Identification Number:
GN 02402 TN 154
Intended Audience:See Transmittal Sheet
Originating Office:DCBFM OFPO
Title:Direct Deposit - Title II and Title XVI
Type:POMS Transmittals
Program:All Programs
Link To Reference:
 

PROGRAM OPERATIONS MANUAL SYSTEM
Part GN – General
Chapter 024 – Checks
Subchapter 02 – Direct Deposit - Title II and Title XVI
Transmittal No. 154, 01/08/2020

Audience

FO/TSC: CS, CS TII, CS TXVI, CSR, CTE, FR, OA, OS, RR, TA, TSC-CSR;
PSC: BA, CA, CCRE, CS, DS, ICDS, IES, ILPDS, IPDS, ISRA, PETE, RECONR, SCPS, TSA, TST;
OCO-OEIO: BIES, BTE, CCRE, CR, CTE, FCR, PETL, RECOVR;
OCO-ODO: BTE, CCE, CR, CST, CTE, EHI, LCC, LSC, PAS, PCS, PETL, RC, RCOVTA, RECONR, RECOVR;

Originating Component

OFPO

Effective Date

Upon Receipt

Background

The Office of Payment and Recovery Policy (OFPO) is updating instructions for the GO Direct Campaign and Direct Deposit to Trust Accounts to reflect current best practices. .

Summary of Changes

GN 02402.004 “Go Direct” Campaign

This section provides minor edits to clarifying the GoDirect campaign and to provide updates to sections of outdated policy. The Treasury sponsored GoDirect campaign still involves some of the same forms of media outreach (e.g. letter inserts, websites) to encourage direct deposit enrollment. However, responding to GoDirect inquiries is updated and prior direct deposit enrollment deadlines are removed. Lastly, we made several content revisions and reformatted the sections where necessary.

Subsection A. Provides minor grammatical edits and additional POMs references to improve readability and understanding of acceptable direct deposit accounts. This subsection also includes a new “NOTE” section that references exemptions to the direct deposit mandate. This subsection also provides the Spansih telephone line.

Subsection B. Removes directions informing beneficiaries and recipients of direct deposit enrollment deadlines. The deadline has passed and its date is no longer relevant to this policy.

 

GN 02402.060 Direct Deposit to Trust Accounts

This section provides additional information on acceptable trust accounts to receive SSA payments. The updates clarify the type of trust accounts that are deemed acceptable, as well as, expanding upon acceptable titling of these accounts.

Subsection A Defined Totten trust accounts and its characteristics that may be seen in other similar acceptable trust accounts.

Subsection B Explained Totten trust accounts and fellow trust accounts resembling similar characteristics would not impede upon assignment of benefits.

Subsection C Inserted a section clarifying other types of acceptable trust accounts.

Subsection D Expanded upon this subsections titling examples of Totten trusts, as well as, similar acceptable trust account titling.

Subsection E Updated and corrected references.

GN 02402.004 “Go Direct” Campaign

A. Introduction

In 2005, the Bureau of the Fiscal Service (Treasury) and the Federal Reserve Bank (FRB) began a campaign named “Go Direct ®” to increase direct deposit for U.S. Government payments. The Social Security Administration supports this effort.

Effective May 1, 2011, Treasury requires nearly all individuals filing for Title II and Title XVI benefits MUST select either the direct deposit option or the Direct Express® debit card option during the interview process for Social Security benefit payments. When discussing direct deposit during initial claims interview refer to GN 02402.005C.

NOTE: There are rare instances that would permit exemptions from Treasury's electronic payment requirement. For more information, see GN 02402.001.B.

Treasury and FRB work with partners to assist beneficiaries in receiving their benefits directly into their accounts at financial institutions. Some of these partners are banks, credit unions, social service agencies, community-based groups, and other organizations that are familiar to the beneficiaries.

The Go Direct ® message reaches beneficiaries in various ways, including letters, rallies, media outreach, and websites in English and Spanish. You can visit these websites at www.GoDirect®.org or www.DirectoASuCuenta.gov or call Go Direct ® at 1-800-333-1795 (English) and 1-800-333-1792 (Spanish).

