in only a few non-pay situations when a record goes into non-pay status. Control and issue installment payments using the A-OTP process and send manual notices in any case where the system does not release the payment, unless the individual resides in a correctional facility. For instructions on processing incarcerated claimants and individuals’ underpayments, refer to SI 00529.001 and MS 00303.007.

4. Current pay – IAR, no IAR, direct representative fee payment, dedicated accounts or installments

When SSA pays authorized representative fees directly, and a prior overpayment is on the record, the priority of payment order is:

  • •

    IAR payment;

  • •

    Direct representative fee payment;

  • •

    Prior overpayment recovery.

STEP

ACTION

1

To determine if the past-due payment amount is correct, refer to the prepayment review process in SI 02101.025.

Go to Step 6 for installments with no prepayment review.

2
  • •

    Complete the UOUP screen by selecting the appropriate code to indicate prepayment review is complete. Access the UOUP screen from Direct SSR Update. For more information about the UOUP screen, refer to MS 00304.018 and SM 01311.660.

  • •

    Go to Step 3 if IAR involved; Step 4 for direct payment of representative fees; Step 5 for dedicated accounts with installments; Step 6 for installment only cases.

3

IAR cases, the system:

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    Posts a UPV of ‘V' to the record;

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    Generates an email to the State and an eIAR accounting screen to complete with the amount of reimbursement due, and

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    When the State certifies the IA payment amounts, the system compares the IAR to the SSI amount due and releases the past-due payment following the priority of payment order. For Processing eIAR Field Office Intervention Cases, refer to SI 02003.022. For IAR Payment Processing for Exception Cases and Proration Cases, refer to SI 02003.025.

  • •

    The system computes any remaining underpayment amount due and IF:

  • •

    Direct representative fee payment apply, go to Step 4

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    Dedicated accounts with installments apply, go to Step 5 or

  • •

    Installments only apply, go to Step 6.

4

Direct payment for representative fee cases:

If there is no IAR involved or if IAR reimbursement was made to the State, and direct representative fee payment is involved (DP is ‘D’), but direct representative fee payment cannot be made yet because the fee status is unresolved, (FST is ‘U’, or in a concurrent case the system cannot yet compute the Title XVI fee), the system:

  • •

    Posts an ‘A’ in the UPV field of the SSR;

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    Holds the underpayment until we issue the fee payment; and

  • •

    Issues a notice explaining that if a fee is due, we will pay the representative directly.

When the system issues the fee, or if the system determines that no fee is due, the system:

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    Removes the ‘A’ in the UPV field of the SSR

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    Issues a notice, explaining that we paid the fee or that there is no fee due.

If dedicated accounts are involved, go to Step 5. If installments only are involved, go to Step 6.

5

In dedicated account cases, the system:

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    Posts a UPV of ‘B';

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    Sets an EA diary with a 30-day maturity date; and

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    Releases an automated notice to the payee

Account opened:

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    FO A-OTPs first installment payment of 3 X (FBR+OSS) into dedicated account;

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    Removes EA diary;

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    Sets an IN diary with a 6 month maturity date;

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    Places a 4N entry in PMTH and ‘1' in pay flag 5; and

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    Generates an automated notice explaining the payment of the installment into the dedicated account.

  • •

    Go to Step 8

6

For installment ONLY cases - no prepayment review required or prepayment review completed - the system determines if installments are required. If so, the system:

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    Issues the first installment to the individual of 3 X current (FBR + OSS);

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    Posts a UPV of 2 to the MPMT field;

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    Posts an ‘8' to pay flag 5 indicating the first installment made; and

  • •

    Generates a notice, explaining the installment provisions and the installment amount.

  • •

    Go to Step 7.

7

The system generates a second installment in 6 months and:

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    Posts a ‘9' to pay flag 5 if there is a final third installment pending; or

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    Posts a ‘Z' to pay flag 5 if this payment is final installment payment; and

  • •

    Issues the appropriate notice, explaining the installment payment.

8

Dedicated account and next installment due

When the IN diary matures, the system sends the FO an alert (I6) to issue the next installment into the dedicated account. In this case:

  • •

    FO A-OTPs (using the UPSP Menu, UPOT screen) installment payment 3 X (FBR+OSS) into the dedicated account;

  • •

    The system sets an IN diary with a 6 month maturity date if a third and final payment is due; and

  • •

    The system places a 4N entry in PMTH and updates pay flag 5 with a ‘2' to show that the second installment was issued.

