Overpayments
- Statutes,
Regulations and Rules
(Note: There are other relevant statutes, rules, and regs, but those compiled here are the most useful when dealing with overpayment issues. In addition, it should be noted that this page was last updated 12/7/99, and there may be changes to the law since that time.)
United
States Code Title 42
§ 404. Overpayments and underpayments
(a) Procedure for adjustment or recovery
(b) No recovery from persons without fault
(c) Nonliability of certifying and disbursing officers
(d) Payment to survivors or heirs when eligible person is deceased
(e) Adjustments due to supplemental security income payments
(f) Collection of delinquent amounts
Code
of Federal Regulations Title 20
§ 404.501 General applicability of section 204 of the Act.
§ 404.502a Notice of right to waiver consideration.
§ 404.504 Relation to provisions for reductions and increases.
§ 404.506 When waiver may be applied and how to process the request.
§ 404.508 Defeat the purpose of Title II.
§ 404.509 Against equity and good conscience; defined.
§ 404.510a When an individual is "without fault" in an entitlement overpayment.
§ 404.511 When an individual is at "fault" in a deduction overpayment.
§ 404.512 When adjustment or recovery of an overpayment will be waived.
§ 404.515 Collection and compromise of claims for overpayment.
§ 404.520 Referral of overpayments to the Department of the Treasury for tax refund offset--General.
§ 404.521 Notice to overpaid individual.
§ 404.522 Review within SSA that an overpayment is past due and legally enforceable.
Social
Security Rulings
OVERPAYMENT-WITHOUT FAULT-WAIVER OF RECOVERY AND ADJUSTMENT
Hallex
ISSUES AND EXAMPLES OF LANGUAGE WHICH MAY BE APPROPRIATE IN THE NOTICE OF HEARING
Program Operations Manual System
GN 02201.011 Prerecoupment Review
GN 02201.025 Overpayment - Reconsideration
GN 02201.050 Overpayment - Fraud Referral
GN 02210.006 Adjustment of Benefits Due the Overpaid Individual
GN 02210.007 Adjustment of Benefits Due Other Than the Overpaid Individual
GN 02210.220 Request for Waiver - $500 Tolerance - Actions
GN 02250.000 WAIVER PROVISIONS FOR TITLE II, TITLE XVIII AND BLACK LUNG OVERPAYMENTS
GN 02250.290 Development of Waiver of Recovery of Title XVIII Overpayments
GN 02250.310 Amount for Which Waiver Is Considered
GN 02250.330 Blanket Waiver for Dollar Down Rounding Overpayments
GN 02250.350 Waiver Under the $500 Tolerance
SI 02260.001 SSI Overpayment - Basic Requirements Concerning Waiver
SM 00610.721 Recovery of an Overpayment from Other than the Overpaid Person
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UNITED STATES CODE ANNOTATED
TITLE 42. THE PUBLIC HEALTH AND WELFARE
CHAPTER 7--SOCIAL SECURITY
SUBCHAPTER II--FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE BENEFITS
Current through P.L. 106-38, approved 7-22-99
(1) Whenever the Commissioner of Social Security finds that more or less than the correct amount of payment has been made to any person under this subchapter, proper adjustment or recovery shall be made, under regulations prescribed by the Commissioner of Social Security, as follows:
(A) With respect to payment to a person of more than the correct amount, the Commissioner of Social Security shall decrease any payment under this subchapter to which such overpaid person is entitled, or shall require such overpaid person or his estate to refund the amount in excess of the correct amount, or shall decrease any payment under this subchapter payable to his estate or to any other person on the basis of the wages and self-employment income which were the basis of the payments to such overpaid person, or shall obtain recovery by means of reduction in tax refunds based on notice to the Secretary of the Treasury as permitted under section 3720A of Title 31, or shall apply any combination of the foregoing. A payment made under this subchapter on the basis of an erroneous report of death by the Department of Defense of an individual in the line of duty while he is a member of the uniformed services (as defined in section 410(m) of this title) on active duty (as defined in section 410(l) of this title) shall not be considered an incorrect payment for any month prior to the month such Department notifies the Commissioner of Social Security that such individual is alive.
(B) With respect to payment to a person of less than the correct amount, the Commissioner of Social Security shall make payment of the balance of the amount due such underpaid person, or, if such person dies before payments are completed or before negotiating one or more checks representing correct payments, disposition of the amount due shall be made in accordance with subsection (d) of this section.
(2) Notwithstanding any other provision of this section, when any payment of more than the correct amount is made to or on behalf of an individual who has died, and such payment--
(A) is made by direct deposit to a financial institution;
(B) is credited by the financial institution to a joint account of the deceased individual and another person; and
(C) such other person was entitled to a monthly benefit on the basis of the same wages and self-employment income as the deceased individual for the month preceding the month in which the deceased individual died,
the amount of such payment in excess of the correct amount shall be treated as a payment of more than the correct amount to such other person.
In any case in which more than the correct amount of payment has been made, there shall be no adjustment of payments to, or recovery by the United States from, any person who is without fault if such adjustment or recovery would defeat the purpose of this subchapter or would be against equity and good conscience. In making for purposes of this subsection any determination of whether any individual is without fault, the Commissioner of Social Security shall specifically take into account any physical, mental, educational, or linguistic limitation such individual may have (including any lack of facility with the English language).
No certifying or disbursing officer shall be held liable for any amount certified or paid by him to any person where the adjustment or recovery of such amount is waived under subsection (b) of this section, or where adjustment under subsection (a) of this section is not completed prior to the death of all persons against whose benefits deductions are authorized.
If an individual dies before any payment due him under this subchapter is completed, payment of the amount due (including the amount of any unnegotiated checks) shall be made--
(1) to the person, if any, who is determined by the Commissioner of Social Security to be the surviving spouse of the deceased individual and who either (i) was living in the same household with the deceased at the time of his death or (ii) was, for the month in which the deceased individual died, entitled to a monthly benefit on the basis of the same wages and self-employment income as was the deceased individual;
(2) if there is no person who meets the requirements of paragraph (1), or if the person who meets such requirements dies before the payment due him under this subchapter is completed, to the child or children, if any, of the deceased individual who were, for the month in which the deceased individual died, entitled to monthly benefits on the basis of the same wages and self-employment income as was the deceased individual (and, in case there is more than one such child, in equal parts to each such child);
(3) if there is no person who meets the requirements of paragraph (1) or (2), or if each person who meets such requirements dies before the payment due him under this subchapter is completed, to the parent or parents, if any, of the deceased individual who were, for the month in which the deceased individual died, entitled to monthly benefits on the basis of the same wages and self-employment income as was the deceased individual (and, in case there is more than one such parent, in equal parts to each such parent);
(4) if there is no person who meets the requirements of paragraph (1), (2), or (3), or if each person who meets such requirements dies before the payment due him under this subchapter is completed, to the person, if any, determined by the Commissioner of Social Security to be the surviving spouse of the deceased individual;
(5) if there is no person who meets the requirements of paragraph (1), (2), (3), or (4), or if each person who meets such requirements dies before the payment due him under this subchapter is completed, to the person or persons, if any, determined by the Commissioner of Social Security to be the child or children of the deceased individual (and, in case there is more than one such child, in equal parts to each such child);
(6) if there is no person who meets the requirements of paragraph (1), (2), (3), (4), or (5), or if each person who meets such requirements dies before the payment due him under this subchapter is completed, to the parent or parents, if any, of the deceased individual (and, in case there is more than one such parent, in equal parts to each such parent); or
(7) if there is no person who meets the requirements of paragraph (1), (2), (3), (4), (5), or (6), or if each person who meets such requirements dies before the payment due him under this subchapter is completed, to the legal representative of the estate of the deceased individual, if any.
