(a) General. As used in this subpart, the term ``underpayment''
includes a payment in an amount less than the amount of the benefit due
for such month, and nonpayment where some amount of such benefits is
payable.
(b) Underpaid individual is living. If an individual to whom an
underpayment was made is living, the deficit represented by such
underpayment shall be paid to such individual either in a single
payment (if he or she is not entitled to a monthly benefit or if a
single payment is requested by the claimant in writing) or by
increasing one or more monthly benefit payments to which such
individual becomes entitled.
(c) Underpaid individual dies before adjustment of underpayment. If
an individual to whom an underpayment was made dies before receiving
payment of the deficit or negotiating the check or checks representing
payment of the deficit, such payment shall be distributed to the living
person (or persons) in the highest order of priority as follows:
(1) The deceased individual's surviving spouse who was either:
(i) Living in the same household with the deceased individual at
the time of such individual's death; or
(ii) In the case of a deceased miner, entitled for the month of
death to black lung benefits as his or her surviving spouse or
surviving divorced spouse.
(2) In the case of a deceased miner or spouse his or her child
entitled to benefits as the surviving child of such miner or surviving
spouse for the month in which such miner or spouse died (if more than
one such child, in equal shares to each such child).
(3) In the case of a deceased miner, his parent entitled to
benefits as the surviving parent of such miner for the month in which
such miner died (if more than one such parent, in equal shares to each
such parent).
(4) The surviving spouse of the deceased individual who does not
qualify under paragraph (c)(1) of this section.
(5) The child or children of the deceased individual who do not
qualify under paragraph (c)(2) of this section (if more than one such
child, in equal shares to each such child).
(6) The parent or parents of the deceased individual who do not
qualify under paragraph (c)(3) of this section (if more than one such
parent, in equal shares to each such parent).
(7) The legal representative of the estate of the deceased
individual as defined in paragraph (e) of this section.
(d) Deceased beneficiary. In the event that a person, who is
otherwise qualified to receive payments as the result of a deficit
caused by an underpayment under the provisions of paragraph (c) of this
section, dies before receiving payment or before negotiating the check
or checks representing such payment, his or her share of the
underpayment shall be divided among the remaining living person(s) in
the same order or priority. In the event that there is (are) no other
such person(s), the underpayment shall be paid to the living person(s)
in the next lower order of priority under paragraph (c) of this
section.
(e) Definition of legal representative. The term ``legal
representative,'' for the purpose of qualifying for receipt of an
underpayment, generally means the executor or the administrator of the
estate of the deceased beneficiary. However, it may also include an
individual, institution or organization acting on behalf of an
unadministered estate, provided the person can give the Office good
acquittance (as defined in paragraph (f) of this section). The
following persons may qualify as legal representative for purposes of
this section, provided they can give the Office good acquittance:
(1) A person who qualifies under a State's ``small estate''
statute; or
(2) A person resident in a foreign country who under the laws and
customs of that country, has the right to receive assets of the estate;
or
(3) A public administrator; or
(4) A person who has the authority under applicable law to collect
the assets of the estate of the deceased beneficiary.
(f) Definition of ``good acquittance.'' A person is considered to
give the Office ``good acquittance'' when payment to that person will
release the Office from further liability for such payment.
