When disabled beneficiaries are receiving Social Security benefits due to drug addiction or alcoholism, certain amounts may be paid in installments.
This post aims to explain the provisions outlined in § 404.480, detailing the various scenarios, limitations, and exceptions associated with the payment of these benefits.
- Amounts subject to installment payments:
Under § 404.480(a), the amounts due for installment payments include:
a. Benefits due but unpaid, which accrued before the month payment was effectuated b. Benefits due but unpaid, which accrued during a period of suspension for which the beneficiary was subsequently determined to be eligible c. Any adjustment to benefits, which results in an accrual of unpaid benefits
- Installment formula:
The installment payment in any month is limited so that the sum of the amount due for a past period and the amount of any benefit due for the preceding month does not exceed two times the beneficiary’s benefit payment for the preceding month. No reductions or deductions are taken into account.
- Exception to installment limitation:
An exception can be granted in the first month in which a beneficiary accrues benefit amounts subject to payment in installments if the beneficiary has unpaid housing expenses, putting them at a high risk of homelessness. The benefit payment may be increased by the amount of the unpaid housing expenses, not exceeding the amount of benefits accrued during the most recent period of nonpayment.
- Payment through a representative payee:
If the beneficiary does not have a representative payee, payment of amounts subject to installments cannot be made until a representative payee is selected.
- Underpaid beneficiary no longer entitled:
For beneficiaries who are no longer currently entitled to monthly payments but still have outstanding amounts, the monthly benefit for the last month of entitlement is treated as the beneficiary’s benefit for the preceding month, and installment payments continue through a representative payee.
- Beneficiary suspended for noncompliance with treatment:
If a beneficiary’s benefits have been suspended for noncompliance with treatment, the payment of amounts under paragraph (a) will stop until the beneficiary demonstrates compliance with treatment. Payments will resume with the first month the beneficiary begins to receive benefit payments.
- Underpaid beneficiary deceased:
Upon the death of a beneficiary, any remaining unpaid amounts will be treated as underpayments in accordance with § 404.503(b).
Example: John’s Case
John is a disabled beneficiary who receives Social Security benefits due to his alcoholism, which is a contributing factor material to the determination of his disability. His benefits are managed by a representative payee, Jane. As a result, certain amounts of John’s benefits will be paid in installments, according to § 404.480.
Scenario:
In February, John’s monthly benefit payment is $1,000. He is also owed $3,000 for past due benefits, which accrued prior to the month payment was effectuated.
- Installment Formula:
The installment payment in any month is limited so that the sum of the amount due for a past period and the amount of any benefit due for the preceding month does not exceed two times the beneficiary’s benefit payment for the preceding month.
In John’s case, the maximum allowable amount for a single installment payment would be $2,000 (two times his $1,000 monthly benefit).
- Installment Payments:
John will receive his regular monthly benefit of $1,000, and Jane, as his representative payee, will also receive installment payments for the past due benefits. For the first installment, Jane receives $1,000, bringing the total payment for that month to $2,000. In the following month, Jane will receive another $1,000 installment payment, along with John’s regular monthly benefit. The past due benefits are now fully paid, and John will continue to receive his regular monthly benefit of $1,000.
- Exception to Installment Limitation:
Suppose John had unpaid housing expenses, putting him at a high risk of homelessness. In this case, the exception to the installment payment limitation could apply. If his unpaid housing expenses were $1,500, his first installment payment could be increased by this amount, not exceeding the accrued benefits. Therefore, John would receive a total of $3,500 in the first month ($1,000 regular benefit + $1,500 housing expenses + $1,000 installment payment), fully paying off his past due benefits and preventing homelessness.
Conclusion: Understanding the regulations surrounding the payment of benefits in installments for disabled beneficiaries with drug addiction or alcoholism is crucial for both the beneficiaries and their representative payees. By ensuring proper adherence to these provisions, beneficiaries can receive the necessary support while working towards overcoming addiction and achieving stability in their lives.
https://www.ssa.gov/OP_Home/cfr20/404/404-0480.htm
At Hugo Fierro & Michael Perez, we are a committed group of professionals who possess an extensive understanding of the intricacies surrounding Social Security disability claims. We take great pride in utilizing our specialized knowledge to provide tailored guidance and assistance to our clients. Our highly skilled team is proficient in navigating the nuanced aspects of each case, delivering invaluable insights and customized support to address your specific needs.