TN 13 (11-10)
SI 02003.025 IAR Payment Processing for Exception Cases and Proration Cases
A. Policy for underpayments that involve attorney or eligible non-attorney fee payment, dedicated account, or installment payment cases
1. Attorney or eligible non-attorney fee payment cases
Section 302 of P. L. 108-203, requires SSA to review the individual's file to determine if an attorney or non-attorney fee agreement or petition has been approved by the FO or the Office of Hearing Operations (OHO). If so, we pay the fee to the designated attorney or certified non-attorney if there is a U/P remaining after the FO paid the State the IAR amount claimed on the SSA-L8125-F6 (Notice of Interim Assistance Reimbursement).
2. Dedicated account cases
P.L. 104-193 requires SSA to deposit the residual amount of past-due SSI benefits (including any Federally administered State Supplement) due an eligible individual under age 18 into a dedicated account, if the past-due SSI benefits including any federally administered State Supplement exceed six times the FBR plus any Federally administered State supplement. The residual amount of past due SSI benefits is the amount remaining after IAR payments to a State, payment of attorney fees, and recovery of a prior overpayment.
Effective May 22, 2006, all dedicated accounts are installment cases based on the change to the law explained in SI 02003.025B.3. and SI 02101.020.
3. Installment cases
P.L. 104-193 requires that past-due SSI benefits (including any federally administered State supplement but minus any reimbursement for IAR) equal to or exceeding twelve (12) times the FBR including any federally administered State supplement be paid in installments under the conditions set forth in SI 02101.020.
P.L. 109-171 changed the formula for determining whether SSI past due benefits must be paid in installments. Effective May 22, 2006, the new installment formula (after IAR reimbursement, payment of any representative fee, and recovery of a prior overpayment) is three times the FBR plus any federally administered Optional State Supplement (OSS) payment. For information about installment payments, see SI 02101.020.
B. Procedures for paying retroactive SSI benefits when IAR is involved
1. Summary of the rules that affect payment of retroactive SSI
P.L. 108-203 requires SSA to withhold and make direct payment of all or part of the authorized fee to an attorney or non-attorney whom SSA has found eligible for direct payment. These requirements apply to fees authorized under the fee agreement or fee petition process. The law specifies that direct payment must occur after any IAR is paid to the State. It also specifies that the past-due benefits for dedicated account purposes and installment payment purposes are those remaining after any withholding for payment of the attorney or eligible non-attorney's fee. Therefore, SSA will pay all or part of the attorney or eligible non-attorney's fee when an underpayment remains after the FO has paid the State the amount claimed on the IAR Payment Pending accounting form. For more information about the fee process, see GN 03920.017, GN 03920.031, and GN 03920.033.
2. FO prepayment steps for IAR payment pending cases
Follow these instructions to prepare for issuing retroactive SSI benefits when the underpayment cannot be computed on the SSR:
Manually compute the underpayment for the entire period.
Determine if the total U/P requires processing under the dedicated account, installment, attorney or eligible non-attorney procedures in GN 03930.030., SI 02101.010., and SI 02101.020.
When the underpayment cannot be computed on the SSR, prepare an SSA-L8125-F6 (IAR Payment Pending Case). Send it to the State or local agency by mail or fax to obtain the amount of IAR the State is due.
Following the instructions in SI 02003.024, complete the claimant’s identifying information including payee and retroactive amount due summary data on the manual SSA-L8125-F6. The SSA-L8125-F6 form tells the State to complete the form and return it to the servicing FO within 10 working days.
For Attorney or Eligible Non-attorney Fee Payment, Dedicated Account, or Installment Payment information, see GN 03920.017, SI 02101.010, or SI 02101.020.
Use the DW01 on MSSICS to establish an issue to control the return of the SSA-L8125-F6 from the State. You should set the control period for 15 working days from the date that you send the SSA-L8125-F6 to the State.
NOTE: If a systems limitation precludes the use of MSSICS to establish an issue to control the return of the SSA-L8125-F6 from the State, use the MDW to set a tickle date for 15 days for the return of the SSA-L8125-F6.
If the SSA-L8125-F6 is not received from the State within 15 working days of the diary control, follow up by either:
Forward a copy of the second request to the RO for handling (or follow any supplemental RO instructions) if the State fails to respond to the second request within 10 working days of the date the second request was forwarded to the State. If the State fails to return the form within 15 working days of the second request, SSA will release the retroactive amount to the SSI individual to protect the individual from hardship that may arise from the State's failure to adhere to SSA IAR processing requirements.
3. FO steps for releasing IAR payment to State
Upon receipt of a completed SSA-L8125-F6:
Send an A-OTP to the State for the amount shown in number 2 of the “State's Account of Reimbursement Claimed” section of the SSA-L8125-F6;
If the remaining past due benefits are covered by the Dedicated Account, Installment, Attorney or Eligible Non-attorney Fee provisions, issue an A-OTP and process the case following the instructions in SI 02101.010 - SI 02101.020.