  • •

    If this second installment was also the final payment, the system posts an ‘F' to pay flag ‘5'.

  • •

    If a third and final installment is due, once the IN diary matures, the FO receives the I6 notifying them to issue the next installment into the dedicated account.

  • •

    The FO issues the remaining underpayment (regardless of the amount) to the dedicated account.

  • •

    The system places a 4N entry in PMTH and builds an ‘F' in pay flag ‘5'.

  • •

    IN diary is deleted; and

  • •

    Notices are automated

5. Exception to installment provision - ineligibility likely for at least 12 months or medical condition likely to result in death within 12 months

If the individual is likely to remain ineligible for SSI (or becomes ineligible during the installment process) or the medical condition will likely result in death within 12 months:

  • •

    Complete a prepayment review, if applicable, according to SI 02101.025.

  • •

    Document the file on a Report of Contact showing the reason for issuing one payment rather than installments.

  • •

    Select Option 5 on the UOUP screen to indicate the case meets an installment exception and the prepayment review is complete. The system releases the underpayment via the automated payment process. For more information about the UOUP screen, refer to MS 00304.018.

You can only use the UOUP screen to release underpayments when the current payment status code is C01, E01, S21, N04, N06, N19, N07, N08, N27 and N01 records meeting systems criteria.

If an individual becomes ineligible during the installment process and is likely to remain ineligible for at least 12 months, or if the individual informs the FO that their medical condition will likely result in death within the next 12 months and requests the remaining past-due SSI payments, issue the remaining past-due amount.

Examples of an ineligibility that is likely to continue for 12 months include, but are not limited to, continuing Title II income (N01), or a closed period of disability (N07). However, other circumstances could also provide a basis for such a conclusion.

EXCEPTION: We cannot pay underpayments or retroactive Title XVI payments to claimants, individuals, or terminated individuals while they are residing in a correctional institution, confined in a public institution based on a court order for a criminal act (CPICO), a fugitive felon (FF), or in violation of probation or parole (PPV). For more information about the No Social Security Benefits for Prisoners (NSSBP) Title XVI Provisions, refer to SI 00529.001.

For guidance when considering whether there is an expectation that an individual's medical condition will result in death within 12 months such as a terminally ill case (TERI), refer to DI 23020.045. When determining whether an individual is likely to remain ineligible for 12 months or more, consider the facts involved in the case.

6. Exceptions to the installment limit - increased payment

The first or second installment payment may be increased by the amount of the individual’s outstanding debt or expenses under the conditions described in SI 02101.020B.4.

The amount by which we increase the payment cannot exceed these “approved” debts or expenses. The individual may request an increase to the installment payment at any time.

Let the individual know what the exceptions are to the limit on the amount of the first and second installment payments during the PERC interview, and explain the kinds of outstanding debts or current or anticipated expenses that are acceptable expenses for increasing the installment.

We will issue a notice to the individual that explains the debts and expenses that can increase the first and second installment payments.

When the individual requests an increased installment payment because of outstanding debts or expenses as described in SI 02101.020B.4., record on a Report of Contact or SSA-5002 the individual or payee's:

  • •

    Request for an increased installment payment amount; and

  • •

    Allegation of the type and amount of debts or expenses as described in SI 02101.020B.4.

    Issue DPS notice Instal 05 - App/Disapp Request for Increased Payment.

7. Dedicated account involvement

When past-due payments greater than six times the FBR, plus any federally administered State supplement, are due an individual under age 18 who has a payee, in addition to requiring a dedicated account, the past-due payments must also be paid by installments. We pay all dedicated account cases by installments via direct deposit into a dedicated account. For the permitted expenditures and requirements of a dedicated account, refer to the instructions in GN 00602.140 and GN 00603.025. If an exception to installments applies as the described in SI 02101.020B.2, deposit the entire past-due amount into the dedicated account.

8. Prior overpayment from other record – installment-only cases

Prior overpayments are offset against the first, second and third (final) installment payment(s) automatically. Due to systems limitations, we cannot offset in all dedicated account or installment payment cases. If the system does not offset a prior overpayment, continue collecting the overpayment at the 10 percent rate.

