## Chapter 2: Social Security (SS) Verification Match 

#### Table of Contents

> 1\. General Information on the SS Verification Match 2-1
>
> 2\. Calculation of Department of Veterans Affairs (VA)Computed SS
> Rate 2-2
>
> 3\. Processing Verified SS Amounts 2-6
>
> 4\. Processing Verified SS Amounts: Old Law and Section 306 Cases 2-7
>
> 5\. Processing Verified SS Amounts: Improved Pension and Parents'\
> Dependency and Indemnity Compensation (DIC) Cases 2-8
>
> 6\. Action on Terminated Social Security Administration (SSA) Accounts
> 2-12
>
> 7\. End Product (EP) Credit, Reporting, and Cost Avoidance 2-14

## Chapter 2. Social Security (SS) Verification Match

#### 1. General Information on the SS Verification Match

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains general information on the SS     |
| troduction | > verification match, including the                     |
|            |                                                         |
|            | 1.  information sent to VA by the SSA, and              |
|            |                                                         |
|            |     SS match record update.                             |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > July 23, 2004                                         |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > Once a year, the Social Security Administration (SSA) |
| ### a. Inf | > sends information on SSA rates for recipients of      |
| ormation S |                                                         |
| ent to VA  | 3.  pension, and                                        |
| by the SSA |                                                         |
|            |     parents' Dependency and Indemnity Compensation      |
|            |     (DIC).                                              |
|            |                                                         |
|            | > ***Note***: In an effort to verify reported income by |
|            | > the above beneficiary, this processing is done at     |
|            | > cost-of-living adjustment (COLA) time.                |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #          | > The table below describes how the Department of       |
| #### b. SS | > Veterans Affairs (VA) master records are updated      |
|  Match Rec | > using the Social Security (SS) payment data.          |
| ord Update |                                                         |
+------------+---------------------------------------------------------+

  -------- --------------------------------------------------------------
  Stage    Description

  1        VA sends the SSA an extract of its pension and parents' DIC
           files.

  2        The SSA runs this extract against the master beneficiary
           record (MBR) file and inserts SS payment data.

  3        The extract tape is then returned and VA master records are
           updated.
  -------- --------------------------------------------------------------

#### 2. Calculation of Department of Veterans Affairs (VA)-Computed SS Rate

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on the calculation of |
| troduction | > VA-computed SS rate, including                        |
|            |                                                         |
|            | 5.  the estimated post-cost-of-living adjustment (COLA) |
|            |     rate                                                |
|            |                                                         |
|            |     the no supplementary medical insurance benefit      |
|            |     (SMIB) deduction                                    |
|            |                                                         |
|            |     the new monthly SS                                  |
|            |                                                         |
|            |     the post-COLA SS Estimated Income for VA Purposes   |
|            |     (IVAP)                                              |
|            |                                                         |
|            |     the standard SMIB (Medicare) deduction              |
|            |                                                         |
|            |     the SMIB deduction savings provision                |
|            |                                                         |
|            |     nonstandard SMIB deductions, and                    |
|            |                                                         |
|            |     an example of determining SMIB deduction.           |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > July 23, 2004                                         |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ###        | > VA pension and parents' DIC benefits are increased by |
| ## a. Esti | > the same percentage and at the same time as the SS    |
| mated Post | > COLA. Therefore, VA estimates a joint VA/SS post-COLA |
| -COLA Rate | > SS rate for each beneficiary.                         |
|            | >                                                       |
|            | > ***Estimated Income for VA Purposes (IVAP*)**         |
|            | >                                                       |
|            | > The estimated SS rate is used to determine the VA     |
|            | > beneficiary's IVAP until VA processes the extract     |
|            | > tape with the actual post-COLA SSA rate.              |
|            | >                                                       |
|            | > ***Rates Differ by \$10 or More***                    |
|            | >                                                       |
|            | > When exact rates are processed, VA compares them to   |
|            | > the estimated rates. If the monthly rates differ by   |
|            | > \$10 or more, the regional office (RO) of             |
|            | > jurisdiction must resolve the discrepancy.            |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > If there is no Medicare or supplementary medical      |
| b. No SMIB | > insurance benefit (SMIB) deduction in the master      |
|  Deduction | > record, multiply the verified SS monthly amount in    |
|            | > the master record or the monthly SS amount, in        |
|            | > unverified cases, by the COLA factor.                 |
|            | >                                                       |
|            | > ***Example***: If the COLA is 4%, multiply the        |
|            | > monthly SS amount by 1.04.                            |
+------------+---------------------------------------------------------+

