Underpayments Payable to Terminated Title II Beneficiaries
According to SSA policy, an underpayment is any monthly benefit amount due a beneficiary that SSA has not paid. Underpayments include accrued monthly benefits SSA has not paid and uncashed checks representing correct payments to deceased beneficiaries.
Based on the address in its records, SSA should issue underpayments to living terminated beneficiaries or their representative payees. When underpaid beneficiaries are deceased, SSA should pay the underpayment to a surviving spouse, child, parent, or the legal representative of the decedent’s estate. SSA’s automated system identifies underpayments for terminated beneficiaries, records them as a special payment amount (SPA) underpayment on the Master Beneficiary Record (MBR), and produces an alert for SSA employees to determine whether they should pay the underpayment. SSA does not produce an alert when employees manually establish an underpayment.
For our current review, we identified 94,788 terminated beneficiaries who, according to the MBR, had underpayments totaling $173.5 million.