[Federal Register Volume 61, Number 18 (Friday, January 26, 1996)]
[Proposed Rules]
[Pages 2654-2658]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-1508]




[[Page 2653]]

_______________________________________________________________________

Part VII





Social Security Administration





_______________________________________________________________________



20 CFR Part 404



Cycling Payment of Social Security Benefits; Proposed Rule

  Federal Register / Vol. 61, No. 18 / Friday, January 26, 1996 / 
Proposed Rules  

[[Page 2654]]


SOCIAL SECURITY ADMINISTRATION

20 CFR Part 404

RIN 0960-AE31


Cycling Payment of Social Security Benefits

AGENCY: Social Security Administration (SSA).

ACTION: Proposed rules.

-----------------------------------------------------------------------

SUMMARY: Historically, social security benefits generally have been 
paid on the 3rd of each month. As a result of our ongoing efforts to 
improve service to our customers, we now propose to establish 
additional days throughout the month on which social security benefits 
will be paid.

DATES: To be sure that your comments are considered, we must receive 
them no later than March 26, 1996.

ADDRESSES: Comments should be submitted in writing to the Commissioner 
of Social Security, P.O. Box 1585, Baltimore, MD 21235, sent by telefax 
to (410) 966-2830, sent by E-Mail to ``[email protected],'' or 
delivered to the Division of Regulations and Rulings, Social Security 
Administration, 3-B-1 Operations Building, 6401 Security Boulevard, 
Baltimore, MD 21235, between 8:00 a.m. and 4:30 p.m. on regular 
business days. Comments received may be inspected during these same 
hours by making arrangements with the contact person shown below.

FOR FURTHER INFORMATION CONTACT: Lois Berg, Legal Assistant, Division 
of Regulations and Rulings, Social Security Administration, 6401 
Security Boulevard, Baltimore, MD 21235, (410) 965-1713.
    SSA plans to host an informational briefing on payment cycling for 
representatives of groups and organizations, and any others, that are 
interested in the initiative. The session will be designed to provide 
details and to answer questions on how SSA intends to implement payment 
cycling. It will not be designed to take public comments on the 
proposal. Those who would like to be invited to the session, which will 
be held in February, can request an invitation from SSA's Office of 
Communications. To reach the office, call (410) 965-1720 or fax (410) 
965-3903.

SUPPLEMENTARY INFORMATION:

Background

    The second phase of the National Performance Review (NPR), the 
Federal Reinventing Government effort, was announced by the President 
and Vice President on December 19, 1994. It was designed to focus 
attention on what each agency does, examining our mission and looking 
at our programs and functions to see if there are ways we can provide 
better service to the public and, at the same time, do our business in 
a more cost-effective manner, i.e., ``make government work better and 
cost less.'' All agencies were asked to assemble a team to review the 
programs and functions of their own agency. SSA's team worked closely 
with a team of representatives from NPR and the Office of Management 
and Budget (OMB) to develop recommendations for the Vice President's 
consideration.
    On April 11, 1995, the White House formally approved SSA's 
reinvention proposals and officially announced them the next day. One 
of these proposals was to cycle the payment of benefits.
    Recipients of Old-Age, Survivors and Disability Insurance (OASDI) 
benefits and Supplemental Security Income (SSI) payments currently are 
paid in the first few days of each month. While these payment days have 
never been required by the Social Security Act (the Act), which in 
Secs. 205(i) and 1631(a)(1) commits the time for making benefit 
payments to the discretion of the Commissioner of Social Security, it 
has been our longstanding administrative practice to make payment on 
these days. Monthly benefits are paid to all OASDI beneficiaries on the 
same day (generally the 3rd day of each month for the preceding month) 
and to all SSI beneficiaries on the same day (generally the 1st day of 
each month for which the payment is due).
    Over the years, a trend has developed that has resulted in 
deterioration of services we provide face-to-face or over the telephone 
on and around our payment days. This phenomenon is described fully 
below and is of particular concern to us in light of the Agency's 
commitment to provide ``world class'' service to our beneficiaries and 
customers.
    Executive Order (E.O.) 12862, issued on September 11, 1993 mandates 
that the standard of quality for services provided to the public for 
all government agencies shall be ``customer service equal to the best 
in the business.'' This standard has been incorporated into SSA's goal 
of providing ``world class'' public service. For example, when you 
conduct business with us, we have set as goals that:

