The Social Security Administration (SSA) occasionally needs to adjust underpayments to beneficiaries.
This blog post aims to provide a clear understanding of the adjustment process, including the procedures for when an underpaid individual is living or deceased, as well as the definitions of legal representatives and “good acquittance.”
- Adjusting Underpayments for Living Individuals
If an underpaid individual is living, the underpayment will be paid to them either in a single payment or by increasing their monthly benefits or lump-sum death payment. If the individual has also received an overpayment, the underpayment will be used to reduce that overpayment, unless recovery of the overpayment has been waived.
- Adjusting Underpayments for Deceased Individuals
If an underpaid individual dies before receiving or negotiating payment, the SSA first applies any amounts due against any owed overpayments. Then, any remaining underpayment is distributed to living persons in a specified order of priority:
a. The deceased individual’s surviving spouse who was living in the same household or entitled to a monthly benefit on the same earnings record.
b. The deceased individual’s child or children entitled to a monthly benefit on the same earnings record (divided equally among them).
c. The deceased individual’s parent or parents entitled to a monthly benefit on the same earnings record (divided equally among them).
d. The deceased individual’s surviving spouse who does not qualify under the first priority.
e. The deceased individual’s child or children who do not qualify under the second priority (divided equally among them).
f. The deceased individual’s parent or parents who do not qualify under the third priority (divided equally among them).
g. The legal representative of the deceased individual’s estate.
3. Distribution of Underpayments to Deceased Beneficiaries
If a person who is qualified to receive an underpayment dies before receiving or negotiating the payment, their share is divided among the remaining living persons in the same order of priority. If there are no remaining living persons, the underpayment goes to the next lower order of priority.
- Definition of Legal Representative
A legal representative generally refers to the administrator or executor of a deceased individual’s estate. It may also include other individuals, institutions, or organizations acting on behalf of an unadministered estate, provided they can give the SSA “good acquittance.”
- Definition of “Good Acquittance”
A person gives “good acquittance” when payment to them releases the SSA from further liability for that payment.
Example: Adjusting an Underpayment for a Deceased Individual
John, a Social Security beneficiary, was underpaid by $5,000 during the last two years of his life. Unfortunately, he passed away before the underpayment could be adjusted. John also had an overpayment of $2,000 from a previous period. Here’s how the underpayment adjustment process would work in this case:
- The SSA first applies the $5,000 underpayment against the $2,000 overpayment that John owed. After this, the remaining underpayment is $3,000.
- The SSA then looks to distribute the remaining $3,000 underpayment according to the specified order of priority:
a. John had a surviving spouse, Jane, who was living with him at the time of his death. Jane is entitled to the remaining $3,000 underpayment, as she is in the highest order of priority.
b. If John did not have a surviving spouse, the underpayment would be distributed to his children, and so on, following the order of priority outlined in the original blog post.
In this example, the SSA adjusts John’s underpayment by first applying it against his overpayment and then distributing the remaining amount to his surviving spouse, Jane.
Conclusion: Adjusting underpayments is an essential process to ensure that Social Security beneficiaries receive the correct amount of benefits. Understanding the steps and priorities involved in this process helps beneficiaries and their families navigate any potential underpayment situations.
https://www.ssa.gov/OP_Home/cfr20/404/404-0503.htm
At Hugo Fierro & Michael Perez, we are a team of committed professionals who possess a profound comprehension of the intricacies associated with Social Security disability claims. We take immense pride in utilizing our expertise to provide tailored guidance and support to our clients. Our proficient team is highly skilled in navigating the intricate nuances of each case, guaranteeing that you receive invaluable insights and customized assistance to address your distinct requirements.