Effective for past-due benefits paid on May 22, 2006 or later, Section 7502 of the
Deficit Reduction Act of 2005 (P.L. 109-171), enacted February 8, 2006, changes the
formula for determining when SSI past-due benefits are paid in installments.
If the past-due benefits equal or exceed 3 X (FBR+OSS) but do not exceed 6 X (FBR+OSS), after IA reimbursement and/or direct payment of representative
fees, these payments must be paid in installments, but do not require a dedicated
If the past-due benefits are greater than 6 X (FBR+OSS), after IA reimbursement and/or
direct payment of representative fees, these payments generally must be deposited
into the dedicated account at 6-month intervals. The first and second installment
payment cannot exceed 3 X (FBR + OSS).
The system determines (after any prepayment review, IA reimbursement and/or direct
payment of representative fees) whether installments will be made. Diaries (EA and
IN) are set and alerts (E1 and I6) are sent notifying the FO that the past-due benefit
are scheduled for an Automated One-Time Payment (A-OTP) into the dedicated account.
An automated notice is generated explaining the current installment payment and that
the next payment will be made in 6 months.
However, even though the benefits must be deposited into a dedicated account, the
installment procedures do not apply if the individual:
has a medical condition that is expected to result in death within 12 months, or
is ineligible at the time of payment and is likely to remain ineligible for the next
If one of the above exceptions applies, the entire amount should be deposited into
the dedicated account using the automated one-time payment (A-OTP) process.