For payments which are adjusted by reason of payment of benefits under the supplemental security income program established by subchapter XVI of this chapter, see section 1320a-6 of this title.
(1) With respect to any deliquent > [FN1] amount, the Commissioner of Social Security may use the collection practices described in sections 3711(e), 3716, 3717, and 3718 of Title 31 and in section 5514 of Title 5, as in effect immediately after April 26, 1996.
(2) For purposes of paragraph (1), the term "delinquent amount" means an amount--
(A) in excess of the correct amount of payment under this title;
(B) paid to a person after such person has attained 18 years of age; and
(C) determined by the Commissioner of Social Security, under regulations, to be otherwise unrecoverable under this section after such person ceases to be a beneficiary under this title.
For payments which are adjusted or withheld to recover an overpayment of supplemental security income benefits paid under subchapter XVI of this chapter [> 42 U.S.C.A. § 1381 et seq.] (including State supplementary payments paid under an agreement pursuant to section 1382e(a) of this title or section 212(b) of Public Law 93-66), see section 1320b-17 of this title.
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CODE OF FEDERAL REGULATIONS
TITLE 20--EMPLOYEES' BENEFITS
CHAPTER III--SOCIAL SECURITY ADMINISTRATION
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
SUBPART F--OVERPAYMENTS, UNDERPAYMENTS, WAIVER OF ADJUSTMENT OR RECOVERY OF OVERPAYMENTS, AND LIABILITY OF A CERTIFYING OFFICER
Current through September 7, 1999; 64 FR 48567
(a) In general. Section 204 of the Act provides for adjustment as set forth in §§ 404.502 and 404.503, in cases where an individual has received more or less than the correct payment due under title II of the Act. As used in this subpart, the term "overpayment" includes a payment in excess of the amount due under title II of the Act, a payment resulting from the failure to impose deductions or to suspend or reduce benefits under sections 203, 222(b), 224, and 228(c), and (d), and (e) of the Act (see Subpart E of this part), a payment pursuant to section 205(n) of the Act in an amount in excess of the amount to which the individual is entitled under section 202 or 223 of the Act, a payment resulting from the failure to terminate benefits, and a payment where no amount is payable under title II of the Act. The term "underpayment" as used in this subpart refers only to monthly insurance benefits and includes nonpayment where some amount of such benefits was payable. An underpayment may be in the form of an accrued unpaid benefit amount for which no check has been drawn or in the form of an unnegotiated check payable to a deceased individual. The provisions for adjustment also apply in cases where through error:
(1) A reduction required under section 202(j)(1), 202(k)(3), 203(a), or 205(n) of the Act is not made, or
(2) An increase or decrease required under section 202(d)(2), or 215 (f) or (g) of the Act is not made, or
(3) A deduction required under section 203(b)(as may be modified by the provisions of section 203(h)), 203(c), 203(d), 203(i), 222(b), or 223(a)(1)(D) of the Act or section 907 of the Social Security Amendments of 1939 is not made, or
(4) A suspension required under section 202(n) or 202(t) of the Act is not made, or
(5) A reduction under section 202(q) of the Act is not made, or
(6) A reduction, increase, deduction, or suspension is made which is either more or less than required, or
(7) A payment in excess of the amount due under title XVIII of the Act was made to or on behalf of an individual (see > 42 CFR 405.350-> 405.351) entitled to benefits under title II of the Act, or
(8) A payment of past due benefits is made to an individual and such payment had not been reduced by the amount of attorney's fees payable directly to an attorney under section 206 of the Act (see § 404.977).
(9) A reduction under § 404.408b is made which is either more or less than required.
(b) Payments made on the basis of an erroneous report of death. Any monthly benefit or lump sum paid under title II of the Act on the basis of an erroneous report by the Department of Defense of the death of an individual in the line of duty while such individual was a member of the uniformed services (as defined in section 210(m) of the Act) on active duty (as defined in section 210(l) of the Act) is deemed a correct payment for any month prior to the month such Department notifies the Administration that such individual is alive.
(c) Payments made by direct deposit to a financial institution. When a payment in excess of the amount due under title II of the Act is made by direct deposit to a financial institution to or on behalf of an individual who has died, and the financial institution credits the payment to a joint account of the deceased individual and another person who was entitled to a monthly benefit on the basis of the same earnings record as the deceased individual for the month before the month in which the deceased individual died, the amount of the payment in excess of the correct amount will be an overpayment to the other person.
[34 FR 14887, Sept. 27, 1969, as amended at 44 FR 34942, June 18, 1979; 47 FR 4988, Feb. 3, 1982; 48 FR 46149, Oct. 11, 1983; 55 FR 7313, March 1, 1990]
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CODE OF FEDERAL REGULATIONS
TITLE 20--EMPLOYEES' BENEFITS
CHAPTER III--SOCIAL SECURITY ADMINISTRATION
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
SUBPART F--OVERPAYMENTS, UNDERPAYMENTS, WAIVER OF ADJUSTMENT OR RECOVERY OF OVERPAYMENTS, AND LIABILITY OF A CERTIFYING OFFICER
Current through September 7, 1999; 64 FR 48567
Upon determination that an overpayment has been made, adjustments will be made against monthly benefits and lump sums as follows:
(a) Individual overpaid is living.
(1) If the individual to whom an overpayment was made is at the time of a determination of such overpayment entitled to a monthly benefit or a lump sum under title II of the Act, or at any time thereafter becomes so entitled, no benefit for any month and no lump sum is payable to such individual, except as provided in paragraphs (c) and (d) of this section, until an amount equal to the amount of the overpayment has been withheld or refunded. Such adjustments will be made against any monthly benefit or lump sum under title II of the Act to which such individual is entitled whether payable on the basis of such individual's earnings or the earnings of another individual.
(2) If any other individual is entitled to benefits for any month on the basis of the same earnings as the overpaid individual, except as adjustment is to be effected pursuant to paragraphs (c) and (d) of this section by withholding a part of the monthly benefit of either the overpaid individual or any other individual entitled to benefits on the basis of the same earnings, no benefit for any month will be paid on such earnings to such other individual until an amount equal to the amount of the overpayment has been withheld or refunded.
(b) Individual overpaid dies before adjustment. If an overpaid individual dies before adjustment is completed under the provisions of paragraph (a) of this section, no lump sum and no subsequent monthly benefit will be paid on the basis of earnings which were the basis of the overpayment to such deceased individual until full recovery of the overpayment has been effected, except as provided in paragraphs (c) and (d) of this section or under § 404.515. Such recovery may be effected through:
(1) Payment by the estate of the deceased overpaid individual,
(2) Withholding of amounts due the estate of such individual under title II of the Act,
(3) Withholding a lump sum or monthly benefits due any other individual on the basis of the same earnings which were the basis of the overpayment to the deceased overpaid individual, or
(4) Any combination of the amount above.
(c) Adjustment by withholding part of a monthly benefit.
(1) Where it is determined that withholding the full amount each month would "defeat the purpose of title II," i.e., deprive the person of income required for ordinary and necessary living expenses (see § 404.508), adjustment under paragraphs (a) and (b) of this section may be effected by withholding an amount of not less than $10 of the monthly benefit payable to an individual.