Continued on next page

2\. Calculation of Department of Veterans Affairs (VA)-Computed SS Rate,
Continued

+------------+---------------------------------------------------------+
| ###        | Use the table below to understand how VA calculates the |
| ## c. New  | new monthly SS payment for verified and unverified      |
| Monthly SS | cases if there is no SMIB deduction.                    |
+------------+---------------------------------------------------------+

  ----------------------------- -----------------------------------------
  If the monthly amount in      Then VA rounds the monthly amount in the
  master record is ...          master record to next lower ...

  verified                      dollar and the resulting amount is
                                considered the new monthly SS payment.

  unverified                    dime and the resulting amount is
                                considered to be the new monthly SS
                                payment.
  ----------------------------- -----------------------------------------

+------------+---------------------------------------------------------+
| #####      | > Use the table below to understand how VA calculates   |
| d. Post-CO | > the post-COLA SS IVAP for a verified or unverified    |
| LA SS IVAP | > case.                                                 |
+------------+---------------------------------------------------------+

+----------------------+-----------------------------------------------+
| If it is ...         | Then VA would ...                             |
+----------------------+-----------------------------------------------+
| a verified case      | 13. multiply the SS rate by the COLA          |
|                      |     adjustment                                |
|                      |                                               |
|                      |     round down to the next lower dollar, and  |
|                      |                                               |
|                      |     multiply by 12 for IVAP.                  |
+----------------------+-----------------------------------------------+
| 16. an unverified    | 17. multiply the SS rate by the COLA          |
|     case             |     adjustment                                |
|                      |                                               |
|                      |     round down to the nearest dime, and       |
|                      |                                               |
|                      |     multiply by 12 for IVAP.                  |
+----------------------+-----------------------------------------------+

Continued on next page

2\. Calculation of Department of Veterans Affairs (VA)-Computed SS Rate,
Continued

+------------+---------------------------------------------------------+
| ###        | > The standard SMIB deduction amounts will be provided  |
| ## e. Stan | > to ROs annually. The COLA amount will also be         |
| dard SMIB  | > provided at that time.                                |
|            | >                                                       |
| (Medicare) | > If the master record contains a standard SMIB         |
| Deduction  | > deduction the                                         |
|            |                                                         |
|            | 20. monthly SS rate will always be verified, and        |
|            |                                                         |
|            |     new standard SMIB deduction will be used to compute |
|            |     the post-COLA SS monthly amount.                    |
|            |                                                         |
|            |     > Follow the steps in the table below to calculate  |
|            |     > the SS rate with a standard SMIB deduction.       |
+------------+---------------------------------------------------------+

+-------+--------------------------------------------------------------+
| Step  | Action                                                       |
+-------+--------------------------------------------------------------+
| 1     | Multiply the verified rate by the COLA factor and round the  |
|       | product to the next lower dime.                              |
+-------+--------------------------------------------------------------+
| 2     | Subtract from this amount the new post-COLA SS standard SMIB |
|       | deduction and round the result to the next lower dollar.     |
+-------+--------------------------------------------------------------+
| 3     | Add back the SMIB deduction.                                 |
|       |                                                              |
|       | ***Result***: The amount is considered the new monthly SS    |
|       | payment to determine IVAP.                                   |
+-------+--------------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > If the pre-COLA SMIB is other than the current        |
| f. Nonstan | > standard amount, the post-COLA SS monthly amount is   |
| dard SMIB  | > estimated using the pre-COLA SMIB.                    |
| Deductions | >                                                       |
|            | > The assumption is made that there would be no change  |
|            | > in the SMIB deduction because there is no way to      |
|            | > estimate the post-COLA nonstandard SMIB deduction.    |
+------------+---------------------------------------------------------+

Continued on next page

2\. Calculation of Department of Veterans Affairs (VA)-Computed SS Rate,
Continued

