2010-3380. Transfer of Accumulated Benefit Payments

AGENCY:

Social Security Administration (SSA).

ACTION:

Final rule.

SUMMARY:

We are revising our regulations to allow a representative payee who will no longer be serving in that capacity to transfer accumulated benefit payments and interest directly to a beneficiary if we determine that it would be in the best interest of the beneficiary. This change will give us more flexibility in deciding how conserved funds should be handled in these circumstances. The change will also reduce or eliminate delays in the delivery of conserved funds to some beneficiaries.

DATES:

This final rule will be effective March 24, 2010.

FOR FURTHER INFORMATION CONTACT:

Richard Bresnick, Office of Regulations, Social Security Administration, 6401 Security Boulevard, Baltimore, MD 21235-6401, [phone]. For information on eligibility or filing for benefits, call our national toll-free number, 1-800-772-1213 or TTY 1-800-325-0778, or visit our Internet site, Social Security Online, at http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Electronic Version

The electronic file of this document is available on the date of publication in the Federal Register at http://www.gpoaccess.gov/​fr/​index.html.

Background

Our representative payment regulations are in Subpart U of part 404 and subpart F of part 416. In certain cases, we will appoint a representative payee to receive benefit payments on behalf of a beneficiary. Generally, we appoint a representative payee if we have determined that the beneficiary is not able to manage his or her own benefits or direct the management of benefit payments in his or her interest. The payee must use the payments only for the beneficiary's use and benefit. The payee must conserve or invest for the beneficiary any funds remaining after paying for the beneficiary's current needs.

If a payee is no longer going to serve in that capacity, our regulations require the payee to return conserved funds to us or transfer them to a successor payee, as we will specify. The payee is not permitted to transfer these conserved funds to a beneficiary directly. 20 CFR 404.2060 and 416.660. The payee's inability to transfer funds directly to a beneficiary can cause difficulty for both the beneficiary and the representative payee. When we determine that a payee is no longer needed because the beneficiary has become capable of managing his or her own benefits, this two-step process delays our payment of the conserved funds to the beneficiary.

Our current regulatory process is particularly problematic for those beneficiaries who make the transition out of foster care and for their payees. These beneficiaries might need immediate access to the conserved funds to pay for rent or other necessities. Additionally, at least one State requires State agency representative payees for beneficiaries in foster care to turn over all conserved funds directly to the beneficiary when he or she transitions out of foster care.

Explanation of Changes

We are revising §§ 404.2060 and 416.660 of our regulations to permit a payee to transfer conserved funds to a beneficiary if we so specify. The change will give us the discretion to authorize a payee-to-beneficiary transfer of conserved funds and make the representative payment process more efficient. Allowing direct transfer will conserve administrative resources and provide faster access to beneficiaries who have become capable of managing their own benefits.

Public Comments

On October 14, 2009, we published a notice of proposed rulemaking (NPRM) in the Federal Register and provided a 60-day comment period. 74 FR 52706. We received one letter with comments. We carefully considered the comments in publishing this final rule.

Comment: The commenter is an employee of another federal agency who deals with our beneficiaries and payment centers. The commenter supports the changes and believes the changes will benefit us and our beneficiaries. The commenter further notes that “it is essential that funds still be available to the beneficiary especially in economic recession periods.” The commenter asks how the changes will affect current rules on reissuing benefits if the payee misused funds, how the replaced funds will be handled during the transfer, and whether there is an order of importance in selecting the new payee.

Response: We appreciate the commenter's support. The changes will allow a representative payee who will no longer be serving in that capacity to transfer accumulated benefit payments and interest directly to a beneficiary if we direct the representative payee to do so. The changes will not otherwise affect our current rules on reissuing benefits if a payee misused funds, how the replaced benefits will be handled, or how we choose a payee.

Regulatory Procedures

Executive Order 12866

We have consulted with the Office of Management and Budget (OMB) and determined that this final rule does not meet the requirements for a significant regulatory action under Executive Order 12866. Thus, it was not reviewed by OMB.

Regulatory Flexibility Act

We certify that this final rule will not have a significant economic impact on a substantial number of small entities because it affects primarily individuals. Therefore, a regulatory flexibility analysis is not required under the Regulatory Flexibility Act, as amended.

Paperwork Reduction Act

This rule does not create any new, or affect any existing, collections, and therefore, does not require OMB approval under the Paperwork Reduction Act.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social Security—Disability Insurance; 96.002, Social Security—Retirement Insurance; 96.004, Social Security—Survivors Insurance; and 96.006, Supplemental Security Income)

List of Subjects

20 CFR Part 404

• Administrative practice and procedure; Blind; Disability benefits; Old-Age
• Survivors, and Disability Insurance; Reporting and recordkeeping requirements; Social Security

20 CFR Part 416

• Administrative practice and procedure; Aged
• Blind
• Disability benefits
• Public Assistance programs; Reporting and recordkeeping requirements; Supplemental Security Income (SSI)

Dated: February 4, 2010.

Michael J. Astrue,

Commissioner of Social Security.

For the reasons set out in the preamble, we amend subpart U of part 404 and subpart F of part 416 of chapter III of title 20 Code of Federal Regulations as set forth below:

PART 404—FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950-  )

Subpart U—[Amended]

1. The authority citation for subpart U of part 404 is revised to read as follows:

Authority: Secs. 205(a), (j), and (k), and 702(a)(5) of the Social Security Act (42 U.S.C. 405(a), (j), and (k), and 902(a)(5)).

2. Amend § 404.2060 by revising the first sentence to read as follows:

§ 404.2060

Transfer of accumulated benefit payments.

A representative payee who has conserved or invested benefit payments shall transfer these funds and the interest earned from the invested funds to either a successor payee, to the beneficiary, or to us, as we will specify. * * *

PART 416—SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND DISABLED

Subpart F—[Amended]

3. The authority citation for subpart F of part 416 is revised to read as follows:

Authority: Secs. 702(a)(5), 1631(a)(2) and (d)(1) of the Social Security Act (42 U.S.C. 902(a)(5) and 1383(a)(2) and (d)(1)).

4. Amend § 416.660 by revising the first sentence to read as follows:

§ 416.660

Transfer of accumulated benefit payments.

A representative payee who has conserved or invested benefit payments shall transfer these funds and the interest earned from the invested funds to either a successor payee, to the beneficiary, or to us, as we will specify. * * *