Identification Number:
EM-18012 REV 4
Intended Audience:All RCs/ARCs/ADs/FOs/TSCs/PSCs/OCO/OCO-CSTs
Originating Office:ORDP OISP
Title:Clarifying State Overpayment Liability for Minors in Foster Care – Instructions Will Follow Shortly
Type:EM - Emergency Messages
Program:Title II (RSI); Title XVI (SSI)
Link To Reference:See References at the end of this EM
 
Retention Date: December 9, 2020

Revision 4:

    • Updated Section E to change the heading to Halting collection activity for Title II cases,
    • Removed step 4 from the chart in Section E,
    • Updated Section F for resuming collection activity for Title II deceased debtors,
    • Updated Section G to change the heading to Halting collection activity for Title XVI cases,
    • Added NOTE to Section G regarding administrative finality,

A. Purpose

This emergency message (EM) provides interim guidance for handling overpayments involving minors who have a State serving as their representative payee during the period when the minor is in foster care under the responsibility of the State.

B. Background


    Effective April 13, 2018, Section 104 of the Strengthening Protections for Social Security Beneficiaries Act of 2018, “Clarifying Overpayment Liability for Child in Child Welfare System,” requires SSA to hold the State liable for the repayment of any overpayment(s) made on behalf of a represented minor beneficiary or recipient in a month in which the minor was in foster care under the responsibility of the State and the State was the representative payee.

    This applies to any new Title II and Title XVI overpayment determinations made on or after the date of enactment.

    For Title II cases, this also applies to any overpaid amounts that we have not recovered as of the date of enactment.

C. Policy

    As of the legislation’s effective date, when we determine that we overpaid a Title II or Title XVI minor beneficiary or recipient who was in foster care under the responsibility of the State (including county and local governmental entities/agencies) and the State was serving as the minor’s representative payee at the time the overpayment was incurred, the State is solely liable for repaying the overpayment.

    In addition, for Title II, we will no longer consider the minor liable for repaying any outstanding overpaid amounts that we have not recovered as of April 13, 2018.

    For Title II and Title XVI purposes, the term “represented minor beneficiary” means an individual who has not attained 18 years of age in a month in which the individual’s benefits are certified for payment to a representative payee.


D. How to identify a State Represented Minor in Foster Care

    Consider all of the following to identify a beneficiary or recipient who is a State Represented Minor in Foster Care:
    • The type of payee (TOP) field on the Master Beneficiary Record (MBR) shows organizational payee or the type of payee (T) field in the REPY segment of the Supplemental Security Record (SSR) as listed in GN 00501.013 indicates the minor is in foster care;
      Important: Most State foster care agencies are coded as “Social Agency” in eRPS.
    • The foster care status is Beneficiary/recipient in foster care and the type of payee is State, county, or local government payee on the beneficiary details screen in eRPS;
    • The Rep Payee Organization Name field in eRPS indicates a State or State Agency is the rep payee (ex: Franklin County Children’s Services); and
    • The beneficiary or recipient is a child under age 18.

    NOTE: Verify the accuracy of the payee information before following the guidance outlined below.

E. Halting collection activity for Title II cases

    Beginning November 26, 2018, the Debt Management System (DMS) performs a monthly batch run to add a new Section 104 protest code on all active debts involving Title II minor child beneficiaries (BIC Cs) who we believe meet the criteria for Section 104.

    The transaction code on the Recovery of Overpayments, Accounting and Reporting (ROAR) record shows, “TC 23-6 -- SECTION 104 LEGIS.”

    The system automatically sends a Title II Halting Notice to these individuals.

    The notice briefly describes the impact of the legislation and explains that SSA is halting overpayment collection efforts while we verify whether the BIC C was in foster care with the State serving as rep payee when the overpayment occurred.

    See the sample copy of this notice below:


    In addition, the system annotates the Central Office Message Data Line (CO MSG) for each affected MBR with the following message that cannot be overlaid: “Section 104 Legislation – Do Not Delete.” The Central Office message is shown below the Special Message on the MBR.

