TN 38 (02-06)

SI 01120.022 Conserved Funds When Formally Designated Agent Changes

A. Background

1. Funds Returned to Paying Agency

An agent (payee) designated formally by an agency or court may conserve funds not used for a ward's (beneficiary's) current needs. If there is a change of agent, the former agent must return these conserved funds to SSA or other paying agency (e.g., Veterans Administration).

2. Funds Reissued

SSA or another paying agency may reissue accumulated funds to a new payee or directly to the beneficiary. The reissued funds may be paid in a lump sum or in installments and may be combined in a single check with a current month's benefits or an underpayment.

B. Policy - Conserved Funds Returned to Agency

1. Conserved Funds as Resources

In general, conserved funds are a countable resource for the beneficiary while SSA or another agency is holding them. This is because the beneficiary:

  • owns the funds; and

  • is legally entitled to use them (or have them used on his or her behalf) for his or her own support and maintenance.

NOTE: See SI 01120.023 for a discussion of when conserved funds returned to SSA by the payee are not counted as resources.

2. Reissued Funds Not Income

Conserved funds are not income to the owner when reissued because they are not new funds. Conserved funds are a resource and only change from a non-liquid to a liquid resource when they are reissued.

3. New Funds Issued Subject to Income Counting Rules

If a single check contains both reissued funds and new funds, the new funds that have not been previously charged for a prior month are subject to income-counting rules.

C. Procedure - Title II Conserved Funds Reissued

1. Program Service Center Action

If SSA is holding conserved title II funds pending representative payee development and SSI eligibility is involved, the Program Service Center uses the Processing Center System (PCACS) to alert the servicing FO of reissuance of conserved funds.

2. FO Action

Upon receipt of the PCACS alert:

  • advise the eligible individual or representative payee to contact the FO as soon as he or she receives the reissued funds;

  • control the case manually because the MBR/SSR interface will result in an automatic reduction of SSI benefits upon reissuance of the conserved funds;

  • correct the unearned income posted on the SSR by subtracting the amount of conserved funds reissued and inputting the correct amount of income for the month of reissuance.

D. References

SI 01120.023, Return of Conserved Funds by a Payee

SI 01130.600, Exclusion of Retroactive Title II and XVI Payments

GN 00603.001, Conservation of Benefits

GN 00603.055, Transfer of Funds Returned to SSA

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SI 01120.022 - Conserved Funds When Formally Designated Agent Changes - 02/09/2006
Batch run: 02/09/2006