 When you make an appointment to talk with someone at one of 
our field offices, we will serve you within 10 minutes of the scheduled 
time.
 When you call our toll-free 800 number, you will get through 
to it within 5 minutes of your first try.

    SSA's current practice of paying 47 million beneficiaries within 
the first 3 days of each month results in a large surge of work during 
the first week of each month. This surge includes a large number of 
visitors to field offices and calls to our toll-free 800 number to 
report nonreceipt of a check, question the amount paid, or ask about 
other payment-related issues. Approximately 9 percent of all calls 
during check week concern nonreceipt, compared to 3 percent during the 
rest of the month. As an example of the surge that occurs around the 
current payment days, on April 3, 1995, 1,091,282 calls were placed to 
SSA's 800 number. On April 14, 1995, the number of calls placed to our 
800 number decreased to 229,022.
    It is important to beneficiaries and customers to be able to reach 
SSA with fewer busy signals, and we have pledged to enable callers to 
get through to the 800 number within 5 minutes of their original 
attempt. However, in fiscal year (FY) 1994, during peak periods, 
customers encountered busy signals on SSA's 800 number 40-63 percent of 
the time and had to wait more than 5 minutes to get through about 30 
percent of the time. This delay often occurs at a time when it may be 
the most critical for the individual to reach us, to report a lost 
check, for example. Anyone who experiences a delay in reaching us to 
report a lost check also faces a delay in receiving a replacement 
check. Since many beneficiaries rely solely on their social security 
benefits, this can be a real hardship for them.
    Our goal is for our customers to have minimal waits for service 
when visiting a social security field office. Today, SSA does not 
always meet this goal. In FY 1994 there were 24 million visitors to our 
field offices. While the average wait during check week for individuals 
with an appointment was 8 minutes, some individuals with appointments 
had to wait over 2 hours. Thirty-two percent of the visitors to our 
offices without appointments in FY 1994 (typically people who have 
questions related to their payments or who want to report payment 
delivery problems) had to wait more than 30 minutes after arriving to 
be served. The average wait during check week for individuals without 
appointments was 16 minutes, although some individuals without 
appointments had to wait over 3 hours. This can be a particular 
hardship to those who are elderly or disabled, as well as to people who 
might take off from work to come to our offices. 

[[Page 2655]]