    NOTE: The monthly-automated systems run will reapply the “SECTION 104 LEGIS” protest code to any record where the protest code was replaced by a subsequent input. A new halting notice will be sent to the beneficiary to advise them that we are stopping collections again due to this legislation and no action is required at this time.

    DMS will stop all efforts to recover any outstanding overpayment(s) for this affected group.

    Process any manual overpayment determinations or cases that DMS was unable to process for a Title II minor who is in foster care under the responsibility of the State, and for whom the State is serving as the minor’s representative payee (i.e., State Represented Minor in Foster Care), using the following instructions:



      IfThen
      You are taking an adverse action which will cause an overpayment on the record of a minor while the State is serving as the payee,Take normal action to input the adverse action.

      DMS will automatically input the new TC23-6 protest to stop collection activity, send a notice, and annotate the new Central Office message to the MBR.

      This is a case that DMS was unable to process or you notice an overpayment has already been established on the record of a minor while the State is serving as the payee and recovery has begun or has not begun, (For PCs only)
        • Process the exception per SM 00610.415 and process the Section 104 actions via DMS only;
        • Input a protest indicator of “18 Section 104 LEGIS” via the Protest/Stop Recovery Request (PC) (DRPR) in DMS;
        • Document the Remarks screen (RMKS) in DMS with the following language:
          • Possible Section 104, halting the overpayment collection. See EM-18012;” and
        • Input a special message with the following language: “Section 104 Legislation – Do Not Delete.”

        NOTE: If a minor requires a refund after the date of enactment, do not process any refunds until further notice. Document this issue on the RMKS screen in DMS by doing the following:
        • Establish a new remark titled “Section 104 Refund Request,” on the Remark Name field, and
        • Enter detailed remarks about the refund request.
      You are processing any overpayment protest (e.g. waiver, reconsideration) and you notice a Section 104 protest code already on the record,
        • Take no action to update or change the protest indicator;
        • Document the RMKS screen in DMS by doing the following:
          • Establish a new remark with the date and type of the protest on the DMS Remark Name field:

            Example: In the Remark Name: “Section 104 Waiver Request Filed.” In the remarks text: “Waiver filed for C1 by Hope Foster Care Agency 10/25/18. Section 104 case. No action taken per EM-18012;” and

        • Scan a copy of the protest and documentation into the Non-Disability Repository for Evidentiary Documents (NDRed) or the electronic file (whichever is applicable).

        NOTE: The minor (BIC C) should have already received the Title II halting notice. Do not send another notice with this action.

    NOTE: Process DUMAS exceptions as normal per SM 00690.000 Daily Update Master Accounting System (DUMAS).

    Additional guidance is forthcoming regarding how to: 1) remove the liability from the affected minors, 2) establish the overpayment to the State, and 3) recover the overpayment from the State or State agencies.


F. Cases excluded from Title II halting of collection activity

    1. Debtors Age 18 Prior to 01/01/1992 and Deceased More than 2 Years

      Beginning January 2020, cases where the BIC C obtained age 18 before 01/01/1992, is deceased, and we halted collection activity, we will resume collection activity for those whose date of death is older than 2 years. These individuals obtained age 18 prior to the implementation of the Representative Payee System (RPS) and there is a lack of records available to determine if they meet Section 104 criteria. The central office message regarding the halting will remain on the record and a new message will be posted that says, “Confirmed Section 104 Legislation Does Not Apply – Protest Removed.” In addition, the system will post a TC71 transaction code to the ROAR record. Because these individuals are deceased, a notice will not be issued.

    2. Conserved funds debts

      For conserved funds debts or other misuse debts, a prior rep payee was found to be solely liable for these types of debt. Therefore, they do not fall under Section 104 criteria.

      NOTE: When Systems attempted to halt collections automatically on debts with an overpayment reason of Conserved Funds, a ROAR exception prevented the automatic halting. Since these debts do not fall under Section 104, PCs should not be taking action to halt collections. As a reminder to the PCs, a new central office message will be posted that says, “DEBT NOT SECTION 104 – DO NOT PROCESS ROAR EXCEPTION.”