(2) Adjustment as provided by this paragraph will not be available if the overpayment was caused by the individual's intentional false statement or representation, or willful concealment of, or deliberate failure to furnish, material information. In such cases, recovery of the overpayment will be accomplished as provided in paragraph (a) of this section.
(d) Individual overpaid enrolled under supplementary insurance plan. Notwithstanding the provisions of paragraphs (a), (b), and (c) of this section, if the individual liable for the overpayment is an enrollee under Part B of title XVIII of the Act and the overpayment was not caused by such individual's intentional false statement or representation, or willful concealment of, or deliberate failure to furnish, material information, an amount of such individual's monthly benefit which is equal to his obligation for supplementary medical insurance premiums will be applied toward payment of such premiums, and the balance of the monthly benefit will be applied toward recovery of the overpayment. Further adjustment with respect to such balance may be made if the enrollee so requests and meets the conditions of paragraph (c) of this section.
[35 FR 5943, Apr. 10, 1970, as amended at 43 FR 31318, July 21, 1978; 44 FR 20653, Apr. 6, 1979]
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CODE OF FEDERAL REGULATIONS
TITLE 20--EMPLOYEES' BENEFITS
CHAPTER III--SOCIAL SECURITY ADMINISTRATION
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
SUBPART F--OVERPAYMENTS, UNDERPAYMENTS, WAIVER OF ADJUSTMENT OR RECOVERY OF OVERPAYMENTS, AND LIABILITY OF A CERTIFYING OFFICER
Current through September 7, 1999; 64 FR 48567
Whenever an initial determination is made that more than the correct amount of payment has been made, and we seek adjustment or recovery of the overpayment, the individual from whom we are seeking adjustment or recovery is immediately notified. The notice includes:
(a) The overpayment amount and how and when it occurred;
(b) A request for full, immediate refund, unless the overpayment can be withheld from the next month's benefit;
(c) The proposed adjustment of benefits if refund is not received within 30 days after the date of the notice and adjustment of benefits is available;
(d) An explanation of the availability of a different rate of withholding when full withholding is proposed, installment payments when refund is requested and adjustment is not currently available, and/or cross-program recovery when refund is requested and the individual is receiving another type of payment from SSA (language about cross-program recovery is not included in notices sent to individuals in jurisdictions where this recovery option is not available);
(e) An explanation of the right to request waiver of adjustment or recovery and the automatic scheduling of a file review and pre-recoupment hearing (commonly referred to as a personal conference) if a request for waiver cannot be approved after initial paper review;
(f) An explanation of the right to request reconsideration of the fact and/or amount of the overpayment determination;
(g) Instructions about the availability of forms for requesting reconsideration and waiver;
(h) An explanation that if the individual does not request waiver or reconsideration within 30 days of the date of the overpayment notice, adjustment or recovery of the overpayment will begin;
(i) A statement that an SSA office will help the individual complete and submit forms for appeal or waiver requests; and
(j) A statement that the individual receiving the notice should notify SSA promptly if reconsideration, waiver, a lesser rate of withholding, repayment by installments or cross-program adjustment is wanted.
[37 FR 10554, May 25, 1972; 61 FR 56131, Oct. 31, 1996]
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CODE OF FEDERAL REGULATIONS
TITLE 20--EMPLOYEES' BENEFITS
CHAPTER III--SOCIAL SECURITY ADMINISTRATION
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
SUBPART F--OVERPAYMENTS, UNDERPAYMENTS, WAIVER OF ADJUSTMENT OR RECOVERY OF OVERPAYMENTS, AND LIABILITY OF A CERTIFYING OFFICER
Current through September 7, 1999; 64 FR 48567
The amount of an overpayment or underpayment is the difference between the amount paid to the beneficiary and the amount of the payment to which the beneficiary was actually entitled. Such payment, for example, would be equal to the difference between the amount of a benefit in fact paid to the beneficiary and the amount of such benefit as reduced under section 202(j)(1), 202(k)(3), 203(a), or 224(a), or as increased under section 202(d)(2), 202(m), or 215(f) and (g). In effecting an adjustment with respect to an overpayment, no amount can be considered as having been withheld from a particular benefit which is in excess of the amount of such benefit as so decreased.
[34 FR 14888, Sept. 27, 1969]
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CODE OF FEDERAL REGULATIONS
TITLE 20--EMPLOYEES' BENEFITS
CHAPTER III--SOCIAL SECURITY ADMINISTRATION
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
SUBPART F--OVERPAYMENTS, UNDERPAYMENTS, WAIVER OF ADJUSTMENT OR RECOVERY OF OVERPAYMENTS, AND LIABILITY OF A CERTIFYING OFFICER
Current through September 7, 1999; 64 FR 48567
(a) Section 204(b) of the Act provides that there shall be no adjustment or recovery in any case where an overpayment under title II has been made to an individual who is without fault if adjustment or recovery would either defeat the purpose of title II of the Act, or be against equity and good conscience.
(b) If an individual requests waiver of adjustment or recovery of a title II overpayment within 30 days after receiving a notice of overpayment that contains the information in § 404.502a, no adjustment or recovery action will be taken until after the initial waiver determination is made. If the individual requests waiver more than 30 days after receiving the notice of overpayment, SSA will stop any adjustment or recovery actions until after the initial waiver determination is made.
(c) When waiver is requested, the individual gives SSA information to support his/her contention that he/she is without fault in causing the overpayment (see § 404.507) and that adjustment or recovery would either defeat the purpose of title II of the Act (see § 404.508) or be against equity and good conscience (see § 404.509). That information, along with supporting documentation, is reviewed to determine if waiver can be approved. If waiver cannot be approved after this review, the individual is notified in writing and given the dates, times and place of the file review and personal conference; the procedure for reviewing the claims file prior to the personal conference; the procedure for seeking a change in the scheduled dates, times, and/or place; and all other information necessary to fully inform the individual about the personal conference. The file review is always scheduled at least 5 days before the personal conference.
(d) At the file review, the individual and the individual's representative have the right to review the claims file and applicable law and regulations with the decisionmaker or another SSA representative who is prepared to answer questions. We will provide copies of material related to the overpayment and/or waiver from the claims file or pertinent sections of the law or regulations that are requested by the individual or the individual's representative.
(e) At the personal conference, the individual is given the opportunity to:
(1) Appear personally, testify, cross-examine any witnesses, and make arguments;
(2) Be represented by an attorney or other representative (see § 404.1700), although the individual must be present at the conference; and
(3) Submit documents for consideration by the decisionmaker.
(f) At the personal conference, the decisionmaker:
(1) Tells the individual that the decisionmaker was not previously involved in the issue under review, that the waiver decision is solely the decisionmaker's, and that the waiver decision is based only on the evidence or information presented or reviewed at the conference;
(2) Ascertains the role and identity of everyone present;
(3) Indicates whether or not the individual reviewed the claims file;
(4) Explains the provisions of law and regulations applicable to the issue;
(5) Briefly summarizes the evidence already in file which will be considered;
(6) Ascertains from the individual whether the information presented is correct and whether he/she fully understands it;
(7) Allows the individual and the individual's representative, if any, to present the individual's case;
(8) Secures updated financial information and verification, if necessary;
(9) Allows each witness to present information and allows the individual and the individual's representative to question each witness;
(10) Ascertains whether there is any further evidence to be presented;
(11) Reminds the individual of any evidence promised by the individual which has not been presented;
(12) Lets the individual and the individual's representative, if any, present any proposed summary or closing statement;
(13) Explains that a decision will be made and the individual will be notified in writing; and
(14) Explains repayment options and further appeal rights in the event the decision is adverse to the individual.