    The demographic and resource challenges we will face over the next 
25 years will make it even more difficult for us to meet our service-
delivery objectives. Currently, we pay 47 million OASDI and SSI 
beneficiaries within the first three days of each month. Due to the 
aging of the ``baby boom'' generation, by the year 2020, we will be 
paying about 75 million beneficiaries, a 60 percent increase over 
today's beneficiary population. This will place an unprecedented demand 
on our benefit delivery system.
    We are concerned that, in the next 25 years, with the prospect of 
about 75 million beneficiaries all receiving their payments on single 
days, there will be a serious deterioration in our service to the 
public, and we will not be able to provide the kind of service to which 
we are committed. The growth in beneficiary population is expected to 
place an even greater strain on SSA's resources at the beginning of the 
month. At the same time that the number of SSA customers is growing, 
SSA's resources are being reduced. Public Law 103-226 mandates an 
overall 12 percent reduction of Federal staffing levels by 1999, and 
this will impact SSA's resources. As a result, we are particularly 
concerned that we will not be able to cope with the monthly workload 
peaks and still maintain our goal of being readily accessible to the 
public unless we make significant changes in the way in which we 
deliver service.
    In the future, the increased number of beneficiaries and customers 
plus the mandated reduction of Federal staffing levels will have a real 
impact on the public's ability to contact us. This will be especially 
hard on individuals during check week (currently the first week in each 
month that benefits are paid) when the system will be overloaded. Check 
week is the time that beneficiaries often have the most urgent need to 
reach us to report nonreceipt or other problems related to their 
payment, and to request a replacement check.
    Each attempted phone contact by an SSA beneficiary, whether over or 
under age 65, may represent a personal crisis due, for example, to 
nonreceipt of benefits. Social security benefits affect, in particular, 
nearly all individuals age 65 and over in the United States (U.S.). For 
a significant proportion of individuals over age 65, the benefits 
represent 90 percent or more of their total income. For these 
beneficiaries, nonreceipt is not an abstract concept or statistic. It 
may represent the difference between paying rent or mortgage payments 
on time or late. It may mean the ability to purchase food. It may 
represent lack of gasoline or busfare to get to a medical appointment. 
A phone contact or visit may be by a recent widow(er) who is reporting 
the death of her/his spouse. One successful telephone call may be all 
that is necessary to enable SSA to convert retirement benefits as a 
spouse into higher widow(er)'s benefits. An unsuccessful phone contact 
could prevent us from holding back payments to the deceased individual 
and scheduling benefits to the newly widowed beneficiary. When 
individuals are unsuccessful at reaching us by telephone, either they, 
or a friend or family member, may take time off from work to come into 
a field office. Any additional delay waiting in the field office causes 
them to lose even more time from work.
    Today, we are attempting to cope with the uneven workload pattern 
in order to maintain our level of service through a series of 
administrative and management initiatives. For example, at the 
beginning of the month, we redeploy staff from other work to handle the 
increase in telephone inquiries which sometimes exceeds two million 
calls a day. While this practice has been generally successful so far, 
it will not continue to be as effective in the future when the number 
