A-88056, AUGUST 9, 1937, 17 COMP. GEN. 125

A-88056: Aug 9, 1937

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IS AS FOLLOWS: SECTION 205 OF THE SOCIAL SECURITY ACT PROVIDES AS FOLLOWS: "IF ANY AMOUNT PAYABLE TO AN ESTATE UNDER SECTION 203 OR 204 IS $500 OR LESS. BE PAID TO THE PERSONS FOUND BY THE BOARD TO BE ENTITLED THERETO UNDER THE LAW OF THE STATE IN WHICH THE DECEASED WAS DOMICILED. IF THE AMOUNT PAYABLE TO AN ESTATE UNDER SECTION 203 OR 204 IS $500 OR LESS. THE SOCIAL SECURITY BOARD MAY PAY IT DIRECTLY TO THE PERSONS IT DETERMINES TO BE ENTITLED THERETO UNDER THE LAW OF THE STATE IN WHICH THE DECEASED WAS DOMICILED.'. WHERE THERE ARE SUCH APPLICABLE PROVISIONS. THE BOARD IN REQUESTING YOUR OPINION IN THE PREMISES IS FACED WITH MANY SMALL CLAIMS WHICH BENEFICIARIES WILL FORFEIT BECAUSE OF THE EXPENSE INVOLVED.

A-88056, AUGUST 9, 1937, 17 COMP. GEN. 125

SOCIAL SECURITY ACT - PAYMENT OF AMOUNTS DUE MINORS IN VIEW OF THE GENERAL AUTHORITY IN SECTION 205 OF THE SOCIAL SECURITY ACT, 49 STAT. 624, REGARDING PAYMENTS IN AMOUNTS NOT IN EXCESS OF $500, WITHOUT ADMINISTRATION, TO PERSONS FOUND BY THE SOCIAL SECURITY BOARD TO BE ENTITLED THERETO UNDER STATE LAWS, AMOUNTS DUE A MINOR UNDER SECTIONS 203 AND 204 OF THE ACT, MAY BE PAID DIRECTLY TO HIM, WHERE NO GUARDIAN HAS BEEN APPOINTED, UPON DETERMINATION BY THE BOARD THAT HE POSSESSES SUFFICIENT RESPONSIBILITY, OR TO AN ADULT WITH WHOM THE MINOR RESIDES, WHO ACTS AS GUARDIAN IN FACT OR STANDS IN LOCO PARENTIS, BUT THE LIMITING OF SUCH PAYMENTS TO $50 INSTEAD OF $500 APPEARS ADVISABLE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE CHAIRMAN, SOCIAL SECURITY BOARD, AUGUST 9, 1937:

YOUR LETTER OF JULY 30, 1937, IS AS FOLLOWS:

SECTION 205 OF THE SOCIAL SECURITY ACT PROVIDES AS FOLLOWS:

"IF ANY AMOUNT PAYABLE TO AN ESTATE UNDER SECTION 203 OR 204 IS $500 OR LESS, SUCH AMOUNT MAY, UNDER REGULATIONS PRESCRIBED BY THE BOARD, BE PAID TO LESS, SUCH AMOUNT MAY, UNDER REGULATIONS PRESCRIBED BY THE BOARD, BE PAID TO THE PERSONS FOUND BY THE BOARD TO BE ENTITLED THERETO UNDER THE LAW OF THE STATE IN WHICH THE DECEASED WAS DOMICILED, WITHOUT THE NECESSITY OF COMPLIANCE WITH THE REQUIREMENTS OF LAW WITH RESPECT TO THE ADMINISTRATION OF SUCH ESTATE.'

ON PAGE 32 OF THE FINANCE COMMITTEE REPORT AND PAGE 20 OF THE WAYS AND MEANS COMMITTEE REPORT TO THE BILL THE FOLLOWING EXPLANATION APPEARS:

"SECTION 205. IF THE AMOUNT PAYABLE TO AN ESTATE UNDER SECTION 203 OR 204 IS $500 OR LESS, THE SOCIAL SECURITY BOARD MAY PAY IT DIRECTLY TO THE PERSONS IT DETERMINES TO BE ENTITLED THERETO UNDER THE LAW OF THE STATE IN WHICH THE DECEASED WAS DOMICILED.'

THE GENERAL EFFECT OF THIS PROVISION APPEARS TO BE THAT WITHOUT THE NECESSITY OF ADMINISTRATION, INCLUDING INCIDENTAL COURT ORDERS AS TO DISTRIBUTION, THE BOARD MAY PAY SUCH PERSONS AS IT DETERMINES WOULD BE SUCH DISTRIBUTEES. THE PURPOSE OF THE PROVISION APPEARS TO BE TO SAVE EXPENSE INCIDENT TO ADMINISTRATION. HEARINGS ON H.R. 7260, BEFORE THE SENATE FINANCE COMMITTEE MAY 14, 1935, PAGE 117.