(g) SSA issues a written decision to the individual (and his/her representative, if any) specifying the findings of fact and conclusions in support of the decision to approve or deny waiver and advising of the individual's right to appeal the decision. If waiver is denied, adjustment or recovery of the overpayment begins even if the individual appeals.
(h) If it appears that the waiver cannot be approved, and the individual declines a personal conference or fails to appear for a second scheduled personal conference, a decision regarding the waiver will be made based on the written evidence of record. Reconsideration is then the next step in the appeals process (but see § 404.930(a)(7)).
[32 FR 18026, Dec. 16, 1967; 61 FR 56131, Oct. 31, 1996]
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CODE OF FEDERAL REGULATIONS
TITLE 20--EMPLOYEES' BENEFITS
CHAPTER III--SOCIAL SECURITY ADMINISTRATION
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
SUBPART F--OVERPAYMENTS, UNDERPAYMENTS, WAIVER OF ADJUSTMENT OR RECOVERY OF OVERPAYMENTS, AND LIABILITY OF A CERTIFYING OFFICER
Current through September 7, 1999; 64 FR 48567
"Fault" as used in "without fault" (see § 404.506 and > 42 CFR 405.355) applies only to the individual. Although the Administration may have been at fault in making the overpayment, that fact does not relieve the overpaid individual or any other individual from whom the Administration seeks to recover the overpayment from liability for repayment if such individual is not without fault. In determining whether an individual is at fault, the Social Security Administration will consider all pertinent circumstances, including the individual's age and intelligence, and any physical, mental, educational, or linguistic limitations (including any lack of facility with the English language) the individual has. What constitutes fault (except for "deduction overpayments"--see § 404.510) on the part of the overpaid individual or on the part of any other individual from whom the Administration seeks to recover the overpayment depends upon whether the facts show that the incorrect payment to the individual or to a provider of services or other person, or an incorrect payment made under section 1814(e) of the Act, resulted from:
(a) An incorrect statement made by the individual which he knew or should have known to be incorrect; or
(b) Failure to furnish information which he knew or should have known to be material; or
(c) With respect to the overpaid individual only, acceptance of a payment which he either knew or could have been expected to know was incorrect.
[34 FR 14888, Sept. 27, 1969; 34 FR 15646, Oct. 9, 1969; as amended at 44 FR 34942, June 18, 1979; 59 FR 1634, Jan. 12, 1994]
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CODE OF FEDERAL REGULATIONS
TITLE 20--EMPLOYEES' BENEFITS
CHAPTER III--SOCIAL SECURITY ADMINISTRATION
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
SUBPART F--OVERPAYMENTS, UNDERPAYMENTS, WAIVER OF ADJUSTMENT OR RECOVERY OF OVERPAYMENTS, AND LIABILITY OF A CERTIFYING OFFICER
Current through September 7, 1999; 64 FR 48567
(a) General. "Defeat the purpose of title II," for purposes of this subpart, means defeat the purpose of benefits under this title, i.e., to deprive a person of income required for ordinary and necessary living expenses. This depends upon whether the person has an income or financial resources sufficient for more than ordinary and necessary needs, or is dependent upon all of his current benefits for such needs. An individual's ordinary and necessary expenses include:
(1) Fixed living expenses, such as food and clothing, rent, mortgage payments, utilities, maintenance, insurance (e.g., life, accident, and health insurance including premiums for supplementary medical insurance benefits under title XVIII), taxes, installment payments, etc.;
(2) Medical, hospitalization, and other similar expenses;
(3) Expenses for the support of others for whom the individual is legally responsible; and
(4) Other miscellaneous expenses which may reasonably be considered as part of the individual's standard of living.
(b) When adjustment or recovery will defeat the purpose of title II. Adjustment or recovery will defeat the purposes of title II in (but is not limited to) situations where the person from whom recovery is sought needs substantially all of his current income (including social security monthly benefits) to meet current ordinary and necessary living expenses.
[32 FR 18026, Dec. 16, 1967, as amended at 34 FR 14888, Sept. 27, 1969]
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CODE OF FEDERAL REGULATIONS
TITLE 20--EMPLOYEES' BENEFITS
CHAPTER III--SOCIAL SECURITY ADMINISTRATION
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
SUBPART F--OVERPAYMENTS, UNDERPAYMENTS, WAIVER OF ADJUSTMENT OR RECOVERY OF OVERPAYMENTS, AND LIABILITY OF A CERTIFYING OFFICER
Current through September 7, 1999; 64 FR 48567
(a) Recovery of an overpayment is "against equity and good conscience" (under title II and title XVIII) if an individual--
(1) Changed his or her position for the worse (Example 1) or relinquished a valuable right (Example 2) because of reliance upon a notice that a payment would be made or because of the overpayment itself; or
(2) Was living in a separate household from the overpaid person at the time of the overpayment and did not receive the overpayment (Examples 3 and 4).
(b) The individual's financial circumstances are not material to a finding of "against equity and good conscience."
Example 1. A widow, having been awarded benefits for herself and daughter, entered her daughter in private school because the monthly benefits made this possible. After the widow and her daughter received payments for almost a year, the deceased worker was found to be not insured and all payments to the widow and child were incorrect. The widow has no other funds with which to pay the daughter's private school expenses. Having entered the daughter in private school and thus incurred a financial obligation toward which the benefits had been applied, she was in a worse position financially than if she and her daughter had never been entitled to benefits. In this situation, the recovery of the payments would be "against equity and good conscience."
Example 2. After being awarded old-age insurance benefits, an individual resigned from employment on the assumption he would receive regular monthly benefit payments. It was discovered 3 years later that (due to a Social Security Administration error) his award was erroneous because he did not have the required insured status. Due to his age, the individual was unable to get his job back and could not get any other employment. In this situation, recovery of the overpayments would be "against equity and good conscience" because the individual gave up a valuable right.
Example 3. M divorced K and married L. M died a few years later. When K files for benefits as a surviving divorced wife, she learns that L had been overpaid $3,200 on M's earnings record. Because K and L are both entitled to benefits on M's record of earnings and we could not recover the overpayment from L, we sought recovery from K. K was living in a separate household from L at the time of the overpayment and did not receive the overpayment. K requests waiver of recovery of the $3,200 overpayment from benefits due her as a surviving divorced wife of M. In this situation, it would be "against equity and good conscience" to recover the overpayment from K.
Example 4. G filed for and was awarded benefits. His daughter, T, also filed for student benefits on G's earnings record. Since T was an independent, full-time student living in another State, she filed for benefits on her own behalf. Later, after T received 12 monthly benefits, the school reported that T had been a full-time student only 2 months and had withdrawn from school. Since T was overpaid 10 monthly benefits, she was requested to return the overpayment to SSA. T did not return the overpayment and further attempts to collect the overpayment were unsuccessful. G was asked to repay the overpayment because he was receiving benefits on the same earnings record. G requested waiver. To support his waiver request G established that he was not at fault in causing the overpayment because he did not know that T was receiving benefits. Since G is without fault and, in addition, meets the requirements of not living in the same household at the time of the overpayment and did not receive the overpayment, it would be "against equity and good conscience" to recover the overpayment from G.