    3. Court ordered restitution debts

      For court ordered restitution debts, Section 104 criteria does not apply. Instructions will be forthcoming regarding resuming any court ordered restitution debts where collection activity was halted.

    4. Bankruptcy cases

      If a debtor has filed for bankruptcy, obtain a copy of the petition and stop collection activity via the Record Bankruptcy Petition (DFBP) screen in DMS using the appropriate bankruptcy protest and follow normal business procedures for processing bankruptcy cases (See GN 02215.185 Bankruptcy Proceedings – Overview). The bankruptcy protest is the only protest that will override the TC23-6 code.
G. Halting collection activity for Title XVI cases
      Beginning May 18, 2019, the SSI computations process will post a new MA TAC for Section 104 on all active debts involving Title XVI minor child recipients who we believe meet the criteria for Section 104. The automated post-entitlement notice will include halting language.
      Systems will use the following criteria to identify potential Section 104 cases:
        • The recipient was under age 18 during part or all of the overpayment period;
        • The current or previous payee is/was an organizational payee
        • The overpayment determination is made on or after the date of enactment (04/13/2018).

      Systems will identify potential Section 104 overpayments where the technician must take manual action to stop overpayment collection when the automated process was unable to process the MA TAC.
      Process any manual overpayment determinations for a Title XVI minor child who is in foster care under the responsibility of the State, and for whom the State is serving as the minor’s representative payee (i.e., State Represented Minor in Foster Care), using the following instructions:
IfThen
The overpayment has a balance of $0 and no waiver is pending or approved,
    • Annotate a SSR Remark (CRMK): “Section 104 Legislation – Do Not Delete;” and
    • Take no further action on the record.
A waiver was pending or already approved on the OP Sequence identified by Systems;
    • Do not input the MA TAC;
    • Annotate a SSR Remark (CRMK): “Section 104 Legislation – Do Not Delete;
    • Document the DROC screen MS 04422.010 with the subject, “Section 104 Waiver Request Filed,” and in the remarks text add the following information: sequence number, waiver filed by, date filed, and “Section 104 case;” and
    • Lock the DROC and take no further action.
You are in the process of applying the MA TAC, the current payee is an organizational payee and there is no notice date in the OP Notice Date column on the Excel spreadsheet or the SSR,
    • Review the OPSQ date to determine if Administrative Finality applies SI 04070.000; *see note below
    • When Administrative Finality does not apply, issue a manual overpayment notice via the Document Processing System (DPS);
    • Update the record by entering #2 Update and #19 Direct SSR Update on the MSSI Menu screen MS 04404.002;
    • Select the most recent SSR established;
    • Input a Y next to Overpayment Menu on the UMEN screen MS 00302.003;
    • Input a Y next to Sequence Actions and Decision Processing on the UOMN screen MS 00304.002;
    • Input a Y next to the overpayment sequence number identified by Systems on the UOSS screen MS00304.003;
    • Input a Y next to Update Notice Date, Sequence Rate, Suspend Billing on the UOSM screen MS 00304.005;
    • In the notice date field, enter the current date on the UOSD screen MS 00304.006;
    • Page through the simulated SSR, a BZ diary will show on the DIAR line;
    • Verify that the corresponding OP sequence number identified by Systems has a notice date on the OPSQ line and an MA TAC in the OPDD, TR1 field;
    • Send to the SSR; and
    • Go to the section titled- You applied the MA TAC to the record.
You are in the process of applying the MA TAC, the current rep payee is not an organizational payee and there is no notice date in the OP Notice Date Column on the Excel spreadsheet or the SSR,
    • Issue a manual overpayment notice via DPS;
    • Update the record by entering #2 Update and #19 Direct SSR Update on the MSSI Menu screen MS 04404.002;
    • Select the most recent SSR established;
    • Input a Y next to Overpayment Processing on the UMEN screen MS 00302.003;
    • Input a Y next to Sequence Actions and Decision Processing on the UOMN screen MS 00304.002;
    • Input a Y next to the overpayment sequence number identified by Systems on the UOSS screen MS00304.003;
    • Input a Y next to Update Notice Date, Sequence Rate, Suspend Billing, and put a Y next to add/change/delete overpayment decisions on the UOSM screen MS 00304.005;
    • Enter the current date in the notice date field on the UOSD screen MS 00304.006;
    • Choose option #18 - Section 104 Legislation on UOPD screen MS 00304.008;
    • Page through the simulated SSR, a BZ diary will show on the DIAR line;
    • Verify that the corresponding OP sequence number identified by systems has a notice date on the OPSQ line and an MA TAC in the OPDD, TR1 field;
    • Send to the SSR; and
    • Go to the section titled- You applied the MA TAC to the record.
    • NOTE: Deleting “Y” in the “OR TEN PERCENT” field on UOPD screen when other overpayment sequences must be collected via check adjustment will create a B8 diary. If this occurs, send to the SSR. In a separate transaction, enter a “Y” in the “OR TEN PERCENT” on UOPD for the latest overpayment that should still be collected via check adjustment.
You determine that there is an OP Notice Date in the OP Notice Date column on the Excel spreadsheet or on the SSR (regardless of the current payee),
    • When the OP Amount and the OP Uncollected Balance are the same;

