Deposit operations and service are going back and forth on interpreting the ACH Greenbook rules on what to do when receiving a social security direct deposit after receiving a DNE. In ops, we want to return the deposit R15; service wants to let the rep payee handle the item. I thought we were interpreting the Greenbook correctly until I listened to a webinar from The Clearing House on federal govt payments. It seems that letting the rep payee handle returning deposits would be correct, but we have received reclamations though, so it didn't make sense to me. The call said the rep payee would receive any reclamations and be responsible for returning. What are other institutions doing?

Treasury follows the Green Book (they wrote it) and I'd be guided by the Green Book if I were you. Once you have received a DNE, you are required under Treasury regulations (and the Green Book) to return any and all federal recurring benefit payments received via ACH after you've learned of the death. You aren't required to return direct deposits of such funds received before you received that notice (or some other documentation of the death).

It's complicated, but follow the Green Book.