B. How to respond to telephone inquiries about Go Direct®

If you receive a call from a beneficiary or recipient who asks if Go Direct ® is really a legitimate program sanctioned by the U.S. government,

  • assure callers the program is legitimate;

  • obtain the required information to make the input for direct deposit, if the beneficiary or recipient wishes to establish or change direct deposit for benefits;

  • continue to process the direct deposit as usual;

  • discuss the Direct Express® debit card program, which we explain in the Direct Express® section, GN 02402.007;

C. References

  • GN 02402.001, Direct Deposit as a Form of Electronic Payment

  • GN 02402.005, Direct Deposit Information for All Types of Interviews

  • GN 02402.007, Direct Express® Debit Card Program

GN 02402.060 Direct Deposit to Trust Accounts

A. Description of Totten trusts and similar accounts

A Totten trust (also called a bank-account trust) is a tentative trust in which a grantor (depositor) makes himself or herself the trustee of his or her own funds for the benefit of another (the trust beneficiary). Typically, the following are characteristics of Totten trust accounts and accounts similar to Totten trusts:

  1. 1. 

    Grantor deposits funds into a savings account and indicates, either by the account titling — for example, the account may have the phrase “in trust for” in the title — or by filing a writing with the bank, that the grantor is the trustee of the account for another person.

  2. 2. 

    Grantor may revoke a Totten trust at any time.

  3. 3. 

    Grantor names a trust beneficiary to inherit the funds in the account upon the grantor’s death.

  4. 4. 

    Ownership of the trust principal (the funds in the account) passes to the trust beneficiary upon the grantor’s death.

Totten trusts are valid in most jurisdictions, but other jurisdictions have held them invalid because they are too tentative. In particular, they generally lack formal requirements and do not state a trust intent or purpose.

B. Policy for direct deposit to Totten trusts or similar accounts

Direct deposit of a beneficiary’s or recipient’s benefits into a Totten trust or accounts similar to Totten trusts, as described in Part A of this section, does not constitute an assignment of benefits because the depositor (grantor) retains legal ownership and control of the benefits after they are deposited into the account. Therefore, direct deposit into this kind of account may be approved.

C. Policy for direct deposit to other trusts or trust accounts

Direct deposit of a beneficiary’s or recipient’s benefits into a trust or trust account that does not fit the description in Part A of this section usually will constitute an assignment of benefits because the grantor — whose benefits are at issue — usually does not retain legal ownership and control of the benefits after they are deposited into the trust or trust account. Most importantly, the grantor usually is not the trustee.

Therefore, direct deposit into a trust or trust account — other than a Totten trust or similar account that fits the description in Part A of this section — generally may not be approved. Consult with your regional trust lead, as appropriate, for an evaluation of the trust or (trust) account at issue.

For more information about assignment of benefits, refer to SI 01120.200G or SI 01120.201J.

D. Titling examples for Totten trusts and similar accounts and other types of trusts

The way an account is titled usually reflects the nature of the account and thus usually provides a helpful indication of whether an account is a Totten trust or similar account (direct deposit of benefits permitted), on one hand, or another kind of trust or trust account (direct deposit of benefits generally not permitted), on the other.

EXAMPLES: Titling of Totten trusts and similar accounts

  • Totten Trust Account Title (Direct Deposit Permitted)- “Sean Johnson in trust for April Johnson”

  • Totten Trust Account Title (Direct Deposit Permitted)- “Sean Johnson payable upon death for April Johnson”

EXAMPLES: Titling of other types of trusts and trust accounts

  • Trust Title (Direct Deposit Not Permitted)- “The Sean Johnson Special Needs Trust”

  • Trust Title (Direct Deposit Not Permitted)- “The Sean Johnson Irrevocable Trust”

  • Trust Title (Direct Deposit Not Permitted)- “The Sean Johnson Counties Pooled Trust”

  • Trust Title (Direct Deposit Not Permitted)- “The Sean Johnson Community Master Trust Agreement”

NOTE: The titling of an account is not necessarily the determining factor of whether the account constitutes a Totten trust.

E. References

  • SI 01120.200 Trusts-General, Including Trusts Established Prior to 1/1/00, Trusts Established with the Assets of Third Parties and Trusts Not Subject to Section 1613(e) of the Social Security Act

  • SI 01120.201 Trusts established with the assets of an individual on or after 1/1/00

  • GN 00602.075 Transfer of Benefits to a Trust


GN 02402 TN 154 - Direct Deposit - Title II and Title XVI - 1/08/2020