        o Update the record by entering 2/19 on the MSSI Menu screen MS 04404.002;

        o Select the most recent SSR established;

        o Input a Y next to Overpayment Processing on the UMEN screen MS 00302.003;

        o Input a Y next to Sequence Actions and Decision Processing on the UOMN screen MS 00304.002;

        o Input a Y next to the overpayment sequence number identified by Systems on the UOSS screen MS00304.003;

        o Input a Y next to add/change/delete overpayment decisions on the UOSM screen MS 00304.005;

        o Input a Y in Change on the UODC screen MS 00304.007;

        o Choose option #18 - Section 104 Legislation on the UOPD screen MS 00304.008;

        o Run the simulated SSR, a BZ diary will appear to control the overpayment;

        o Verify that the corresponding OP sequence number identified by systems has a notice date on the OPSQ line and an MA TAC in the OPDD, TR1 field;

        o Send to the SSR; and

        o Go to the section titled- You applied the MA TAC to the record.

    • When the OP Amount and OP Uncollected Balance are different amounts:

        o Decrease the amount of the previous decision to the amount already collected;

        o Add a new decision with option #18 on the UOPD screen MS 00304.008 and the amount yet to be collected; and

        o Go to the section titled- You applied the MA TAC to the record.

  • NOTE: Ensure that the amounts are correct by checking that the transaction does not create a new B4 diary or UPX and does not increase an existing OPU or UPX.
You applied the MA TAC to the record,
    • After two business days, query the SSR and look at the NOTC line for codes OPTC01 and/or OPT305.
    • Issue a manual halting notice located in the National tab in DPS, “Section 104 Title 16 Halting Notice,” if the OPTC01/OPT305 do not appear on the NOTC line.
    • NOTE: No manual halting notice is necessary if these codes appear on the NOTC line after the MA TAC is applied.
The debt is the result of court ordered restitution,
    • Do not take any actions, as these debts are not subject to Section 104 legislation.
      The SSI notice process will automatically generate a post-eligibility notice that includes halting language unless an exception applies in NL 00801.010 - Manually Prepared Notices. If the system does not generate a notice, you must send a manual notice using DPS. The halting notice is located in the Overpayment tab and titled, “Section 104 Title 16 Halting Notice.” Like Title II, the halting language briefly describes the impact of the legislation and explains that SSA is halting overpayment collection efforts while we verify whether the beneficiary was in foster care with the State serving as rep payee when the overpayment occurred.

      Additional guidance on how to: 1) remove the liability from the affected minors, 2) establish the overpayment to the State, and 3) recover the overpayment from the State or State agencies is forthcoming.

