This memorandum is in response to your request for an opinion regarding whether a
child adopted in North Carolina, while his natural mother was still living, is entitled
to receive an underpayment on the account of his now deceased natural mother who died
while domiciled in Texas. In our opinion, the adopted child is entitled to receive
his proportion of the underpayment on the account of his deceased natural mother because
the Social Security Act (Act) provides for underpayments to be paid to a deceased's
survivors or heirs, and Texas law allows for an adopted child to inherit from his
natural parents.
As we understand the facts, NH Vernie P. D~ (Ms. D~) gave birth to Lonnie E. D~, Jr.,
(Lonnie) on June 2, 1965, in Dallas, Texas. On February 5, 1976, Carl and Flora K~
(Adopting Parents) adopted Lonnie in North Carolina. The Adopting Parents changed
Lonnie's name to Lonnie E. K~. On February 6, 2007, Ms. D~ died intestate while domiciled
in Texas. The Social Security Administration (Agency) processed and awarded Ms. D~'s
Title II disability claim after her death, resulting in an underpayment of $2,042.00.
The application for Ms. D~'s underpayment lists three adult children, one of whom
is Lonnie. None of these three children filed a claim for children's insurance benefits
on Ms. D~'s record. At the time of Ms. D~'s death, she did not have a surviving parent
entitled to monthly benefit earnings on her record or a surviving spouse.
The Act provides that when an underpaid beneficiary is deceased, payment must be made
to the deceased's survivors or heirs. 42 U.S.C.A. § 404(d) (2007); see also Program Operations Manual System (POMS) General (GN) 02301.030. The Act sets forth
seven groups of individuals in order of priority in which the Agency will pay the
deceased's survivors or heirs. 42 U.S.C.A. § 404(d). The regulations emphasize that
the Agency will distribute an underpayment to the living person or persons in the
highest order of priority as follows:
(1) The deceased individual's surviving spouse as defined in section 216(c), (g),
or (h) of the Act who was either:
(i) Living in the same household (as defined in § 404.347) with the deceased individual
at the time of such individual's death, or
(ii) Entitled to a monthly benefit on the basis of the same earnings record as was
the deceased individual for the month in with such individual died.
(2) The child or children of the deceased individual (as defined in section 216(e)
or (h) of the Act) entitled to a monthly benefit on the basis of the same earnings
record as was the deceased individual for the month in which such individual died
(if more than one such child, in equal shares to each such child).
(3) The parent or parents of the deceased individual, entitled to a monthly benefit
on the basis of the same earnings record as was the deceased individual for the month
in which such individual died (if more than one such parent, in equal shares to such
parent). . . .
(4) The surviving spouse of the deceased individual (as defined in section 216(c),
(g), or (h) of the Act) who does not qualify under paragraph (b)(1) of this section.
(5) The child or children of the deceased individual (as defined in section 216(e)
or (h) of the Act) who do not qualify under paragraph (b)(2) of this section (if more
than one such child, in equal shares to each such child).
(6) The parent or parents of the deceased individual, who do not qualify under paragraph
(b)(3) of this section (if more than one such parent, in equal shares to each such
parent). . . .
(7) The legal representative of the estate of the deceased individual as defined in
paragraph (d) of this section.
20 C.F.R. § 404.503(b) (2007). As stated above, Ms. D~ had three surviving children
including Lonnie, but she did not have a surviving parent entitled to monthly benefits
on her earnings or a surviving spouse. Thus, the Act and regulations provide that
payment should be made to Ms. D~'s children. See 42 U.S.C.A. § 404(d); 20 C.F.R. § 404.503(b).