Complete the bottom portion on page three of the SSA-L8125-F6 and fax a copy of the paper form to the appropriate electronic folder. Send the original form to the IAR regional coordinator in the RO.
Prepare the manual notice, if applicable, following SI 02101.010 - SI 02101.020. The system is able to produce an automated notice in most situations.
NOTE: Complete the claimant’s identifying information including payee and retroactive amount due summary data. The SSA-L8125-F6 form tells the State to complete the form and return it to the servicing FO within 10 working days.
4. No IAR due State
If the completed SSA-L8125-F6 indicates the State is not due IAR, release the past due benefits to the individual or the representative payee or legal guardian unless the dedicated account, installment, attorney or eligible non-attorney fee instructions in SI 02101.010 - SI 02101.020 apply. If so, follow those instructions.
NOTE: The GR code must be deleted before releasing the past due payment to the individual.
C. Procedure for returned IAR checks
1. IAR Check Returned to SSA
The State may return an IAR check to the FO for various reasons (e.g., the check was misdirected or is not negotiable).
The returned IAR amount may be in the form of the SSI check or a check issued by the State agency.
Treat both types of returned IAR checks as a refund in accordance with SM 01315.075 and SM 01315.100 if it is reissued to a State agency.
If the State IAR office returns an IAR check to the FO because it was erroneously sent to the State, reissue the returned check to the recipient or his or her representative payee or legal guardian in accordance with current SSI payment procedures. NOTE: Do not reissue the check to another State for any reason.
2. Returned IAR check due the recipient
If the recipient mistakenly returns the residual IAR check to SSA, follow the returned check procedure in SM 01315.020 and SM 01315.042.
D. Procedure for payment to State when recipient dies or disappears
Pay the State via A-OTP; and
NOTE: The system will generally accept only one A-OTP in death cases. If we issued an A-OTP and an additional payment is due, pay via manual OTP. However, a maximum of two A-OTPs can be issued on a deceased individual's record with surviving ineligible spouse and if a valid unpaid GR code is also on the record. For information about A-OTPs and surviving ineligible spouses, see SM 01901.154.
Record the date of death on the manual SSA-L8125-F6; and
Send the SSA-L8125F-6 to the State per SI 02003.040.
E. Procedure for non-receipt of IAR reimbursement payment
Take the following steps to reissue the check to the IAR agency.
1. Identify that we issued the payment to an IAR agency. Review the PMTH field of the SSR. Payflag 1 of PMTH will reflect either a type 2 (underpayment) or type 4 (A-OTP). Payflag 3 will reflect “1” for any IAR payment;
2. Transmit the non-receipt on the Missing Check (UPMC) screen in MSSICS Direct SSR Update. For information on using the UPMC screen, see MSOM BUSSR 003.013; and
NOTE: If you are unsure if the payment went to the correct IAR address, the FO Management Support Specialist (MSS) or Operations Supervisor (OS) can the check the Treasury's Check Information System to determine the address where the check was mailed.
3. Reissue the check via A-OTP to the IAR agency as soon as possible. Include the complete IAR agency address on the One Time Payment Address (UPOA) screen. For information on using the UPOA screen, see MSOM BUSSR 003.023.
Type 2 - Underpayment
If the missing payment is type 2 (in payflag 1 of PMTH), the underpayment was calculated and generated by the system. A type 2 check must be replaced with an A-OTP using the same months as the original type 2 check. If a type 2 IAR check is returned and posts to the SSR, the system may incorrectly generate another type 2 payment to the claimant. The only way to issue a replacement check to the IAR agency is to reissue the funds by A-OTP before a returned check is posted to the SSR. If further development is needed prior to issuing an A-OTP, prevent automated release of the underpayment by posting a U TAC to the SSR via the Underpayment Processing (UOUP) screen in Direct SSR Update. Once an A-OTP is issued, you can remove the U TAC. For more information about using the UOUP screen, see MSOM BUSSR 004.018. For information about processing type 2 underpayments, see GN 02406.205.
Type 4 - A-OTP
If the missing payment is type 4 (in payflag 1 of PMTH), reissue it as an A-OTP addressed to the IAR agency for the same months as the original A-OTP. It is also possible for a returned A-OTP to result in a type 2 underpayment being issued to the claimant. Post a U TAC to the SSR via “Underpayment Processing” in Direct SSR Update to prevent the automated release of the underpayment if there will be a delay in issuing the replacement A-OTP.
NOTE: The GRC code in the MPMT segment of the SSR will change from P (IAR check paid for initial claim) or G (IAR check paid for post-entitlement) to C (IAR check returned) if the IAR check is returned. However, GRC code C is informational only, it will not cause the next retroactive payment to be released to the IAR agency. Only GRC codes of R (pending IAR case for initial claim) or F (pending IAR case for posteligibility) will cause a retroactive check to be sent to the IAR address. For information about how the system updates the GR code, see SM 01005.625.