of beneficiaries increases substantially and our staffing decreases.
    We are considering all our options in preparing for this increase 
in SSA's workloads and staff reductions and, accordingly, are looking 
for ways to reengineer our various processes to allow us to achieve our 
world class customer service goals and, at the same time, increase 
efficiency and productivity to the maximum extent possible. It is 
clear, though, that SSA's goal to achieve a level of world class 
customer service cannot be realized unless our workloads are evened 
out. This is critical to providing better access to SSA's services for 
our beneficiaries and customers.
    The release of all OASDI and SSI payments on single days also has 
an adverse effect on certain sectors of the economy. Based on meetings 
we held with representatives of the banking and business community, the 
Department of the Treasury (DT), the Federal Reserve System (FRS) and 
the U.S. Postal Service (USPS), it is clear that the large, once-a-
month OASDI and SSI payment files are creating many problems. The 
banking and business community, the DT, FRS and the USPS all have to 
bear the expense of providing sufficient resources and processing 
capacity to deal with OASDI and SSI payments as they flow through the 
national payment system at the beginning of the month. This capacity is 
not needed throughout the remainder of the month.
    Equally significant is the growing operational risk that is 
associated with SSA's current payment pattern. Representatives from 
several large financial institutions made it clear that when the social 
security direct deposit payment file becomes available for processing 
from FRS, they stop all other business and devote their entire 
operation to ensuring the file is processed quickly and accurately. 
Because of the inordinately large number of payments involved, these 
institutions must ensure that nothing goes wrong as the file passes 
through the national payment system and is deposited into individual 
customers' accounts. Any event that adversely affects the operational 
capacity of DT, FRS or a large financial institution in the 1 to 4 day 
window prior to the 3rd of the month may result in the delay or 
nonreceipt of literally millions of social security benefit payments 
which could create hardship for SSA beneficiaries. Leveling the social 
security payment files through cycling will help prevent this 
operational risk and resulting hardship.
    In order to improve our service to the public, both now and in the 
future, we propose to spread the payment of OASDI benefits throughout 
the month, rather than continue to make all benefit payments on single 
days at the beginning of the month. That is, we will establish several 
additional payment days for each month, and pay the full monthly 
benefit to some beneficiaries on the first of those payment days, to 
other beneficiaries on the second of those payment days, and so forth. 
The payment day, or cycle, on which a beneficiary is paid generally 
will not be changed, so that if you are paid on the second payment day 
in one month you will be paid on the second payment day in each 
succeeding month as well. This approach, which we call ``cycling of 
payments,'' will level the workload peaks associated with our current 
practice of paying all benefits on the same day. Since calls and visits 
associated with receipt of the monthly benefit payment will be 
distributed throughout the month, rather than concentrated in a few 
days, there will be shorter waiting times for assistance and we will be 
able to achieve or sustain our world class service to the public.
    It is important to note that payment cycling will not change the 
way benefits are computed. We will continue to follow the same rules in 
determining month of entitlement and the payment amount. People whose 
benefits are 