+------------+---------------------------------------------------------+
| #          | > The standard SMIB deduction increase can be more than |
| #### g. SM | > the COLA. As a result, SS recipients at the lower end |
| IB Deducti | > of the benefit scale would see their benefits         |
| on Savings | > increase less than the amount of the increase in the  |
|  Provision | > SMIB deduction and would end up with a net reduction  |
|            | > in benefits. The law includes a provision that SS     |
|            | > recipients will not be reduced solely because of the  |
|            | > COLA.                                                 |
|            | >                                                       |
|            | > Therefore, in cases where the newly increased SMIB    |
|            | > deduction would be greater than the COLA increase,    |
|            | > the Medicare deduction is automatically reduced to    |
|            | > the extent necessary to prevent a reduction in the    |
|            | > beneficiary's monthly rate of SS.                     |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ####       | > ***Situation***:                                      |
| # h. Examp |                                                         |
| le: Determ | 22. A veteran's gross pre-COLA SS rate is \$326.00 and  |
| ining SMIB |     includes a \$54.00 SMIB deduction.                  |
|  Deduction |                                                         |
|            |     The veteran's monthly payment amount is \$272       |
|            |     (\$326.00 -- 54.00).                                |
|            |                                                         |
|            |     After the COLA adjustment, the gross rate increases |
|            |     to \$330.50.                                        |
|            |                                                         |
|            |     When the new SMIB deduction of \$58.70 is           |
|            |     subtracted from the gross rate, the veteran's check |
|            |     amount decreases to \$271.80.                       |
|            |                                                         |
|            |     > ***Result***: Since the payment amount cannot be  |
|            |     > reduced, the SMIB deduction must be reduced to    |
|            |     > \$58.50 to continue paying \$272 (\$330.50 -      |
|            |     > \$58.50 = \$272.00).                              |
+------------+---------------------------------------------------------+

#### 3. Processing Verified SS Amounts

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on processing         |
| troduction | > verified SS amounts, including                        |
|            |                                                         |
|            | 26. SSA action                                          |
|            |                                                         |
|            |     verification attempts                               |
|            |                                                         |
|            |     death pension and parents' DIC cases, and           |
|            |                                                         |
|            |     the corrective award action necessary.              |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > July 23, 2004                                         |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a.   | > After matching VA extracts against their files, the   |
| SSA Action | > SSA returns the files with current SS payment         |
|            | > information to VA.                                    |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### b. V | > For each disability pension record, verification is   |
| erificatio | > attempted for                                         |
| n Attempts |                                                         |
|            | 30. the veteran's SS entitlement under his/her Social   |
|            |     Security number (SSN), and                          |
|            |                                                         |
|            |     a spouse's entitlement under the veteran's SSN and  |
|            |     under the spouse's SSN.                             |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > For death pension and parents' DIC cases,             |
|  c. Death  | > verification is attempted under the veteran's SSN and |
| Pension an | > the payee's SSN.                                      |
| d Parents' | >                                                       |
|  DIC Cases | > ***Child Payees***                                    |
|            | >                                                       |
|            | > Records for child payees receiving Improved Pension   |
|            | > are included in the procedure, but no attempt is made |
|            | > to verify the entitlement of a dependent child on a   |
|            | > veteran's or surviving spouse's record.               |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > Depending on the discrepancies found between the SSA  |
| ### d. Cor | > information and VA computed post-COLA SS rate and on  |
| rective Aw | > the type of VA benefits payable, BDN either           |
| ard Action |                                                         |
|  Necessary | 32. updates the master record income, or                |
|            |                                                         |
|            |     prepares writeouts (*VA Form 20-8270*, *C&P Master  |
|            |     Record-Audit Writeout*) and sends notices to ROs    |
|            |     that corrective award action is apparently          |
|            |     necessary.                                          |
+------------+---------------------------------------------------------+

