Ok, so we had a customer decease - he receiveds social security benefits. Today we received the death notice - now what? Looking at my ACH Rules manual, it says we may return ACH entries when we become aware of the death of the account holder. However, my concern is - what does SSA do? Will they come back and debit the account for the benefits, even if I've returned the funds? Am I better off accepting the credit and placing a hold on it?

The information I'm looking at comes off of page OG 97 - but maybe there's something else regarding government benefits in another section?


Ok, I'm also reading OG 71 and 72, but still not sure what SSA actually does - are their systems competent enough to catch the return, or will they still come back and try to debit.

I usually look at the DNE (Death Notice) with a member of OPS to make sure that the ACH received from SSA was for a period for which the customer should not have received payment (e.g., the customer died near month-end, but we got a payment on the 1st/3rd of the next month for that previous month). If it appears that the payment needs to be returned, I have the clerk send the funds back (ACH return, I think it's coded a 15). I've not had any issue with the SSA coming back and asking for the money if we send it back in a timely fashion. If they do the money, they'll send a Reclamation Notice and you can indicate on it if you've already returned the funds (or if you're going to return them). Hope this helps.

Send the funds back if your receive them after learning of the customer's death. Treasury will ensure that SSA gets the word that the money has been returned. Be sure to use the R15 return code and supply the YYMMDD of the date of death.

If there are SSA payments in the account received after the date of death and before the bank's knowledge, you should put an open-ended hold on the funds to prevent their being withdrawn by an executor or next-of-kin. If less than 60 days have passed since those payments were received, you should be able to return them, individually, using the R15 code. Don't return partial payments via the ACH, though.

Keep proof of your returns to document your response to a reclamation claim.

So if customer deceased on Feb 1, and benefits are being received today, those benefits should be returned, and if not will be reclaimed? Where does one find that information?

PS - thanks for the responses.

Most of what I know was picked up on-the-job talking to the ACH folks. However, there is a section on reclamations in the 'green book' at:

http://www.fms.treas.gov/greenbook

Most SSA/SSI benefits are sent on the 1st/3rd of the month and the problems usually arise if the customer died during the last week or two of the previous month. Since they weren't alive for the entire month, they are not eligible for the payment and it needs to be returned (clerk posts an "R15" ach return).

Greenbook - good gracious - I have a red ACH Manual and a blue NACHA rules book - now there's a green book?
Ahhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh

And also a Beige Book if I remember correctly.

What ever happened to my Little Black Book?

Someone should draw up some whitepages on these books

If we are notified by VA to send back the benefits because the customer is deceased, and we notice that there is also SSA funds in the account that should go back but have not received a notification to do so we should return or put a hold?

If you can determine that a.) the funds were for the deceased [usually your ACH clerk can confirm the social security number and relationship to the deceased] and b.) that they included a time period in which the customer was deceased [e.g., customer died on 1/15 and you got benefits on 2/1], then I would return them (usually an ACH 15 transaction) even without a notification. This saves you from having to somehow hold/freeze them until you get a notice and/or prevents others from trying to obtain them.