[[Page 2656]]
cycled will receive the same amount they would receive if they were 
paid on the 3rd of the month.
    The benefits to society of implementing payment cycling are 
potentially significant but extremely difficult to estimate. Cycling 
will benefit members of the public in that they will have better access 
to SSA services, including shorter waiting times in field offices and 
when calling the 800 number, as SSA's workloads increase in the future. 
Cycling will benefit the business and banking communities in that they 
will be better able to utilize their resources throughout the month, 
processing social security payments on a weekly basis. Cycling will 
also reduce the risk involved in processing large once-a-month files. 
If we continue to pay all beneficiaries on single days once-a-month, 
SSA's service to the public will deteriorate, and the adverse impact 
that the once-a-month payments have on the business and financial 
community will continue, as will the growing operational risk that goes 
along with processing all benefit payments at one time.
    After considering how best to implement the proposal to cycle the 
timing of benefit payments, we are proposing the following:
    1. We will establish three additional payment days throughout the 
month (i.e., the second, third and fourth Wednesdays of the month) on 
which individuals may be paid. This schedule will alleviate to the 
maximum extent possible the current Monday workload peak which is also 
now being experienced by SSA's toll-free 800 number and field offices 
when the payment day falls on Friday, Saturday, Sunday or Monday, which 
occurs more than half of the time.
    2. We will implement payment cycling prospectively only for new 
OASDI beneficiaries whose claims are filed on or after the effective 
date of the final rule for payment cycling. We propose to implement 
payment cycling by January 1997. Payments to current beneficiaries will 
not be cycled, as they are already in the established pattern of 
receiving their benefits on the third of the month.
    3. We will assign one of the newly established payment days to each 
new OASDI beneficiary based on the date of birth of the person on whose 
record entitlement is established (the insured individual). Generally, 
new OASDI beneficiaries who receive auxiliary or survivors benefits on 
an insured individual's record will be assigned to the payment day 
based on the insured individual's date of birth. Insured individuals 
who are already being paid auxiliary or survivor benefits on the 3rd of 
the month when payment cycling is implemented and who subsequently 
become entitled on their own record after payment cycling is 
implemented will continue to receive all benefits on the 3rd. However, 
all other insured individuals who become entitled on their own record 
and on another record after payment cycling is implemented will be paid 
all benefits to which they are entitled on the payment day assigned 
based on their own date of birth. Insured individuals born on the 1st 
through the 10th of the month will be paid on the second Wednesday of 
each month. Insured individuals born on the 11th through the 20th of 
the month will be paid on the third Wednesday of each month. Insured 
individuals born after the 20th of the month will be paid on the fourth 
Wednesday of each month. With only a few exceptions described below, no 
new OASDI beneficiaries will receive payments on the 3rd of the month.
    4. We may accommodate some beneficiaries currently being paid on 
the 3rd of the month who voluntarily wish to change to the payment day 
that would be selected by the date of birth criteria described above, 
in order to accelerate the workload leveling effect of cycling. For 
example, we plan to allow them to volunteer to switch if only one 
person is being paid on the record or, if there are other beneficiaries 
being paid on the same record, all others agree, in writing, to the 
change. However, once a volunteer is assigned to a new payment day, 
that day will be permanent and the person will not be allowed to change 
back to the 3rd of the month. We will not allow beneficiaries being 
paid on one of the three new days to switch to a different payment day.
    5. We will not include persons receiving SSI payments, and persons 
concurrently entitled to both OASDI and SSI benefits, in payment 
cycling. Since SSI is a needs-based program, we believe we should 
continue to pay these individuals as early in the month as possible. 
Concurrently entitled individuals who lose eligibility for SSI will 
continue to be paid on the 3rd.
    6. We will not apply payment cycling to OASDI beneficiaries whose 
income is deemed to SSI beneficiaries. The reason is that most deeming 
cases involve family members who receive Federal income maintenance 
benefits. Those family units should continue to receive payments as 
early in the month as possible. Likewise, payment cycling will not 
apply to OASDI beneficiaries who, due to their income and/or resources, 
are not entitled to SSI but who are covered by the State in which they 
live for Medicaid and the State covers their Medicare premium. The 
Health Care Financing Administration requested that these OASDI 
beneficiaries be paid early in the month.
    7. Payment cycling will not apply to beneficiaries living in a 
foreign country. For those beneficiaries being paid by check, foreign 
check delivery is often unreliable. However, with one delivery day on 
the 3rd of the month it is easier to target when checks should be 
received than if they were sent four times throughout the month. Also, 
since foreign beneficiaries do not have access to the 800 number or to 
SSA's field offices in the country where they reside, these facilities 
will not be adversely affected if we continue to pay foreign 
beneficiaries on the 3rd of the month. The presence of a foreign 
address for any beneficiary on a social security record will mean that 
all beneficiaries on that record will be paid on the 3rd of the month. 
The reason is that, for operational purposes, we are assigning a single 
payment day for all individuals who receive benefits on the earnings 
record of a particular individual. Once a beneficiary has reported a 
foreign address and all individuals receiving benefits on that account 
are changed to the 3rd of the month, the payment day for all of them 
will remain the 3rd of the month even if the person with the foreign 
address returns to the U.S. This is to prevent potential confusion 
caused by beneficiaries frequently leaving and entering the U.S.
    8. We will notify affected beneficiaries in writing of the 
particular monthly payment day that is assigned to them. However, the 
assignment of a payment day is not an initial determination and is not 
appealable. Beneficiaries have never been able to choose their payment 
day and will not be able to choose a payment day under payment cycling.