[27 FR 1162, Feb. 8, 1962, as amended at 28 FR 14492, Dec. 31, 1963; 32 FR 18026, Dec. 16, 1967; 43 FR 31318, July 21, 1978; 44 FR 20653, Apr. 6, 1979; 53 FR 25483, July 7, 1988]
=======================================================
CODE OF FEDERAL REGULATIONS
TITLE 20--EMPLOYEES' BENEFITS
CHAPTER III--SOCIAL SECURITY ADMINISTRATION
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
SUBPART F--OVERPAYMENTS, UNDERPAYMENTS, WAIVER OF ADJUSTMENT OR RECOVERY OF OVERPAYMENTS, AND LIABILITY OF A CERTIFYING OFFICER
Current through September 7, 1999; 64 FR 48567
A benefit payment under title II or title XVIII of the Act to or on behalf of an individual who fails to meet one or more requirements for entitlement to such payment or a benefit payment exceeding the amount to which he is entitled, constitutes an entitlement overpayment. Where an individual or other person on behalf of an individual accepts such overpayment because of reliance on erroneous information from an official source within the Social Security Administration (or other governmental agency which the individual had reasonable cause to believe was connected with the administration of benefits under title II or title XVIII of the Act) with respect to the interpretation of a pertinent provision of the Social Security Act or regulations pertaining thereto, or where an individual or other person on behalf of an individual is overpaid as a result of the adjustment upward (under the family maximum provision in section 203 of the Act) of the benefits of such individual at the time of the proper termination of one or more beneficiaries on the same social security record and the subsequent reduction of the benefits of such individual caused by the reentitlement of the terminated beneficiary(ies) pursuant to a change in a provision of the law, such individual, in accepting such overpayment, will be deemed to be "without fault." For purposes of this section "governmental agency" includes intermediaries and carriers under contract pursuant to sections 1816 and 1842 of the Act.
[39 FR 43716, Dec. 18, 1974]
======================================================
CODE OF FEDERAL REGULATIONS
TITLE 20--EMPLOYEES' BENEFITS
CHAPTER III--SOCIAL SECURITY ADMINISTRATION
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
SUBPART F--OVERPAYMENTS, UNDERPAYMENTS, WAIVER OF ADJUSTMENT OR RECOVERY OF OVERPAYMENTS, AND LIABILITY OF A CERTIFYING OFFICER
Current through September 7, 1999; 64 FR 48567
(a) Degree of care. An individual will not be "without fault" if the Administration has evidence in its possession which shows either a lack of good faith or failure to exercise a high degree of care in determining whether circumstances which may cause deductions from his benefits should be brought to the attention of the Administration by an immediate report or by return of a benefit check. The high degree of care expected of an individual may vary with the complexity of the circumstances giving rise to the overpayment and the capacity of the particular payee to realize that he is being overpaid. Accordingly, variances in the personal circumstances and situations of individual payees are to be considered in determining whether the necessary degree of care has been exercised by an individual to warrant a finding that he was without fault in accepting a "deduction overpayment."
(b) Subsequent deduction overpayments. The Social Security Administration generally will not find an individual to be without fault where, after having been exonerated for a "deduction overpayment" and after having been advised of the correct interpretation of the deduction provision, the individual incurs another "deduction overpayment" under the same circumstances as the first overpayment. However, in determining whether the individual is without fault, the Social Security Administration will consider all of the pertinent circumstances surrounding the prior and subsequent "deduction overpayments," including any physical, mental, educational, or linguistic limitations (including any lack of facility with the English language) which the individual may have.
[16 FR 13054, Dec. 28, 1951; 59 FR 1634, Jan. 12, 1994]
======================================================
CODE OF FEDERAL REGULATIONS
TITLE 20--EMPLOYEES' BENEFITS
CHAPTER III--SOCIAL SECURITY ADMINISTRATION
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
SUBPART F--OVERPAYMENTS, UNDERPAYMENTS, WAIVER OF ADJUSTMENT OR RECOVERY OF OVERPAYMENTS, AND LIABILITY OF A CERTIFYING OFFICER
Current through September 7, 1999; 64 FR 48567
(a) Adjustment or recovery deemed "against equity and good conscience." In the situations described in §§ 404.510(a), (b), and (c), and 404.510a, adjustment or recovery will be waived since it will be deemed such adjustment or recovery is "against equity and good conscience." Adjustment or recovery will also be deemed "against equity and good conscience" in the situation described in § 404.510(e), but only as to a month in which the individual's earnings from wages do not exceed the total monthly benefits affected for that month.
(b) Adjustment or recovery considered to "defeat the purpose of title II" or be "against equity and good conscience" under certain circumstances. In the situation described in § 404.510(e)(except in the case of an individual whose monthly earnings from wages in employment do not exceed the total monthly benefits affected for a particular month), and in the situations described in § 404.510(f) through (n), adjustment or recovery shall be waived only where the evidence establishes that adjustment or recovery would work a financial hardship (see § 404.508) or would otherwise be inequitable (see § 404.509).
[27 FR 1163, Feb. 8, 1962, as amended at 35 FR 6321, Apr. 18, 1970; 36 FR 23361, Dec. 9, 1971]
==========================================================
CODE OF FEDERAL REGULATIONS
TITLE 20--EMPLOYEES' BENEFITS
CHAPTER III--SOCIAL SECURITY ADMINISTRATION
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
SUBPART F--OVERPAYMENTS, UNDERPAYMENTS, WAIVER OF ADJUSTMENT OR RECOVERY OF OVERPAYMENTS, AND LIABILITY OF A CERTIFYING OFFICER
Current through September 7, 1999; 64 FR 48567
(a) General effect of the Federal Claims Collection Act of 1966. Claims by the Administration against an individual for recovery of overpayments under title II or title XVIII (not including title XVIII overpayments for which refund is requested from providers, physicians, or other suppliers of services) of the Act, not exceeding the sum of $20,000, exclusive of interest, may be compromised, or collection suspended or terminated where such individual or his estate does not have the present or prospective ability to pay the full amount of the claim within a reasonable time (see paragraph (c) of this section) or the cost of collection is likely to exceed the amount of recovery (see paragraph (d) of this section) except as provided under paragraph (b) of this section.
(b) When there will be no compromise, suspension or termination of collection of a claim for overpayment--
(1) Overpaid individual alive. In any case where the overpaid individual is alive, a claim for overpayment will not be compromised, nor will there be suspension or termination of collection of the claim by the Administration if there is an indication of fraud, the filing of a false claim, or misrepresentation on the part of such individual or on the part of any other party having an interest in the claim.
(2) Overpaid individual deceased. In any case where the overpaid individual is deceased (i) a claim for overpayment in excess of $5,000 will not be compromised, nor will there be suspension or termination of collection of the claim by the Administration if there is an indication of fraud; the filing of a false claim, or misrepresentation on the part of such deceased individual, and (ii) a claim for overpayment regardless of the amount will not be compromised, nor will there be suspension or termination of collection of the claim by the Administration if there is an indication that any person other than the deceased overpaid individual had a part in the fraudulent action which resulted in the overpayment.
(c) Inability to pay claim for recovery of overpayment. In determining whether the overpaid individual is unable to pay a claim for recovery of an overpayment under title II or title XVIII of the Act, the Administration will consider such individual's age, health, present and potential income (including inheritance prospects), assets (e.g., real property, savings account), possible concealment or improper transfer of assets, and assets or income of such individual which may be available in enforced collection proceedings. The Administration will also consider exemptions available to such individual under the pertinent State or Federal law in such proceedings. In the event the overpaid individual is deceased, the Administration will consider the available assets of the estate, taking into account any liens or superior claims against the estate.