#### 4. Processing Verified SS Amounts: Old Law and Section 306 Cases

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on processing         |
| troduction | > verified SS amounts in Old Law and Section 306 cases, |
|            | > including                                             |
|            |                                                         |
|            | 34. Old Law and Section 306 cases, and                  |
|            |                                                         |
|            |     audits.                                             |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > July 23, 2004                                         |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a.   | > In all Old Law and Section 306 cases for which        |
| Old Law an | > verified SS data are available, Benefits Delivery     |
| d Section  | > Network (BDN)                                         |
| 306 Cases  |                                                         |
|            | 36. posts the verified SS amount to the M15 screen      |
|            |                                                         |
|            |     posts the SMIB deduction amount to the M15 screen,  |
|            |     and                                                 |
|            |                                                         |
|            |     computes and posts the new monthly and annual SS    |
|            |     income amounts for veterans, spouses, and surviving |
|            |     spouses.                                            |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > The BDN system does not generate review messages in   |
|  b. Audits | > protected pension cases merely because there are      |
|            | > discrepancies between the SS amounts returned by the  |
|            | > SSA and the existing amounts in the master record     |
|            | > (the amount in the master record is the VA computed   |
|            | > post-COLA SS rate).                                   |
|            | >                                                       |
|            | > Each case is audited after all SS income amounts are  |
|            | > updated.                                              |
|            | >                                                       |
|            | > The audit run compares the new IVAP to the current    |
|            | > income limitations and issues message 810, Possible   |
|            | > OVERPAYMENT, if income appears to exceed the          |
|            | > limitation.                                           |
|            | >                                                       |
|            | > ***Reported Death of Beneficiary or Spouse***         |
|            | >                                                       |
|            | > The only other review messages issued during initial  |
|            | > processing of SSA returns for protected pension cases |
|            | > are related to the reported death of a beneficiary or |
|            | > spouse.                                               |
+------------+---------------------------------------------------------+

#### 5. Processing Verified SS Amounts: Improved Pension and Parents' Dependency and Indemnity Compensation (DIC) Cases

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on processing         |
| troduction | > verified SS amounts for Improved Pension and parents' |
|            | > DIC cases, including                                  |
|            |                                                         |
|            | 39. Improved Pension and parents' DIC                   |
|            |                                                         |
|            |     when post-COLA SS amount equals master record       |
|            |     amount                                              |
|            |                                                         |
|            |     a discrepancy of \$10 or more                       |
|            |                                                         |
|            |     message code 899                                    |
|            |                                                         |
|            |     the legend for payee/spouse discrepancy             |
|            |                                                         |
|            |     the SMIB deduction                                  |
|            |                                                         |
|            |     no Medicare deduction in a verified case            |
|            |                                                         |
|            |     the verified rate                                   |
|            |                                                         |
|            |     the [smib]{.smallcaps} field                        |
|            |                                                         |
|            |     an example of determining verified monthly SS       |
|            |     amount                                              |
|            |                                                         |
|            |     verifying monthly SS amount                         |
|            |                                                         |
|            |     SS income within \$10 of m/r rate field             |
|            |                                                         |
|            |     SS income that exceeds or is less than m/r rate     |
|            |     field by \$10                                       |
|            |                                                         |
|            |     when the monthly entitlement amount is erroneous    |
|            |                                                         |
|            |     developing for the correct entitlement amount, and  |
|            |                                                         |
|            |     when there is no response or inadequate response by |
|            |     the payee.                                          |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > August 10, 2005                                       |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > In each Improved Pension and parents' DIC case for    |
| ### a. Imp | > which verification is possible for a payee and/or     |
| roved Pens | > spouse, the system compares the monthly SS income     |
| ion and Pa | > computed from the returned SSA data with the existing |
| rents' DIC | > monthly SS income of record.                          |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > If the post-COLA SS monthly amount equals the master  |
| b. Post-CO | > record monthly amount, no further action is taken     |
| LA SS Amou | > except to update the verified monthly rate and smib   |
| nt Equals  | > deduction fields, if necessary.                       |
| Master Rec |                                                         |
| ord Amount |                                                         |
+------------+---------------------------------------------------------+

Continued on next page

5\. Processing Verified SS Amounts: Improved Pension and Parents'
Dependency and Indemnity Compensation (DIC) Cases, Continued

+------------+---------------------------------------------------------+
| #####      | > When a discrepancy of \$10 or more is found between   |
| c. Discrep | > the monthly amounts, the BDN                          |
| ancy of \$ |                                                         |
| 10 or More | 55. generates a review message (Message 899) for RO     |
|            |     action, and                                         |
|            |                                                         |
|            |     updates the verified and smib deduction fields.     |
|            |                                                         |
|            |     > ***Note***: The system does not update the        |
|            |     > monthly or annual ss income fields.               |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ####       | > The legend for a payee's discrepancy is SSA REPORTS,  |
| # d. Legen | > or spouse's discrepancy is SSA RPTS SPOUSE, or both,  |
| d for Paye | > if applicable.                                        |
| e/Spouse D | >                                                       |
| iscrepancy | > The amount shown is the monthly SS income computed    |
|            | > from the SSA verified monthly entitlement amount.     |
|            | >                                                       |
|            | > This monthly SS income is                             |
|            |                                                         |
|            | 57. *not* posted to the m/r rate field on the M15       |
|            |     screen, but                                         |
|            |                                                         |
|            |     posted to the ver rate field on the M15 screen.     |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ###        | > When there is a SMIB deduction, the actual amount is  |
| ## e. SMIB | > also shown on the M15 screen in the smib field.       |
|  Deduction |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### f.   | > When there is no Medicare deduction in a verified     |
| No Medicar | > case, the smib field is blank.                        |
| e Deductio | >                                                       |
| n in a Ver | > Therefore, if the M[15]{.smallcaps} screen shows a    |
| ified Case | > positive entry in the ver rate field for SS and a     |
|            | > blank in the smib field, the SMIB deduction amount    |
|            | > for that SSA beneficiary was verified as *none*.      |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > The verified rate is the amount called "MBA" (monthly |
| ### g. Ver | > benefit amount) by the SSA and represents the gross   |
| ified Rate | > entitlement (unrounded) amount.                       |
+------------+---------------------------------------------------------+

