Mar 31, 2016

Treasury Deliberately Delaying Payment Of Social Security Benefits

     Here's a note that a legal assistant at my firm made of a conversation she had with Social Security's Representative Call Center (RCC) in Baltimore about why one of the firm's clients hadn't been paid her back benefits:
TC [Telephone all] RCC (877) 626-6363. It [the client's money] was released to the Treasury Dept. on the 23rd and she said every month the Treasury has a date that they stop processing cks until the 1st of the next month; this month it was 18th. So all the claims they processed will not be released until April 1st.  She said this has been going on for some time and the cut off is usually in the 20s of the month but for some reason this month it was earlier.
     Oddly, one person posted a comment on this blog yesterday saying that they had heard the same thing.
     Let me explain one thing. The Social Security Administration doesn't write checks or initiate direct deposits of Social Security benefits. That's done by the Department of the Treasury. All Social Security does is certify to Treasury that the payments should be made.
     I had long suspected that Treasury was deliberately delaying payments at the end of each month.  Generally, neither my firm nor our clients get paid Title II Social Security benefits in about the last week of each month, then there's a surge in payments early in each month as the money that was held up at the end of the preceding month is released. Payments under Title XVI, Supplemental Security Income, don't seem to be affected. It's only Title II benefits that are affected. What I don't understand is why Treasury is doing this. It seems inappropriate to me.

8 comments:

Anonymous said...

Try doing social services in Illinois, state hasn't paid us in a year. Talk to me in 8 or 9 months of NO payment.

Anonymous said...

I retired from the SSA 18 yrs ago and for many yrs before that, my fellow CRs & I had been aware of the Treasury payment delays. I don't remember ever hearing an explanation for it.

Anonymous said...

I am pretty sure it is due to the Prompt Payments Act (correct title?). There is a law that say that if the U.S. government does not pay certain contractors, vendors, etc. within a specific time, they have to start paying interest. SS reps on not on the list of vendors (nor are claimants). So, I believe that when they get near the end of the month, Treasury drops everyone else, and just focuses on the payees that they will have to pay interest to if the go past the first of the next month. Then they play catch up.

Check out: https://www.law.cornell.edu/uscode/text/31/subtitle-III/chapter-39

Anonymous said...

There has always been a cut-off date when the current operating month changes. Processing after that date applies to the following month. The exact date changes from month to month depending on the calendar but it follows a schedule. Nothing conspiratorial here so put the tin foil hats away.

Anonymous said...

It was noticeably early in April. We always assumed it was around the 25th of the month, except for SSI

Anonymous said...

Assuming that you’re referring to regular monthly Social Security (Title II) benefits, since 1997 they’ve been assigned a “payment cycle.” Before then, benefits were paid on the 3rd of the month; since then, new beneficiaries have been assigned to one of four payment dates based on their birthday. This helps to spread out the SSA workload. It doesn’t apply to SSI, which continues to be paid on the 1st (often advanced to the previous month if the 1st is a weekend or holiday). For more information, see https://www.ssa.gov/oact/progdata/cyclicalpay.html.

Caroline Kelly said...

There is a Monthly Systems Calendar which determines payment dates and cutoffs, etc, maintained by the Treasury. They refer to the COM (Current Operating Month), which is usually around the 20th. If PE (post-entitlement) changes are made on a record, they have to be done before certain cutoff dates, eg., for PE changes that do not affect the payment amount (name correction, payee address, DD request/change/delete, etc), for PMT Cycles 2, 3, 4, the "window" of time that changes will take effect is from the end of COM up until the 6th weekday before the payment date. For changes that will affect payment amount, the cutoff dates are based on ssn terminal digits. There is a T2 and T16 MoSysCal. There are cutoffs for single payments, current monthly payments, prior monthly accruals, garnishment payments, critical payments, etc. There are different cutoffs for whether the PE change is related to the PMT amount or not (as I mentioned above).

Also, when changes are reported to SSA employee (or worked on by an SSA employee in the PSC) is not necessarily the same day the changes are made to the record, nor is that the same day that the systems update runs (usually run overnight, so the change may have the following date).

It's much more complicated than that - all SSA components have access to the MoSysCal and the Service Reps at the FOs will likely tell you what is the xxxxx cutoff date for xxxxx month, if you need it. Most SSI beneficiaries who change payees/direct deposit info/addresses often know the cutoff dates for those PE changes.

(The FOs CAN force AOTP (a one-time payment, a critical payment of sorts) that goes out almost immediately. And, of course, they can write checks for critical payments in the office.)

Basically... sounds like what your coworker learned is that the T2 cutoff date for PDB is likely the 18th of that month... and that may just be for that specific situation. Sounds like the PSC's calculations were done after the cutoff date so that PDB PMT won't be released until the following month.

I am not one to usually defend SSA, but the system (and its limitations) are based on this complex calendar.

Anonymous said...

Just got a bunch of fee checks in today...no surprise.