(d) Cost of collection or litigative probabilities. Where the probable costs of recovering an overpayment under title II or title XVIII of the Act would not justify enforced collection proceedings for the full amount of the claim or there is doubt concerning the Administration's ability to establish its claim as well as the time which it will take to effect such collection, a compromise or settlement for less than the full amount will be considered.
(e) Amount of compromise. The amount to be accepted in compromise of a claim for overpayment under title II or title XVIII of the Act shall bear a reasonable relationship to the amount which can be recovered by enforced collection proceedings giving due consideration to the exemptions available to the overpaid individual under State or Federal law and the time which such collection will take.
(f) Payment. Payment of the amount which the Administration has agreed to accept as a compromise in full settlement of a claim for recovery of an overpayment under title II or title XVIII of the Act must be made within the time and in the manner set by the Administration. A claim for such recovery of the overpayment shall not be considered compromised or settled until the full payment of the compromised amount has been made within the time and manner set by the Administration. Failure of the overpaid individual or his estate to make such payment as provided shall result in reinstatement of the full amount of the overpayment less any amounts paid prior to such default.
[34 FR 14889, Sept. 27, 1969; 34 FR 15413, Oct. 3, 1969]
=======================================================
CODE OF FEDERAL REGULATIONS
TITLE 20--EMPLOYEES' BENEFITS
CHAPTER III--SOCIAL SECURITY ADMINISTRATION
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
SUBPART F--OVERPAYMENTS, UNDERPAYMENTS, WAIVER OF ADJUSTMENT OR RECOVERY OF OVERPAYMENTS, AND LIABILITY OF A CERTIFYING OFFICER
Current through September 7, 1999; 64 FR 48567
(a) The standards we will apply and the procedures we will follow before requesting the Department of the Treasury to offset income tax refunds due taxpayers who have an outstanding overpayment are set forth in §§ 404.520 through 404.526. These standards and procedures are authorized by > 31 U.S.C. 3720A and are implemented through Department of the Treasury regulations at > 31 CFR 285.2.
(b) We will use the Department of the Treasury tax refund offset procedure to collect overpayments that are certain in amount, past due and legally enforceable, and eligible for tax refund offset under regulations issued by the Department of the Treasury. We will use these procedures to collect overpayments only from individuals who are not currently entitled to monthly Social Security benefits under title II of the Act. We will refer an overpayment to the Department of the Treasury for offset against tax refunds no later than 10 years after our right to collect the overpayment first accrued.
[56 FR 52468, Oct. 21, 1991; 62 FR 38450, July 18, 1997; 62 FR 64277, Dec. 5, 1997]
=========================================================
CODE OF FEDERAL REGULATIONS
TITLE 20--EMPLOYEES' BENEFITS
CHAPTER III--SOCIAL SECURITY ADMINISTRATION
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
SUBPART F--OVERPAYMENTS, UNDERPAYMENTS, WAIVER OF ADJUSTMENT OR RECOVERY OF OVERPAYMENTS, AND LIABILITY OF A CERTIFYING OFFICER
Current through September 7, 1999; 64 FR 48567
A request for reduction of a Federal income tax refund will be made only after we determine that an amount is owed and past due and send the overpaid individual written notice. Our notice of intent to collect an overpayment through tax refund offset will state:
(a) The amount of the overpayment;
(b) That unless, within 60 calendar days from the date of our notice, the overpaid individual repays the overpayment, sends evidence to us at the address given in our notice that the overpayment is not past due or not legally enforceable, or asks us to waive collection of the overpayment under section 204(b) of the Act, we intend to seek collection of the overpayment by requesting that the Department of the Treasury reduce any amounts payable to the overpaid individual as refunds of Federal income taxes by an amount equal to the amount of the overpayment;
(c) The conditions under which we will waive recovery of an overpayment under section 204(b) of the Act;
(d) That we will review any evidence presented that the overpayment is not past due or not legally enforceable;
(e) That the overpaid individual has the right to inspect and copy our records related to the overpayment as determined by us and will be informed as to where and when the inspection and copying can be done after we receive notice from the overpaid individual that inspection and copying are requested.
[56 FR 52468, Oct. 21, 1991; 62 FR 64278, Dec. 5, 1997]
========================================================
CODE OF FEDERAL REGULATIONS
TITLE 20--EMPLOYEES' BENEFITS
CHAPTER III--SOCIAL SECURITY ADMINISTRATION
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
SUBPART F--OVERPAYMENTS, UNDERPAYMENTS, WAIVER OF ADJUSTMENT OR RECOVERY OF OVERPAYMENTS, AND LIABILITY OF A CERTIFYING OFFICER
Current through September 7, 1999; 64 FR 48567
(a) Notification by overpaid individual. An overpaid individual who receives a notice as described in § 404.521 has the right to present evidence that all or part of the overpayment is not past due or not legally enforceable. To exercise this right, the individual must notify us and present evidence regarding the overpayment within 60 calendar days from the date of our notice.
(b) Submission of evidence. The overpaid individual may submit evidence showing that all or part of the debt is not past due or not legally enforceable as provided in paragraph (a) of this section. Failure to submit the notification and evidence within 60 calendar days will result in referral of the overpayment to the Department of the Treasury, unless the overpaid individual, within this 60-day time period, has asked us to waive collection of the overpayment under section 204(b) of the Act and we have not yet determined whether we can grant the waiver request. If the overpaid individual asks us to waive collection of the overpayment, we may ask that evidence to support the request be submitted to us.
(c) Review of the evidence. After a timely submission of evidence by the overpaid individual, we will consider all available evidence related to the overpayment. If the overpaid individual has not requested a waiver we will make findings based on a review of the written record, unless we determine that the question of indebtedness cannot be resolved by a review of the documentary evidence. If the overpaid individual has asked us to make a waiver determination and our records do not show that after an oral hearing we had previously determined that he was at "fault" in accepting the overpayment, we will not deny the waiver request without first scheduling an oral hearing.
[56 FR 52469, Oct. 21, 1991; 62 FR 64278, Dec. 5, 1997]
=========================================================
CODE OF FEDERAL REGULATIONS
TITLE 20--EMPLOYEES' BENEFITS
CHAPTER III--SOCIAL SECURITY ADMINISTRATION
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
SUBPART F--OVERPAYMENTS, UNDERPAYMENTS, WAIVER OF ADJUSTMENT OR RECOVERY OF OVERPAYMENTS, AND LIABILITY OF A CERTIFYING OFFICER
Current through September 7, 1999; 64 FR 48567
(a) Following the hearing or a review of the record, we will issue written findings which include supporting rationale for the findings. Issuance of these findings concerning whether the overpayment or part of the overpayment is past due and legally enforceable is the final Agency action with respect to the past-due status and enforceability of the overpayment. If we make a determination that a waiver request cannot be granted, we will issue a written notice of this determination in accordance with the regulations in subpart J of this part. Our referral of the overpayment to the Department of the Treasury will not be suspended under § 404.525 pending any further administrative review of the waiver request that the individual may seek.
(b) Copies of the findings described in paragraph (a) of this section will be distributed to the overpaid individual and the overpaid individual's attorney or other representative, if any.
