ABOUT 28,000 RECIPIENTS REPORT EACH MONTH THAT THEY HAVE NOT RECEIVED THEIR INCOME CHECKS. BECAUSE OF DELAYS IN THE SYSTEM OF REPLACING CHECKS, THREE MAJOR CLASS ACTION SUITS HAVE BEEN BROUGHT AGAINST DHEW, AND A NUMBER OF BILLS HAVE BEEN INTRODUCED IN CONGRESS TO ASSIST THOSE WHO DO NOT RECEIVE THEIR CHECKS. AWARE OF THESE PROBLEMS, SOCIAL SECURITY BEGAN AN EXPEDITED CHECK REPLACEMENT SYSTEM IN AUGUST 1974. ALTHOUGH A SOCIAL SECURITY STUDY SHOWED THAT CHECKS COULD BE REPLACED WITHIN 10 DAYS, PERSONNEL ERRORS CAUSED DELAYS TO PERSIST. IN APRIL 1977, SOCIAL SECURITY INTRODUCED MORE CHANGES TO SPEED UP REPLACEMENT CHECKS. HOWEVER, THESE REFORMS FAILED TO CORRECT THE ERRORS MADE BY DISTRICT OFFICE PERSONEL WHO FAILED TO CORRECTLY PROCESS NONRECEIPT CLAIMS. THE CURRENT SYSTEM IS DESIGNED TO REPLACE MISSING CHECKS WITHIN 4 TO 6 DAYS IF DISTRICT OFFICE PERSONNEL ENTER THE CORRECT INFORMATION INTO THE CENTRAL COMPUTER. REFORM MEASURES CENTER ON THE ISSUANCE OF EMERGENCY LOANS TO PERSONS NOT RECEIVING CHECKS. SUCH A SYSTEM COULD BE COSTLY, DIFFICULT TO IMPLEMENT, AND SUBJECT TO ABUSE. THE BEST ALTERNATIVE FOR PROVIDING IMMEDIATE ASSISTANCE IS FOR SOCIAL SECURITY TO USE PREPOSITIONED CHECKS AND A CASH FUND TO REIMBURSE CLAIMANTS WHEN THEY VISIT THE DISTRICT OFFICE. OVERALL, ANY SYSTEM FOR IMMEDIATE CHECK REPLACEMENT SHOULD REQUIRE RECIPIENTS CASHING BOTH ORIGINAL AND REPLACEMENT CHECKS TO BE IDENTIFIED. SOCIAL SECURITY SHOULD REQUIRE DISTRICT OFFICES TO MAKE PERIODIC REVIEWS OF NONRECEIPT TRANSMISSIONS FOR ACCURANCY, ESTABLISH CONTROLS TO ASSURE TIMELY PROCESSING OF REJECTED NONRECEIPT CLAIMS, AND EMPHASIZE THE NEED FOR DISTRICT OFFICES TO INPUT A CHANGE OF ADDRESS WITH NONRECEIPT CLAIMS FOR RECIPIENTS WHO HAVE RECENTLY MOVED. RECOMMENDATIONS TO CONGRESS ARE OUTLINED. FOOTNOTES, SOME TABULAR DATA, AND AN APPENDIX PRESENTING RELATED CORRESPONDENCE ARE INCLUDED. (WJR)