We cannot offset prior collectible overpayments against an installment payment until we directly pay any applicable authorized representative's fee. The priority of payment order when direct representative fee is involved is:

  • •

    IAR,

  • •

    direct representative fee payment; and

  • •

    prior overpayment recovery.

For more information administering representative fee provisions, refer to GN 03920.000. For more information about the fee petition process, refer to GN 03930.000. For more information about the fee agreement process, refer to GN 03940.000. For more information about the A-OTP process, refer to SM 01901.000.

9. Subsequent overpayment during installment payment period

If we are making installment payments and the technician inputs a change for a subsequent period that creates an additional overpayment, DO NOT OFFSET the overpayment against the installment payments.

After all overpayment due process rights for the overpayment, including waiver issues, are complete, apply a collect decision to the record (D TAC), and recover the overpayment from any installment funds that have not been paid.

If we have not completed due process, or the individual requests a waiver, issue the last installment payment timely and recover the overpayment via 10 percent withholding from continuing payments.

10. Additional amounts due or excess payments during installment payment period

Automated netting is part of the computational process. Netting takes place prior to placing the installment or dedicated account indicator on the record. However, once we place the installment or dedicated account indicator on the record, automated netting does not take place.

When the individual receives installment payments and the technician inputs a change for a subsequent period in which higher payments are due for some months and lower payments are due for other months, allow the system to create a B3, unresolved overpayment diary, for months of excess payment and add the additional amounts due the individual to the installment total.

After we release the overpayment notice and there is a collect decision on the record (D TAC), and installment funds remain, the system recovers the overpayment if the appeal period has not lapsed, or if there is a waiver request, we cannot recover from the installment payment. If these issues are not resolved before we make the final installment payment, recover the overpayment through 10 percent withholding from continuing payments.

11. Subsequent past-due payments during installment payment period

a. Dedicated account not involved

When the individual receives installments and the technician inputs a change for a prior period that creates an additional past-due amount, the system adds the additional underpayment to the total remaining past-due payments we are issuing via installments. This generates an automated notice to the individual explaining the additional past-due amount.

b. Dedicated Account Involved

When we make installment payments into a dedicated account and input a change for a prior period that creates an additional underpayment that meets the requirements of an optional deposit, refer to SI 02101.010A.2. Add the additional underpayment to the total remaining past-due payments we are issuing via installments. The system generates an automated notice to the individual explaining the additional past-due amount.

If the individual or the payee requests to be paid the additional underpayment prior to the next installment payment and they do not want it deposited into the dedicated account, the FO must make an A-OTP for that amount. If the individual or the payee requests the optional underpayment when we issue the next installment payment, we pay the optional payment separately to the individual by an A-OTP and the installment payment directly into the dedicated account by an A-OTP. An automated notice will release the installment payment; however, a manual notice is required for the optional payment.

Example 1: We issued Jan's first installment payment to their financial account in January. In March, the FO technician input a corrected wage report for six months prior to Jan's month of payment effectuation that increased the amount of past-due SSI money due them by $2,500. The system added the $2,500 to the total past-due payments that we are issuing via installments, and issues an automated notice to Jan explaining the additional $2,500.

Example 2: We issued Judy's first installment payment into their dedicated account in August, and the second installment payment into their dedicated account in February. In April, Judy's payee received a notice stating Judy was due an additional $1,000 in past-due SSI as a result of a correction to their unearned income for prior months. Judy's payee asked to have the additional past-due $1,000 paid to them, and not deposited into the dedicated account. The technician issued an A-OTP to the payee for $1,000 on Judy's behalf and issued a manual notice explaining the additional $1,000.

NOTE: 

Automated netting takes place prior to placing the dedicated account or installment indicator on the record. Once the indicator is on the record, automated netting does not occur as described in SI 02101.020D.10.

E. Procedure – manual netting notices

Prepare the appropriate manual notice, SSA-L8025, SSA-L8151, SSA-8166 or SSA-L8100 when releasing an underpayment if netting took place. We require manual notices for A-OTPs when the FO suppresses the automated notice. You can find manual netting notices in DPS.

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0502101020
SI 02101.020 - Large Past-Due Supplemental Security Income Payments by Installments – Individual Alive - 08/29/2024
Batch run: 12/12/2024
Rev:08/29/2024