Early Consultations

    We conducted 10 focus group meetings at 5 locations around the 
country to solicit comments and obtain reaction from the public to 
cycling payments throughout the month. Two meetings were held in each 
location: one with current beneficiaries age 21 and over and one with 
future beneficiaries age 21 and over. After we described our future 
workload projections and resultant service delivery deterioration, the 
vast majority of future beneficiaries with whom we met said they would 
not mind being paid later in the month.
    We also conducted a series of separate meetings with stakeholders 
including representatives from the business 

[[Page 2657]]
community, financial community, other government agencies and advocacy 
groups. The overwhelming consensus of opinion among all stakeholders 
who participated was that SSA should implement some form of payment 
cycling.

Request for Information From the Public

    SSA is interested in receiving comments from the public. We are 
interested in your views about the importance of improved service and 
access to SSA personnel and the use of payment cycling as one means to 
achieve better service.

Request for Information From Business and Financial Community

    SSA is particularly interested in the incremental cost or savings 
to the business and financial community of changing to the proposed 
payment schedule. Therefore, we invite commenters from the business and 
financial community to provide data and analysis quantifying these 
effects. The more specific the data, the more they will help us to 
assess the cost or savings or any other effect of this proposed 
regulation.

Explanation of Revisions

    We propose to add a new Sec. 404.1807 and to amend Sec. 404.1805 to 
reflect the policies described above. We propose to add a new 
Sec. 404.1807(f) to reflect Sec. 708 of the Act, which provides that 
payment will be moved to the prior business day if the scheduled day 
for payment falls on a Saturday, Sunday, or Federal legal holiday. We 
also propose to add a new paragraph (s) to existing Sec. 404.903 to 
show that assignment of a monthly payment day is not an initial 
determination and, therefore, it is not subject to the administrative 
review process provided in subpart J of our regulations or to judicial 
review.

Electronic Versions

    The electronic file of this document is available on the Federal 
Bulletin Board (FBB) at 9 a.m. on the date of publication in the 
Federal Register. To download the file, modem dial (202) 512-1387. The 
FBB instructions will explain how to download the file and the fee. 
This file is in WordPerfect and will remain on the FBB during the 
comment period.

Regulatory Procedures

E.O. 12866

    We have determined that these proposed regulations meet the 
criteria for a significant regulatory action under E.O. 12866. 
Therefore, we prepared and submitted to OMB an assessment of the 
potential costs and benefits of this regulatory action. This assessment 
also contains an analysis of alternative policies we considered and 
chose not to adopt. It is available for review by members of the public 
by contacting SSA.

Regulatory Flexibility Act

    These regulations affect when social security recipients receive 
their payments. Recipients are not small entities within the definition 
of the Regulatory Flexibility Act. Therefore, these regulations will 
not have a significant impact on a substantial number of small 
entities.

Paperwork Reduction Act

    These proposed regulations impose no reporting/recordkeeping 
requirements necessitating clearance by OMB.

(Catalog of Federal Domestic Assistance Program Nos. 96.001 Social 
Security-Disability Insurance; 96.002 Social Security-Retirement 
Insurance; 96.003 Social Security-Special Benefits for Persons Aged 
72 and Over; 96.004 Social Security-Survivors Insurance.)

List of Subjects in 20 CFR Part 404

    Administrative Practice and Procedure, Blind benefits, Old-Age, 
Survivors and Disability Benefits; Reporting and recordkeeping 
requirements; Social Security.

    Dated: November 30, 1995.
Shirley S. Chater,
Commissioner of Social Security.
    For the reasons set forth in the preamble, subparts J and S of part 
404 of chapter III of title 20 of the Code of Federal Regulations is 
proposed to be amended as set forth below.

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE 
(1950-    )

    1. The authority citation for subpart J of part 404 is revised to 
read as follows:

    Authority: Secs. 201(j), 205(a), (b), (d)-(h), and (j), 221, 
225, and 702(a)(5) of the Social Security Act (42 U.S.C. 401(j), 
405(a), (b), (d)-(h), and (j), 421, 425 and 902(a)(5)); 31 U.S.C. 
3720A; sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42 U.S.C. 405 note); 
sec. 6(a), (b), and (c)-(e), Pub. L. 98-460, 98 Stat. 1802 (42 
U.S.C. 1383b, 421 note).

    2. Section 404.903 is amended by removing the word ``and'' at the 
end of paragraph (q), and by removing the period at the end of 
paragraph (r) and adding a semicolon and the word ``and'' in its place, 
and adding paragraph (s) to read as follows:


Sec. 404.903  Administrative actions that are not initial 
determinations.

* * * * *
    (s) The assignment of a monthly payment day (see Sec. 404.1807).
    3. The authority citation for subpart S of part 404 is revised to 
read as follows:

    Authority: Secs. 205(a) and (n), 207, and 702(a)(5) of the 
Social Security Act (42 U.S.C. 405(a) and (n), 407, and 902(a)(5)).