(c) If the findings referred to in paragraph (a) of this section affirm that all or part of the overpayment is past due and legally enforceable and, if waiver is requested, we determine that the request cannot be granted, we will refer the overpayment to the Department of the Treasury. No referral will be made to the Department of the Treasury if, based on our review of the overpayment, we reverse our prior finding that the overpayment is past due and legally enforceable or, upon consideration of a waiver request, we determine that waiver of our collection of the overpayment is appropriate.
[56 FR 52469, Oct. 21, 1991; 62 FR 64278, Dec. 5, 1997]
====================================================
Social Security Ruling
1994
TITLE II OF THE SOCIAL SECURITY ACT AND TITLE IV OF THE FEDERAL MINE SAFETY AND HEALTH ACT OF 1977: WAIVER OF RECOVERY OF OVERPAYMENTS
POLICY INTERPRETATION RULING
Purpose: To state the longstanding Social Security Administration (SSA) policy of:
-> Giving adequate written notice of a determination of overpayment and the right to contest such determination and request waiver of recovery of the overpayment; and
-> Providing the person from whom we are seeking recovery of an overpayment with the opportunity for a face-to-face oral hearing before we deny a request for waiver of recovery of the overpayment.
The policy is based on the court decisions and orders discussed below.
Citations (Authority): Section 204(a) and (b) of the Social Security Act, as amended, and Title IV of the Federal Mine Safety and Health Act of 1977; > 20 CFR sections 404.502a, > 404.506, 404.904, 410.561, 410.561a, and 410.620.
Pertinent History: On October 22, 1974, the U.S. District Court for the Western District of Washington in Buffington et al. v. Weinberger, No. 734-73C2 (W.D.Wash. October 22, 1974) stopped SSA from recovering overpaid Social Security benefits without giving each member of the plaintiff class adequate written notice of the overpayment determination, the right to contest such determination and the right to a pre-recoupment hearing. Moreover, the court stopped SSA from taking any action to recover the overpayments before affording the class member the opportunity for a hearing.
The court ordered that the written notice must include:
-> A statement of the alleged overpayment, an explanation of the basis for the overpayment and SSA's proposed action to recover the overpayment;
-> A statement of the individual's right to a pre-recoupment hearing;
-> Instructions and forms for requesting a pre-recoupment hearing;
-> An explanation that if the person did not request a pre-recoupment hearing within 30 days of the date of mailing of the overpayment notice, it would be presumed that the person waived his/her right to the hearing and recovery of the alleged overpayment would begin;
-> A statement of any other administrative relief available (i.e., reconsideration of the fact and/or amount of overpayment and waiver of recovery of the overpayment); and
-> A statement that the local SSA office would help him/her to complete and submit forms for appeal.
The court also ordered the following:
1. SSA had to restore all benefits withheld from the named plaintiffs pending an opportunity for a pre-recoupment hearing. The person had to be given the opportunity to examine his/her claims file at least 5 days prior to the date of the hearing.
2. The pre-recoupment hearing had to be conducted by an SSA employee who had no prior knowledge of the events leading to the overpayment determination and the decision to recover the overpayment. At the hearing the person requesting waiver had to be given the opportunity to:
-> Personally appear, testify, and cross-examine any witnesses;
-> Be represented by an attorney or other representative; and
-> Submit documents for consideration at the hearing.
The court, however, did not require that a transcript be made of the hearing.
3. After the hearing, SSA had to issue a written decision to the individual (and his/her representative, if any) specifying the findings of fact and conclusions in support of the decision to approve or deny waiver and advising of the individual's right to appeal the decision.
In accordance with the court order, SSA began to issue overpayment notices containing all of the aforementioned information and to offer pre-recoupment hearings to all class members.
On June 20, 1979, the Supreme Court held in > Califano v. Yamasaki, 442 U.S. 682 (1979), that individuals who filed a written request for waiver were entitled to the opportunity for a pre-recoupment oral hearing, but those who requested only reconsideration were not so entitled. Thereafter, SSA applied its revised overpayment notice and pre-recoupment hearing procedures to all individuals who are determined to be overpaid under the title II or Black Lung programs.
On July 31, 1981, the court in Buffington, et al. v. Schweiker, No 734-73C2 (W.D.Wash.) required SSA to automatically schedule pre-recoupment hearings for persons whose request for waiver of overpayment recovery could not be approved after initial paper review. On February 10, 1983, the court in Buffington, et al. v. Schweiker, No 734-73C2 (W.D.Wash.) approved procedures developed by SSA in response to the 1981 decree whereby pre-recoupment hearings would be automatically scheduled provided that the scheduling would be in writing. The scheduling letter had to contain all the necessary information about the date, time, and place of the hearing; the procedure for reviewing the file prior to the hearing; the procedure for seeking a change in the scheduled date, time, or place; and all other information necessary to fully inform the claimant about the pre-recoupment hearing. SSA began to automatically schedule pre-recoupment hearings in writing in April 1983.
In its order of October 19, 1987, the court in Buffington, et al. v. Bowen, No. 734-73C2 (W.D.Wash.) approved SSA's plan to transfer waiver decisionmaking authority from the processing centers to the field offices for Retirement and Survivors Insurance overpayments. SSA implemented this change in July 1988.
Policy Interpretation:
Overpayment Notice
In accordance with the court decisions, when an overpayment is discovered, the person is immediately notified. The notice includes:
-> The overpayment amount and how and when it occurred;
-> A request for full, immediate refund, unless the overpayment can be withheld from the next month's benefit;
-> The proposed adjustment of benefits if refund is not received within 30 days after the date of the notice and adjustment of benefits is available;
-> An explanation of the availability of a different rate of withholding when full withholding is proposed, installment payments when refund is requested and adjustment is not currently available, and/or cross-program recovery when refund is requested and the person is receiving another type of benefit from SSA (cross-program recovery is not available to residents of New York and Pennsylvania);
-> An explanation of the right to request waiver of recovery and the automatic scheduling of a folder review and pre-recoupment hearing (commonly referred to as a personal conference) if a request for waiver cannot be approved after initial paper review;
-> Instructions about the availability of forms for requesting reconsideration and waiver;
-> An explanation that if the person does not request waiver or reconsideration within 30 days of the date of the overpayment notice, recovery of the overpayment will begin;
-> An explanation of the right to request reconsideration of the overpayment determination;
-> A statement that the local SSA office will help him/her to complete and submit forms for appeal; and
-> An explanation that the person receiving the notice should notify SSA promptly if reconsideration, waiver, a lesser rate of withholding, repayment by installments, or cross-program adjustment is wanted.
Form SSA-3105
Form SSA-3105 (Important Information About Your Appeal and Waiver Rights) is included with each overpayment notice. The SSA-3105 further explains the pre-recoupment review process and contains a tear-off form which the person may complete and return to SSA if he/she wants reconsideration and/or waiver.
Delaying Recovery of the Overpayment
To ensure meaningful opportunity to contest the correctness of an overpayment determination and/or establish entitlement to waiver, the date on which full refund is due and, if appropriate, the date on which adjustment will begin must be at least 30 days after the date of the overpayment notice. If the individual responds within 30 days after the date of the overpayment notice, SSA must take action to ensure that benefit payments are not interrupted. If the 30-day period cannot be assured, SSA must postpone any proposed recoupment for a longer period. Anytime waiver is requested, SSA stops recovery.
Requesting Waiver
When waiver is requested, the individual gives SSA information (usually on Form SSA-632-BK (Request for Waiver of Overpayment Recovery or Change in Repayment Rate)) to support his/her contention that he/she is without fault in causing the overpayment and that recovery would either cause financial hardship or be inequitable. That information, along with supporting documentation, is reviewed to determine if waiver can be approved.