      *NOTE: If it is determined that Administrative Finality does apply, do not take action to send an overpayment notice. Add the following DROC to MSSICS: Per SI 02201.025A, an overpayment does not exist until the initial notice of overpayment is released. Overpayment sequence XX for months mm/yy-mm/yy is prior to administrative finality of (today’s date). Therefore, we will not send the overpayment notice based on the rules of administrative finality.
H. Remittances
      Remittances for debts potentially affected by the legislation will continue to be processed according to established remittance procedures, per GN 02403.001. When the MBR or SSR have the Section 104 Legislation message or remark, technicians should thoroughly document the Remarks screen in DMS for Title II or the DROC screen in MSSICS for Title XVI with the following information:

      For Title II:

      • Document this issue on the RMKS screen in DMS by typing the following in the Remark Name field: “Section 104 Remittance;” and
      • Enter the following information:

        o Who the remittance is from,

        o Amount of the remittance,

        o Date remittance received,

        o The debt that the remittance should be applied to, if known.


      For Title XVI:
      • Document this issue on the DROC by establishing a new remark titled, “Section 104 Remittance” or for non-MSSICS cases, on an SSA-5002;
      • Enter the following information:

        o Who the remittance is from,

        o Amount of the remittance,

        o Date remittance received,

        o The debt that the remittance should be applied to, if known;

      • Lock the DROC; and
      • Add the following message on the SSR Remarks “Remittance Payment for Section 104- Refer to the DROC”– Do Not Delete.”
I. Foster care agency representative payees
      Managers should set the type of payee code for State foster care agency representative payees to “Social Agency” when creating the organization in eRPS.

      Process representative payee selections related to children in State foster care under normal business practices. For more information about considerations concerning foster care agencies, see GN 00502.159.

J. Handling Inquiries
      If you receive an inquiry requesting an explanation about Section 104, see the following instructions below:
      • Check the SSR, MBR, special message, central office message, or remarks section to determine if the “Section 104 Legislation” appears on the fields;
      • Check the Online Retrieval System (ORS) to determine the date we sent the Title II Halting Notice or Title XVI PE notice with halting language;
      • Explain the following to the individual, if this information is on the MBR/special message or on the SSR remarks section:

        o No action is required at this time;

        o We have taken action on their record to stop collection of the overpayment until we conduct further investigation; and

        o We will notify them in a new notice when we make a determination on their record which could include a refund if applicable; and

      • Follow normal business procedures for addressing their concerns, if the individual does not meet the Section 104 legislation.

      If you receive an inquiry from a State (county or local) agency regarding their repayment process, direct them to contact their agency’s legal counsel.

      Direct all program–related and technical questions to your Regional Office (RO) support staff or Payment Service Center (PSC) OA staff. RO support staff or PSC OA staff may refer questions or problems to their Central Office contacts.

K. References:

GN 02205.001 Liability for Title II Overpayment Recovery
SI 02201.020 SSI Overpayment: Who is Liable (Responsible) for Repayment? Living Overpaid Individual
SI 02201.023 Supplemental Security Income (SSI) Overpayment: Recovery from a Representative Payee
SI 02301.300 Due Process Protections – General
MS 01106.003 Protest/Stop Recovery Request (PC) (DRPR)
MS 01106.019 Protest/Stop Recovery Request (FO) (DRPF)
MS 01106.020 Protest/Stop Recovery Request (TSC) (DRPT)
MS 01107.006 Record Bankruptcy Petition (DFBP)
MS 01109.003 Remarks (RMKS)
GN 00501.013 Explanations for Types of Payees
GN 00502.159 Additional Considerations When Foster Care Agency is Involved
GN 02215.190 Debtor Involved in Bankruptcy Proceedings - FO Procedure
GN 02215.195 Debtor Involved in Bankruptcy Proceedings - PC Procedure
GN 02403.001 Overview of Field Office Remittance Process
SM 00550.080 Type of Payee (TOP) and Custody (CC) Codes
SM 01601.565 Representative Payee Data – REPY
SM 00510.080 Central Office Message Data Line
SM 00610.415 Processing Exception Codes
SM 00690.000 Daily Update Master Accounting System (DUMAS)


EM-18012 REV 4 - Clarifying State Overpayment Liability for Minors in Foster Care – Instructions Will Follow Shortly - 3/10/2020