    4. Section 404.1805 is amended by revising paragraph (a)(3) to read 
as follows:


Sec. 404.1805  Paying benefits.

    (a) * * *
    (3) The time at which the payment or payments should be made in 
accordance with Sec. 404.1807.
* * * * *
    5. Section 404.1807 is added to read as follows:


Sec.  404.1807  Monthly payment day.

    (a) General. Once we have made a determination or decision that you 
are entitled to recurring monthly benefits, you will be assigned a 
monthly payment day. Thereafter, any recurring monthly benefits which 
are payable to you will be certified to the Managing Trustee for 
delivery on or before that day of the month as part of our 
certification under Sec. 404.1805(a)(3). Except as provided in 
paragraphs (c)(2) through (c)(6), once you have been assigned a monthly 
payment day, that day will not be changed.
    (b) Assignment of Payment Day. (1) We will assign the same payment 
day for all individuals who receive benefits on the earnings record of 
a particular insured individual. See paragraph (c)(5) for exception.
    (2) The payment day will be selected based on the day of the month 
on which the insured individual was born. Insured individuals born on 
the 1st through the 10th of the month will be paid on the second 
Wednesday of each month. Insured individuals born on the 11th through 
the 20th of the month will be paid on the third Wednesday of each 
month. Insured individuals born after the 20th of the month will be 
paid on the fourth Wednesday of each month. See paragraph (c) for 
exceptions.
    (3) We will notify you in writing of the particular monthly payment 
day that is assigned to you.
    (c) Exceptions. (1) If you or any other person became entitled to 
benefits on the earnings record of the insured individual based on an 
application filed before (effective date of cycling), you will continue 
to receive your benefits on the 3rd day of the month (but see paragraph 
(c)(6) of this section). All 

[[Page 2658]]
persons who subsequently become entitled to benefits on that earnings 
record will be assigned to the 3rd day of the month as the monthly 
payment day.
    (2) If you or any other person became entitled to benefits on the 
earnings record of the insured individual based on an application filed 
after (effective date of cycling) and also become entitled to 
Supplemental Security Income (SSI) benefits or have income which is 
deemed to an SSI beneficiary (per Sec. 416.1160), all persons who are 
or become entitled to benefits on that earnings record will be assigned 
to the 3rd day of the month as the monthly payment day. We will notify 
you in writing if your monthly payment day is being changed to the 3rd 
of the month due to this provision.
    (3) If you or any other person became entitled to benefits on the 
earnings record of the insured individual based on an application filed 
after (effective date of cycling) and also reside in a foreign country, 
all persons who are or become entitled to benefits on that earnings 
record will be assigned to the 3rd day of the month as the monthly 
payment day. We will notify you in writing if your monthly payment day 
is being changed to the 3rd of the month due to this provision.
    (4) If you or any other person became entitled on the earnings 
record of the insured individual based on an application filed after 
(effective date of cycling) and are not entitled to SSI but are or 
become covered by the State where you live for Medicaid and the State 
covers your Medicare premium, all persons who are or become entitled to 
benefits on that earnings record will be assigned to the 3rd day of the 
month as the monthly payment day. We will notify you in writing if your 
monthly payment day is being changed to the 3rd of the month due to 
this provision.
    (5) Insured individuals who are already being paid auxiliary or 
survivor benefits on the 3rd of the month and who become entitled on 
their own record after (effective date of cycling) will continue to 
receive all benefits on the 3rd of the month. However, all other 
insured individuals entitled on their own record and on another record 
after (effective date of cycling), will be paid all benefits to which 
they are entitled on the payment day assigned based on their own date 
of birth.
    (6) If the day regularly scheduled for the delivery of your benefit 
payment falls on a Saturday, Sunday, or Federal legal holiday, you will 
be paid on the first preceding day that is not a Saturday, Sunday, or 
Federal legal holiday.

[FR Doc. 96-1508 Filed 1-25-96; 8:45 am]
BILLING CODE 4190-29-P