Reviewing Waiver Request
In Retirement and Survivors Insurance overpayments, the waiver request is reviewed in the field office; in Disability Insurance overpayments, it is reviewed in the processing center. If waiver cannot be approved after review of the claims folder, the person is notified in writing and given necessary information about the dates, times, and place of the folder review and personal conference; the procedure for reviewing the claims folder prior to the personal conference; the procedure for seeking a change in the scheduled dates, times, or place; and all other information necessary to fully inform the person about the personal conference. The folder review is always scheduled at least 5 days before the personal conference.
Folder Review
At the folder review, the person and/or the person's representative has the right to review the claims folder and applicable law and regulations with the decisionmaker or another SSA representative who is prepared to answer questions. The individual can get copies of any requested material from the claims folder or pertinent sections of the law or regulations.
Personal Conference
At the personal conference, the person is given the opportunity to:
-> Personally appear, testify, cross-examine any witnesses, and make arguments;
-> Be represented by an attorney or other representative; and
-> Submit documents for consideration by the decisionmaker.
The decisionmaker:
-> Tells the person that the decisionmaker was not previously involved in the issue under review, that the waiver decision is solely the decisionmaker's, and that the waiver decision is based only on the evidence or information presented or reviewed at the conference;
-> Ascertains the role and identity of everyone present;
-> Indicates whether or not the person reviewed the claims file;
-> Explains the provisions of law and regulations applicable to the issue;
-> Briefly summarizes the evidence already in file which will be considered;
-> Ascertains from the person whether the information presented is correct and whether he/she fully understands it;
-> Allows the person and the person's representative, if any, to present the person's case;
-> Secures updated financial information, if necessary;
-> Allows each witness to present information and allows the person and the person's representative, if any, to question the witness;
-> Ascertains whether there is any further evidence to be presented;
-> Reminds the person of any evidence promised by the person which has not been presented;
-> Lets the person and the person's representative, if any, present any final summary or closing statement;
-> Explains that a decision will be made and the person will be notified in writing; and
-> Explains further appeal rights in the event the decision is adverse to the person.
Personal Conference Decision
SSA issues a written decision to the individual (and his/her representative, if any) specifying the findings of fact and conclusions in support of the decision to approve or deny waiver and advising of the individual's right to appeal the decision.
Effective Date: This Ruling is effective upon publication in the Federal Register.
Cross References: Program Operations Manual System, Part 02, Chapter 022, Subchapter 01, Sections 009, 011, 021, and 023; Subchapter 50, Sections 301, 302, 370, and 390; Subchapter 70, Sections 003-017; SSR > 79-30c, Recovery of Overpayment--Prerecoupment Oral Hearings.
Social Security Administration
Department of Health and Human Services
=====================================
Acquiescence Ruling
June 22, 1992
Quinlivan v. Sullivan, > 916 F.2d 524 (9th Cir.1990)
ISSUE: Whether the Secretary may find that recovery of an overpayment is "against equity and good conscience" only under the specific circumstances set forth in the regulations.
STATUTE/REGULATION/RULING CITATION: Sections 204(b) and 1631(b)(1)(B) of the Social Security Act (> 42 U.S.C. 404(b) and 1383(b)(1)(B)), > 20 CFR 404.506, 404.509, 410.561a, 410.561d, 416.550, and 416.554; Section 413(b) of the Federal Mine Safety and Health Act of 1977 (> 30 U.S.C. 923(b)).
CIRCUIT:
Ninth (Alaska, Arizona, California, Guam, Hawaii (including American Samoa), Idaho, Montana, Nevada, Northern Mariana Islands, Oregon, Washington)
Quinlivan v. Sullivan, > 916 F.2d 524 (9th Cir.1990)
APPLICABILITY OF RULING: This Ruling applies to determinations or decisions at all administrative levels (i.e., initial, reconsideration, administrative law judge hearing and Appeals Council).
DESCRIPTION OF CASE: The plaintiff, Mr. Quinlivan, was incarcerated from 1963 to 1985 for a felony conviction. He received disability insurance benefits while in prison.
In 1980, the Social Security Act was amended to prohibit payment of disability benefits to certain incarcerated felons, Mr. Quinlivan continued to be paid benefits from 1980 to 1982, resulting in erroneous payments. He was unaware of the change in the law and was without fault in receiving these payments.
After receiving a booklet from the Social Security Administration (SSA) in early 1982, Mr. Quinlivan wrote a letter to SSA informing it of his situation. SSA then sent him a notice stating that he had been overpaid for two years and requested repayment. He requested reconsideration and a waiver of recovery of the overpayment. Apparently this request was not processed and another notice of overpayment was sent in 1984. The plaintiff again sought waiver of recovery of the overpayment. A personal conference with an SSA representative was held in 1984, but no decision was issued at that time.
Mr. Quinlivan was released from prison in 1985. He spent his accumulated savings, including the overpayment. In 1987, SSA denied his request for reconsideration and Mr. Quinlivan thereafter requested a hearing. In 1988, an Administrative Law Judge denied the request for waiver of the recovery of the overpayment and this decision became the final decision of the Secretary when the Appeals Council denied review. Mr. Quinlivan then sought judicial review in the district court. The district court affirmed the Secretary's decision and Mr. Quinlivan filed an appeal with the United States Court of Appeals for the Ninth Circuit.
HOLDING: The Ninth Circuit Court of Appeals held that requiring Mr. Quinlivan to repay the overpayment would be against equity and good conscience.
The court indicated that although the Social Security Act does not define the phrase "against equity and good conscience," the Secretary has interpreted it in > 20 CFR 404.509(a) to be limited to situations where the claimant changed his or her position for the worse, relinquished a valuable right, or lived in a separate household from the overpaid person at the time of the overpayment and did not receive the overpayment. In making its decision on this case, the court stated that the question before it was "whether the agency's interpretation is based on a reasonable construction of the statute."
The court held that the legislative history of section 204(b) of the Social Security Act demonstrates that Congress intended to broaden the availability of waiver and that the Secretary's interpretation of the phrase "against equity and good conscience" was too narrow. Accordingly, the court concluded that:
[T]he meaning of the phrase, "against equity and good conscience," cannot be limited to the three narrow definitions set forth in the Secretary's regulation. Congress intended a broad concept of fairness to apply to waiver requests, one that reflects the ordinary meaning of the statutory language and takes into account the facts and circumtances of each case.
In applying this standard, the court noted that Mr. Quinlivan had no material goods, no means of transportation, no income and he had only worked sporadically in a few temporary jobs. Additionally, the court pointed to the presence of a psychological impairment as a factor in favor of waiver of recovery of the overpayment. Given these circumstances, the court found it would be against "equity and good conscience" to have Mr. Quinlivan repay the funds.
STATEMENT AS TO HOW QUINLIVAN DIFFERS FROM SOCIAL SECURITY POLICY: Under > 20 CFR 404.509(a), 410.561d, and 416.554, recovery of an overpayment is "against equity and good conscience" if the individual has changed his or her position for the worse or relinquished a valuable right because of reliance upon a notice that a payment would be made or because of the overpayment itself. In addition, recovery is considered to be "against equity and good conscience" under title II and title XVI, if the individual was living in a separate household from the overpaid person (title II) or his or her eligible spouse (title XVI) and did not receive the overpayment. These specific circumstances are the only ones