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6116 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and RegulationsBecause of the inordinately largenumber of payments involved, theseinstitutions must ensure that nothinggoes wrong as the file passes throughthe national payment system and isdeposited into individual customers’accounts. Any event that adverselyaffects the operational capacity of DT,FRS or a large financial institution inthe 1 to 4 day window prior to the 3rdof the month may result in the delay ornonreceipt of literally millions of SocialSecurity benefit payments which couldcreate hardship for SSA beneficiaries.Leveling the Social Security paymentfiles through cycling will help preventthis operational risk and resultinghardship.In order to improve our service to thepublic, both now and in the future, wewill spread the payment of OASDIbenefits throughout the month, ratherthan continue to make all benefitpayments on single days at thebeginning of the month. That is, we willestablish several additional paymentdays for each month, and pay the fullmonthly benefit to some beneficiarieson the first of those payment days, toother beneficiaries on the second ofthose payment days, and so forth. Thepayment day, or cycle, on which abeneficiary is paid generally will not bechanged, so that if you are paid on thesecond payment day in one month youwill be paid on the second payment dayin each succeeding month as well. Thisapproach, which we call ‘‘cycling ofpayments,’’ will level the workloadpeaks associated with our currentpractice of paying all benefits on thesame day. Since calls and visitsassociated with receipt of the monthlybenefit payment will be distributedthroughout the month, rather thanconcentrated in a few days, there will beshorter waiting times for assistance andwe will be able to achieve or sustain ourworld class service to the public.It is important to note that paymentcycling will not change the way benefitsare computed. We will continue tofollow the same rules in determiningmonth of entitlement and the paymentamount. People whose benefits arecycled will receive the same amountthey would receive if they were paid onthe 3rd of the month.The benefits to society ofimplementing payment cycling arepotentially significant but extremelydifficult to estimate. Cycling will benefitmembers of the public in that they willhave better access to SSA services,including shorter waiting times in fieldoffices and when calling the 800number, as SSA’s workloads increase inthe future. Cycling will benefit thebusiness and banking communities inthat they will be better able to utilizetheir resources throughout the month,processing Social Security payments ona weekly basis. Cycling will also reducethe risk involved in processing largeonce-a-month files. If we continue topay all beneficiaries on single daysonce-a-month, SSA’s service to thepublic will deteriorate, and the adverseimpact that the once-a-month paymentshave on the business and financialcommunity will continue, as will thegrowing operational risk that goes alongwith processing all benefit payments atone time.After considering how best toimplement the reinvention proposal tocycle the timing of benefit payments, wehave decided the following:1. We will establish three additionalpayment days throughout the month(i.e., the second, third and fourthWednesdays of the month) on whichindividuals may be paid. This schedulewill alleviate to the maximum extentpossible the current Monday workloadpeak which is also now beingexperienced by SSA’s toll-free 800number and field offices when thepayment day falls on Friday, Saturday,Sunday or Monday, which occurs morethan half of the time.2. We will implement paymentcycling prospectively only for newOASDI beneficiaries whose claims arefiled on or after May 1, 1997. Paymentsto current beneficiaries will not becycled, as they are already in theestablished pattern of receiving theirbenefits on the third of the month.In the notice of proposed rulemaking(NPRM) we indicated that we proposedto implement payment cycling byJanuary 1997. However, we are delayingimplementation because we anticipateheavy workloads between December1996 and March 1997 due to recentlyenacted legislation, and we believe itwould be unwise to begin paymentcycling during that time. The May 1,1997 implementation date was alsoselected to allow SSA, DT and FRS, whoshare responsibility for delivery ofSSA’s payments, sufficient time tocomplete the essential modificationsrequired before cycling can begin.Moreover, publishing the finalregulation several months in advance ofthe implementation date allows thebusiness and financial community leadtime to prepare for cycling.3. We will assign one of the newlyestablished payment days to each newOASDI beneficiary based on the date ofbirth of the person on whose recordentitlement is established (the insuredindividual). Generally, new OASDIbeneficiaries who receive auxiliary orsurvivors benefits on an insuredindividual’s record will be assigned tothe payment day based on the insuredindividual’s date of birth. Insuredindividuals born on the 1st through the10th of the month will be paid on thesecond Wednesday of each month.Insured individuals born on the 11ththrough the 20th of the month will bepaid on the third Wednesday of eachmonth. Insured individuals born afterthe 20th of the month will be paid onthe fourth Wednesday of each month.With the few exceptions describedbelow, no new OASDI beneficiaries willreceive payments on the 3rd of themonth.Individuals who are being paidbenefits on one record on the 3rd of themonth, and who become entitled onanother record after April 30, 1997without a break in entitlement, willcontinue to receive all benefits on the3rd of the month.After April 30, 1997, individuals whobecome entitled on one record and laterentitled on another record, without abreak in entitlement, will be paid allbenefits to which they are entitled nolater than their current payment day.They will not be assigned a laterpayment day as long as they remaincontinuously entitled. We believe thischange from our proposed rule isdesirable to ensure that thoseindividuals who have becomeaccustomed to receiving their paymentson a certain day are not required to waitan additional 1 to 2 weeks for paymentwhen the second entitlement begins. Wehave had to establish an interim processto implement this change until suchtime as systems enhancements can fullysupport a permanent process. Under theinterim process, these individuals willbe assigned a payment day based on thenew entitlement situation or, if that islater than the current payment day, theywill be paid on the 3rd of the month.Under the permanent process,individuals will be assigned whicheverpayment day is earlier: the currentpayment day or the payment day whichwould be assigned based on the newentitlement situation.4. We may accommodate somebeneficiaries currently being paid on the3rd of the month who voluntarily wishto change to the payment day thatwould be selected by the date of birthcriteria described above, in order toaccelerate the workload leveling effectof cycling. For example, we plan toallow them to volunteer to switch ifonly one person is being paid on therecord or, if there are other beneficiariesbeing paid on the same record, all othersagree, in writing, to the change.However, once a volunteer is assignedto a new payment day, that day will be