Continued on next page

5\. Processing Verified SS Amounts: Improved Pension and Parents'
Dependency and Indemnity Compensation (DIC) Cases, Continued

+------------+---------------------------------------------------------+
| ##### h.   | > The smib field represents the SMIB deduction. The     |
| SMIB field | > verification program also computes a verified         |
|            | > post-COLA monthly SS income amount. This is the       |
|            | > amount shown in the code 899 message legends.         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > ***Situation:***                                      |
| i. Example |                                                         |
| : Determin | 59. Assume a case where the verified rate was \$386.40  |
| ing Verifi |     and the SMIB amount was \$58.70.                    |
| ed Monthly |                                                         |
|  SS Amount |     Subtracting SMIB (\$58.70) from the verified rate   |
|            |     (\$386.40) leaves \$327.70.                         |
|            |                                                         |
|            |     Dropping the cents gives \$327.                     |
|            |                                                         |
|            |     > ***Result***: Adding the SMIB (\$58.70) to \$327  |
|            |     > gives \$385.70 as the verified monthly SS amount. |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > Check SHARE or call SSA to verify the monthly SS      |
| j. Verifyi | > amount. Unless it is known that SMIB is paid by a     |
| ng Monthly | > state or organization, use the amount in the message  |
|  SS Amount | > legend.                                               |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### k.   | > If the verified computed monthly SS income is within  |
|  SS Income | > \$10 of the amount in the m/r rate field              |
|  within \$ |                                                         |
| 10 of Mast | 62. do not adjust the case                              |
| er Record  |                                                         |
| RATE Field |     do not take end product (EP) credit, and            |
|            |                                                         |
|            |     dispose of the writeout under RCS VB-1, Part I,     |
|            |     item no. 8-041.000.                                 |
+------------+---------------------------------------------------------+

Continued on next page

5\. Processing Verified SS Amounts: Improved Pension and Parents'
Dependency and Indemnity Compensation (DIC) Cases, Continued

+------------+---------------------------------------------------------+
| ##### l.   | > If the verified computed monthly SS income exceeds or |
| SS Income  | > is less than the amount in the m/r rate field by \$10 |
| Exceeds or | > or more check the SHARE system or call SSA for the    |
|  Is Less t | > correct rate.                                         |
| han Master |                                                         |
|  Record RA |                                                         |
| TE by \$10 |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ###        | > Initiate development with the payee to determine the  |
| ## m. Deve | > commencing date of the SSA rate change.               |
| loping for |                                                         |
|  Date of R |                                                         |
| ate Change |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### n.   | > Tell the payee he/she has been identified by SSA      |
|  Informing | > through the matching program as receiving SSA         |
|  the Payee | > benefits at a rate which differs from the rate on     |
|            | > which his/her VA benefits are paid.                   |
|            | >                                                       |
|            | > Provide notice of proposed adverse action as outlined |
|            | > in M21-1MR, Part I, 2.B.6, if the verified SS rate    |
|            | > will result in a reduction or termination of benefits |
|            | > . Advise the payee of the monthly SS rate             |
|            |                                                         |
|            | 65. that SSA has reported, and                          |
|            |                                                         |
|            |     on which VA benefits are paid.                      |
|            |                                                         |
|            |     > Ask the payee to                                  |
|            |                                                         |
|            |     explain the discrepancy between the amount verified |
|            |     by SSA and the amount previously reported to VA,    |
|            |     and                                                 |
|            |                                                         |
|            |     submit copies of award letters and adjustment       |
|            |     notices for all periods necessary to resolve the    |
|            |     discrepancy.                                        |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > If development or a review of the folder clearly      |
|  o. Monthl | > establishes that a verified monthly entitlement       |
| y Entitlem | > amount is erroneous, process a correction of master   |
| ent Amount | > record (corr) transaction of six zeros to the         |
|  Erroneous | > appropriate ver rate field.                           |
+------------+---------------------------------------------------------+

