federal register - U.S. Government Printing Office

Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations6119To do all it can to minimize potentialproblems like those cited in thiscomment, SSA plans to provide all newbeneficiaries with a written noticeinforming the individual of his or herassigned payment date. Included withthe written notice will be a pamphletexplaining payment cycling and acalendar providing the individual withthe scheduled payment dates.Comment: Several commenters urgedSSA to consider requiring all benefits tobe paid by direct deposit.Response: Since these comments weremade, Public Law 104–134, theOmnibus Consolidated Rescissions andAppropriations Act of 1996, has beensigned. This law requires, with limitedexceptions, anyone who files forgovernment benefits after July 25, 1996,to be paid by direct deposit. In addition,with certain limited exceptions, thelegislation requires that by 1999, allgovernment benefits be paid by directdeposit, even for those who beganreceiving payments before July 26, 1996.However, without payment cycling,SSA and the financial community willstill experience workload surges the first10 days of the month in terms of directdeposits all occurring at the same time,calls to SSA and to the financialinstitutions concerning crediting of thedirect deposit, the amount of thedeposit, or many other issues related tothe benefit, as well as bank customerswanting to make withdrawals as soon asthe direct deposit is made.Comment: Several commentersthought SSA should schedule thedelivery of cycled benefits on assignedpayment dates rather than the plannedWednesday schedule. They believedthis would be less confusing forcustomers than having to rememberwhich Wednesday is their payment day.However, another commenter, a nonprofitelectronic banking tradeassociation, said its members supportedpaying on Wednesdays. The commentersaid many beneficiaries currentlybecome confused about when they willreceive their payments if the 3rd is ona holiday or weekend. The commenterbelieved Wednesday payments willclear up this confusion.Response: SSA gave the paymentschedule under cycling a great deal ofconsideration. We decided on theWednesday schedule for the followingreasons:• If the objective of payment cyclingis to improve service by providing thepublic with better access to SSAthrough a leveling of workloads, thenWednesday payments offer the bestopportunity to achieve this. Any fixeddate schedule (e.g., the 10th, 17th and24th of the month) will fall on a Friday,Saturday, Sunday or Monday 57 percentof the time. This is likely to exacerbatethe workload peaks now experienced bySSA every Monday;• A Wednesday schedule avoids theproblem of having to adjust paymentdates because the date coincides with aSaturday or Sunday; and• A Wednesday schedule avoids theproblem of having to adjust paymentdates because the date coincides with aFederal holiday to the maximum extentpossible.Again, SSA plans to provide paymentschedules to both the financialcommunity and the public to minimizequestions or confusion regarding thedate on which beneficiaries will bepaid.Comment: One commenter said thatSSA should clarify how these paymentsshould be counted for means-testedprograms, such as AFDC, food stampsand AFDC-related Medicaid.Response: We do not issue rulesgoverning these other programs andhave no authority to decide how ourpayments should be counted for thoseprograms. It is not clear, however, thatany changes are necessary. Certainly,SSA will provide any additionalguidance to State and local governmentsthat may be needed about ourprocedures. As it has done for the past56 years, Social Security will continueto pay future OASDI beneficiaries in themonth following the month ofentitlement.Comment: Two commenters wantedan appeals process available for thosebeneficiaries for whom receiving theirbenefit payment later in the monthcreates a hardship.Response: The payment date hasnever been appealable and SSA does notplan to make it appealable or establisha new appeals process. This decision isbased on a number of considerations.First, all individuals of limited means(i.e., those identified at or below thepoverty level through their entitlementto SSI) will not be affected by paymentcycling. Accordingly, they will receiveboth their SSI and Social Securitybenefits at the beginning of the month.It is true that people who otherwisewould have been paid on the 3rd of themonth will now be paid later in themonth as a result of payment cycling.However, we believe the improvedaccess to SSA’s services for allbeneficiaries and customers, as well asthe benefits to the banking and businesscommunity which will enable them toprovide better customer service, and thereduction of the risk involved inprocessing large once-a-month filesoutweigh the effects of being paid laterin the month. Moreover, SSA’s decisionreflects the advice given by members ofthe public who participated in theAgency’s focus groups. Theseindividuals expressed a strong beliefthat someone who has not yet begun toreceive Social Security benefits is notdisadvantaged if they receive theirpayment on any of the assignedWednesdays from the outset of theirentitlement.Establishing an appeals processwould place an undue administrativeburden on SSA and could defeat thepurpose of payment cycling.Comment: One commenter indicateddisapproval of payment cycling but gaveno reasons. Therefore, we cannotrespond.Comment: One commenter said thatin some States, individuals can beeligible for State payment of theirMedicare premium under the QMB andSpecified Low Income MedicareBeneficiary programs but not eligible forMedicaid. Therefore, the commentersaid the regulations should be clarifiedto make certain that all individualswhose Medicare premium is paid by theState are excluded from paymentcycling.Response: We are adopting thiscomment and revising § 404.1807(c)(4)to clarify that all OASDI beneficiarieswhose Medicare premiums are paid bythe State in which they live areexcluded from payment cycling.Comment: One commenter urged SSAto include current beneficiaries inpayment cycling by splitting currentrecipients into two groups that would beprocessed as two primary cycles and toadd new beneficiaries to two secondarycycles on alternate weeks.Response: Prior to publishing theNPRM, SSA considered includingcurrent beneficiaries in paymentcycling. We rejected this option becauseshifting the payment date of one half ofcurrent beneficiaries one week laterwould disrupt monthly paymentarrangements for 22 million currentOASDI recipients. Further, without aone-time ‘‘bridge payment’’ (a one-timeadditional payment which would coverthe period of time from the 3rd of themonth to their first payment day) of upto $3.3 billion, affected beneficiarieswould be required to wait more than 5weeks between benefit payments duringthe month of transition. Withoutlegislation, SSA does not have authorityto issue this type of special adjustmentpayment. Current beneficiaries whoparticipated in focus groups wereunanimous in their opinion that SSAshould not change the monthly paymentpatterns of beneficiaries currently on therolls. Finally, the majority of