Dec 29, 2013

The Last Drop

    Sue Regan died on November 5. The U.S. Treasury made a direct deposit to Ms. Regan's account at a credit union for one month's Social Security benefits on November 13. The money was supposed to have been paid since it was for October when Ms. Regan was still alive. However, the credit union made a mistake and sent the money back to the Treasury. A Dallas television station reports that this is a mistake commonly made by overly eager financial institutions. How long will it take for Ms. Regan's family to get the money back? How often do families fail to recognize the mistake? How often does Social Security or the Treasury correct this sort of mistake without prompting?


Anonymous said...

Who cares how long it takes for the family to get the money back ---she's dead and certainly doesn't need it for financial support.

Overpayments are a much bigger issue given that we the tax payers almost never get these improperly received funds back in their entirety.

Anonymous said...

I am not at all sure that it is the Credit Union that initiated the refund. My understanding is that this is done by SS/Treasury for any checks issued after death.

In my family, my mother in law died on November 1, 2010, and received a check on 11/3/2010 (She had been getting checks for thirty years so was one of those still getting on the third)

Contacted SSA and filled out form by those entitled to underpayment (not Estate) and payment was sent in a few weeks.

Does everyone know to do this. No. My guess is that much of this money is never sent out again.

While easy enough to do, my believe is that payments made after death, even if due, are paid not to the deceased but to the person entitled under §404.503 (not usually the estate) and that is what causes the problem.

Anonymous said...

ssa-1724 is routinely sent out to the last address on file. This is done by payment center. FO's often help people file the SSA 1724. Much of this is automated vai funeral homes and the EDR, Also FI do this as well. does not effect most elderly since they get payments on the 3rd no other days of the month. Likely to be fix by the time it is real problem. Average FO SR's deal with 1724's 4 times a month

Anonymous said...

I don't think it is a mistake; I think the bank is supposed to send any deposits that come in after the person dies.

Anonymous said...

It is actually much more complicated than a yes/no decision.

Obviously, all benefit payments made after death which WERE NOT DUE to the deceased are subject to reclamation (or collection as overpayments in cases involving a deceased claimant with a rep payee).

Say Bob kicks the bucket. If a deposit he was actually due is received by the bank after his death, the bank's action will normally depend on when they knew of Bob's death.

If they know Bob is dead, any and all deposits the bank receives from the date they learned of his death and going forward are supposed to be returned to Treasury by the bank.

On the other hand, if the deposit is received and deposited BEFORE the bank found out Bob had popped his cork, neither SSA nor Treasury will reclaim the funds because the money was actually due to Bob.

However, Treasury's Green Book gives the bank the option of either returning the funds or holding them to await a reclamation request.

If the bank asks the local SSA office about funds deposited prior to their learning of Bob's death, the SSA office's response is dependent upon whether the funds at issue were actually owed to the deceased. If the check was actually due to Bob, the SSA office will advise the bank that no reclamation request will be sent and the funds will become available to the account holders.

Also, payments returned by a bank which were received prior to death but which were returned by the bank after death are actually not underpayments and aren't supposed to be treated as such. They instead are considered to be an asset to the deceased's estate.

The SSA POMS on this is GN 02408.650 and is actually very clear for an SSA program policy.