We must first determine whether Lonnie qualifies as Ms. D~'s child as defined in section
216(e) or (h) of the Act. The Act's definition of "child" includes "the child or legally
adopted child of an individual." 42 U.S.C.A. § 416(e). Section 216(h) of the Act provides
that in determining whether an applicant is the child of a fully or currently insured
individual, the Commissioner shall "apply such law as would be applied in determining
the devolution of intestate personal property . . . by the courts of the State in
which such insured individual [was] domiciled at the time of his death . . . ." 20
U.S.C.A. § 416(h)(2)(A) (2007); see
also 20 C.F.R. § 404.355(a)(1), (b)(1), (b)(4) (2007). In this case, the insured wage earner,
Ms. D~, was domiciled in Texas at the time of her death. Therefore, the Agency must
determine whether Lonnie could inherit Ms. D~'s personal property under Texas intestacy
law. The Texas Probate Code provides that an adopted child can inherit from and through
his or her natural parents. Tex. Prob. Code Ann. § 40 (2007). Indeed, the United States
Court of Claims acknowledged that under Texas statutes, a child who another adopts
during his or her natural parent's lifetime does not lose any rights of inheritance
from his or her natural parent. See Berkey v. United States, 361 F.2d 983, 984 n.1 (Cl. Ct. 1966). Because Lonnie can inherit from his natural
mother under Texas law, Lonnie is Ms. D~'s child under the Act.
We must next determine whether Lonnie occupies the same level priority as Ms. D~'s
two other adult children. Under the statutory level of priority for underpayments
the Act and regulations set forth, a deceased number holder's children can occupy
either the second or the fifth level of priority. 42 U.S.C.A. § 404(d)(2), (d)(5);
20 C.F.R. § 404.503(b)(2), (b)(5). A child or children would fall under the second
level of priority if, in the month Ms. D~ died, one or more of her children was entitled
to monthly benefits on the basis of the same wages and self-employment income as Ms.
D~. 42 U.S.C.A. § 404(d)(2); 20 C.F.R. § 404.503(b)(2). Under these circumstances,
the Agency should pay such a child the entire amount of the underpayment or, if there
is more than one such child, in equal parts to each such child. Id. Ms. D~'s children would fall under the fifth level of priority if none of Ms. D~'s
children were entitled to monthly benefits on her income. 42 U.S.C.A. § 404(d)(5);
20 C.F.R.§ 404.503(b)(5). Under these circumstances, the Agency should pay each such
child in equal parts. Id. Consequently, the relevant inquiry is what priority level Ms. D~'s children occupied.
A child entitled to benefits at the second level of priority must meet certain threshold
requirements: (1) the child must have applied for benefits; (2) the child must have
been unmarried at the time of the application; and (3) the child must either be under
the age of eighteen (nineteen if a full-time student), or be disabled prior to the
age of twenty-two. See 20 U.S.C.A. § 402(d)(1) (2007); 20 C.F.R. § 404.350. In the case at hand, neither
Lonnie nor Ms. D~'s other two children had filed an application for child's insurance
benefits, all of the children were over the age of nineteen, and there is no evidence
that any of the children were under a disability prior to age twenty-two. Because
none of the children met the threshold requirements at the time of Ms. D~'s death,
the remaining requirements at the second level of priority are irrelevant, and none
of the children fall under the second level of priority. See 42 U.S.C.A. § 404(d)(2); 20 C.F.R. § 404.503(b)(2). Ms. D~'s three children fall
under the fifth level of priority because they meet the Act's definition of a child,
and they do not qualify under the second level of priority. 42 U.S.C.A. § 404(d)(5);
20 C.F.R. § 404.503(b)(5). Thus, the Agency should pay Ms. D~'s three children, including
Lonnie, in equal parts.
For the above reasons, we believe that Lonnie is entitled to receive his proportion
of Ms. D~'s underpayment because Texas law allows for an adopted child to inherit
from his natural parents.
In summary, we believe that the wage earner validly adopted Ms. C~ as her daughter
under state law and that Ms. C~ is, therefore, entitled to receive the underpayment
due the deceased wage earner.
Tina M. W~
Regional Chief Counsel
By: ____________________
Anne L. H~
Assistant Regional Counsel