Continued on next page

5\. Processing Verified SS Amounts: Improved Pension and Parents'
Dependency and Indemnity Compensation (DIC) Cases, Continued

+------------+---------------------------------------------------------+
| ##         | > If the payee fails to respond or the response is      |
| ### p. No  | > inadequate, adjust the award under 38 CFR 3.652.      |
| Response o |                                                         |
| r Inadequa |                                                         |
| te Respons |                                                         |
| e by Payee |                                                         |
+------------+---------------------------------------------------------+

+-----------------------------------------------------------------------+
| > ***Note***: For purposes of 38 CFR 3.652(a)(1), the "month in which |
| > the eligibility factor was last shown by the evidence of record to  |
| > have existed" is the last month in which it can be definitely be    |
| > shown by the evidence that the payee's income did not exceed the    |
| > income limitation for payment of pension benefits.                  |
+-----------------------------------------------------------------------+

#### 6. Action on Terminated Social Security Administration (SSA) Accounts

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on terminated SSA     |
| troduction | > accounts, including                                   |
|            |                                                         |
|            | 69. when the beneficiary or spouse is deceased, and     |
|            |                                                         |
|            |     the code 899 messages                               |
|            |                                                         |
|            |     SSA RPTS PAYEE DECEASED, and                        |
|            |                                                         |
|            |     SSA RPTS SPOUSE DECEASED.                           |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > July 23, 2004                                         |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### a.   | > Code 899 messages are also issued for cases in which  |
| Beneficiar | > the SSA records indicate that a VA beneficiary or the |
| y or Spous | > spouse of a VA beneficiary is deceased.               |
| e Deceased | >                                                       |
|            | > The following are the two code 899 messages that are  |
|            | > issued for these cases:                               |
|            |                                                         |
|            | 73. SSA RPTS PAYEE DECEASED, and                        |
|            |                                                         |
|            |     SSA RPTS SPOUSE DECEASED.                           |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > The message SSA RPTS PAYEE DECEASED is issued for a   |
| ### b. SSA | > record that is in active payment status at the time   |
|  Rpts Paye | > of the verification run. This message is keyed to     |
| e Deceased | > certain coded fields in the SSA record. It is         |
|            | > possible that the codes are neither accurate nor      |
|            | > current.                                              |
|            | >                                                       |
|            | > ***Notes***:                                          |
|            |                                                         |
|            | 75. If there is no evidence on file to support the      |
|            |     validity of the message, do not suspend the account |
|            |     while undertaking initial development. Rather,      |
|            |     maintain control of the case while taking           |
|            |     development action to determine the fact and date   |
|            |     of death, and                                       |
|            |                                                         |
|            |     suspend payments, pending ultimate adjustment, only |
|            |     if the evidence indicates a reasonable probability  |
|            |     that the payee is deceased.                         |
+------------+---------------------------------------------------------+

Continued on next page

6\. Action on Terminated Social Security Administration (SSA) Accounts,
Continued

+------------+---------------------------------------------------------+
| ###        | > The message SSA RPTS SPOUSE DECEASED is issued for an |
| ## c. SSA  | > appropriate record if there is a spouse indicated in  |
| Rpts Spous | > the master record and there is no future award line   |
| e Deceased | > on or before January, showing total dependency        |
|            | > reduced to indicate loss of the spouse.               |
|            | >                                                       |
|            | > ***Note***: Control such cases and take appropriate   |
|            | > development action to determine current dependency    |
|            | > status and the date of loss of the spouse. The        |
|            | > effective date of award adjustment will be dictated   |
|            | > by the end-of-month rule or end-of-year rule,         |
|            | > depending on the type of VA benefits payable and the  |
|            | > actual date of the spouse's death.                    |
+------------+---------------------------------------------------------+