UNDER THE LAWS OF SOME STATES, IN THE ADMINISTRATION OF A DECEASED'S ESTATE, AN ORDER OF DISTRIBUTION MAY UNDER STATED CONDITIONS PROVIDE FOR PAYMENT DIRECT TO THE MINOR, OR ON HIS BEHALF, TO SPECIFIED INDIVIDUALS SUCH AS HIS PARENT OR PERSON STANDING IN LOCO PARENTIS.

WHERE THERE ARE SUCH APPLICABLE PROVISIONS, AND IT APPEARS CLEAR THAT SUCH ORDER WOULD BE ENTERED AS PART OF FORMAL ADMINISTRATION OF THE DECEASED'S ESTATE, UNDER CERTAIN CIRCUMSTANCES, THE BOARD WOULD LIKE TO MAKE PAYMENT WITHOUT REQUIRING ADMINISTRATION OR THE ENTRY OF SUCH ORDER. THESE CONDITIONS WOULD INCLUDE:

(A) THE ABSENCE OF ADMINISTRATION OR CONTEMPLATED ADMINISTRATION OF THE DECEASED'S ESTATE.

(B) A BENEFIT PAYMENT OF SUCH SMALL AMOUNT AS TO BE EXHAUSTED OR LARGELY EXHAUSTED IN PAYING THE EXPENSE OF SECURING A COURT ORDER FOR PAYMENT, OR FOR THE APPOINTMENT OF A GUARDIAN.

THE BOARD IN REQUESTING YOUR OPINION IN THE PREMISES IS FACED WITH MANY SMALL CLAIMS WHICH BENEFICIARIES WILL FORFEIT BECAUSE OF THE EXPENSE INVOLVED, IF ADMINISTRATION OR THE APPOINTMENT OF A GUARDIAN IS NECESSARY. TYPICAL OF THESE IS THE PENDING CASE WHERE THE TOTAL PAYMENT IS $8.16. THE WIDOW IS ENTITLED TO ONE-THIRD AND THE MINOR CHILD TWO- THIRDS. UNDER STATE LAW, WHILE THE MOTHER IS NOT IPSO FACTO GUARDIAN OF THE MINOR'S ESTATE, IN THE SETTLEMENT OF ESTATES OR OTHERWISE, AN ORDER MAY BE ENTERED PAYING SMALL SUMS TO THE PARENT.

IN CASE ANY PAYMENTS UNDER THE ABOVE CONDITIONS WOULD MEET WITH YOUR APPROVAL, THE BOARD WOULD APPRECIATE YOUR SUGGESTION AS TO THE MAXIMUM AMOUNT WHICH SHOULD BE SO PAYABLE.

IN THE ABSENCE OF ADMINISTRATION OR CONTEMPLATED ADMINISTRATION OF THE ESTATE OF A DECEASED BENEFICIARY, SECTION 205 OF THE SOCIAL SECURITY ACT AUTHORIZES THE BOARD, WHEN THE AMOUNT DOES NOT EXCEED $500, TO MAKE PAYMENT "TO THE PERSONS FOUND BY THE BOARD TO BE ENTITLED THERETO.' ACCORDINGLY, WHEN A SMALL AMOUNT IS FOUND DUE A MINOR FOR WHOM NO GUARDIAN HAS BEEN APPOINTED PAYMENT MAY BE MADE DIRECTLY TO THE MINOR BY YOUR BOARD IF IT SHALL DETERMINE THAT THE MINOR POSSESSES SUFFICIENT RESPONSIBILITY. LIKEWISE, WHERE A MINOR IS RESIDING WITH AN ADULT WHO ACTS AS GUARDIAN IN FACT OR WHO STANDS IN LOCO PARENTIS TO THE MINOR, THE PAYMENTS OF SMALL SUMS DUE THE MINOR MAY BE MADE DIRECTLY TO SUCH WITHOUT FORMAL APPOINTMENT AS GUARDIAN. 15 COMP. GEN. 921, 16 ID. 619. THERE IS AUTHORITY IN SECTION 205 TO MAKE SUCH PAYMENTS UP TO THE AMOUNT OF $500, BUT IT IS SUGGESTED THAT YOUR BOARD CONSIDER THE ADVISABILITY OF MAKING SUCH PAYMENTS ONLY IN CASES IN WHICH THE AMOUNT INVOLVED DOES NOT EXCEED $50 BECAUSE IF PAYMENTS IN LARGER AMOUNTS ARE SO MADE THERE WOULD APPEAR TO BE A GREATER PROBABILITY OF THE FUNDS BEING WASTED INSTEAD OF BEING APPLIED TO THE PROPER BENEFIT OF THE INDIVIDUAL.