#### 7. End Product (EP) Credit, Reporting, and Cost Avoidance

+------------+---------------------------------------------------------+
| ##### In   | > This topic contains information on EP credit,         |
| troduction | > reporting, and cost avoidance, including              |
|            |                                                         |
|            | 77. EP assignment                                       |
|            |                                                         |
|            |     no EP credit                                        |
|            |                                                         |
|            |     report format                                       |
|            |                                                         |
|            |     determining fiscal year cost avoidance, and         |
|            |                                                         |
|            |     an example of determining cost avoidance.           |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### C    | > April 5, 2005                                         |
| hange Date |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > ***EP 150***                                          |
| ### a. EP  | >                                                       |
| Assignment | > Cases which require development and/or award action   |
|            | > because of an income adjustment are assigned EP 150.  |
|            | >                                                       |
|            | > ***EP 130***                                          |
|            | >                                                       |
|            | > Cases which require development and/or award action   |
|            | > because of a change in dependency are assigned EP     |
|            | > 130.                                                  |
|            | >                                                       |
|            | > ***Note:*** No separate end product credit is         |
|            | > assigned to develop for or terminate an account based |
|            | > on the fact of a veteran's death, as appropriate      |
|            | > credit is included in any subsequent death action.    |
|            | >                                                       |
|            | > ***References***: For more information on             |
|            |                                                         |
|            | 82. EP credit, see [M21-4, Appendix C.]{.underline}     |
|            |                                                         |
|            |     EP credit associated with adverse actions, see      |
|            |     M21-1MR, Part I, 2.B.7.                             |
+------------+---------------------------------------------------------+

Continued on next page

7\. End Product (EP) Credit, Reporting, and Cost Avoidance, Continued

+------------+---------------------------------------------------------+
| ##         | > *RCS 20-0846* reports are required in the following   |
| ### b. Rep | > format:                                               |
| ort Format |                                                         |
|            | 84. number of overpayments created                      |
|            |                                                         |
|            |     amount of overpayments                              |
|            |                                                         |
|            |     number of cases referred under M21-1MR, Part III,   |
|            |     Subpart vi, 5.A (TBD) or M21-1, Part IV, Chapter    |
|            |     36, and                                             |
|            |                                                         |
|            |     fiscal year cost avoidance in cases that are        |
|            |     terminated or reduced as a result of this matching  |
|            |     program.                                            |
|            |                                                         |
|            |     > ***Important***: Negative reports *are* required. |
|            |                                                         |
|            |     > ***Note***: ROs will be informed annually of the  |
|            |     > date this report is due and where to send the     |
|            |     > report.                                           |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### c    | > Fiscal year cost avoidance is calculated as follows:  |
| . Determin |                                                         |
| ing Fiscal | 88. multiply the pre-adjustment rate by the number of   |
|  Year Cost |     months remaining in the fiscal year from the first  |
|  Avoidance |     of the month of adjustment                          |
|            |                                                         |
|            |     multiply the new monthly rate by the same number of |
|            |     months, and                                         |
|            |                                                         |
|            |     subtract the revised rate from the initial rate.    |
|            |                                                         |
|            | > The result is the fiscal year cost avoidance.         |
+------------+---------------------------------------------------------+

Continued on next page

7\. End Product (EP) Credit, Reporting, and Cost Avoidance, Continued

+------------+---------------------------------------------------------+
| ####       | > ***Situation***: The SS Verification match indicates  |
| # d. Examp | > that a single veteran's monthly SS rate is \$447.50   |
| le: Determ | > effective December 1, 1999. The veteran is currently  |
| ining Cost | > being charged with SS of \$420.50 per month effective |
|  Avoidance | > December 1, 1999.                                     |
|            | >                                                       |
|            | > After affording a notice of proposed adverse action,  |
|            | > the RO determines that the award must be adjusted to  |
|            | > charge SS of \$477.50 per month from July 1, 1999.    |
|            | > The award making the adjustment is authorized on      |
|            | > August 7, 2000. The difference between the monthly    |
|            | > rate that would have been paid based on SS of         |
|            | > \$420.50 and the rate actually paid after the         |
|            | > adjustment based on SS of \$447.50 per month, is      |
|            | > \$27.00 per month.                                    |
|            | >                                                       |
|            | > ***Action***: The lower rate will be paid for two     |
|            | > months that remain in fiscal year 2000 (August and    |
|            | > September). Therefore, fiscal year cost avoidance for |
|            | > this case for purposes of the *RCS-20-0846* report is |
|            | > \$54 (\$27.00 x 2).                                   |
+------------+---------------------------------------------------------+