GN 02205.007: Joint and Several Liability for Title II Overpayment Recovery

changes
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~~Effective Dates: 12/20/2012 - Present~~
Effective Dates: 01/09/2018 - Present
TN 11 (12-12)
GN 02205.007 Joint and Several Liability for Title II Overpayment Recovery
A. Joint and several liability
Joint and several liability is the equal responsibility (shared liability) for repayment of an overpayment by two or more people. Each person also has to be independently primarily liable for the overpayment. If two or more people are jointly liable for an overpayment, then each person has full responsibility for the overpayment. This situation may arise when we pay a beneficiary’s payments to a representative payee.
B. Representative payee liability
A representative payee can also have primary liability. When the representative payee has primary liability, it means the beneficiary is not joint or severally liable. The representative payee has primary liability for repayment if he or she did not use the overpaid benefits for the support and maintenance of the beneficiary (e.g., misused funds).
If the payee conserved the overpaid benefits and he or she did not use the funds on the beneficiary, the beneficiary is not jointly liable unless he or she has access to the funds. If the beneficiary did not have access to the conserved funds and the representative payee did not use the funds on the beneficiary, the representative payee is primarily liable for the overpayment.
C. Example of representative payee liability
Mrs. Barbara Burnham is representative payee for her son Bob. She receives $142 for him each month. We learn in October 2008 that Bob married in August 2008. Therefore, Bob was not due benefits for August 2008 and September 2008 and is now overpaid $284.
We presume that Mrs. Burnham and Bob are jointly liable for repayment of the $284 overpayment. If Mrs. Burnham knew Bob had married and used the money for him, they are jointly liable for the overpayment. If Bob secretly married and Mrs. Burnham had no knowledge of the event and used the money for him, Mrs. Burnham would not be liable to repay the debt. In this instance, Bob is primarily liable for the overpayment.
If the representative payee did not use the money for Bob, Bob is not liable for repayment of the debt. In this instance, only Mrs. Burnham is primarily liable to repay the debt.
D. Determining liability for the overpayment
Presume joint and several liability when making an overpayment determination unless:
* The available facts at the time we discover the overpayment negate such a presumption; or
* The beneficiary or other jointly liable person appeals an overpayment determination, protests his or her liability, or requests waiver.
Make a formal determination of liability for repayment if there is an indication that the representative payee did not use the overpaid funds for the support and maintenance of the beneficiary.
1. Effect of the determination
If the beneficiary or representative payee requests a waiver or an appeal and, after review, there is no liability, we will approve the waiver or appeal.
2. Preparing a formal liability determination
Use an SSA-553 (Special Determination), or equivalent, for a determination that a payee or beneficiary is not liable for the overpayment:
* the field office (FO) prepares the SSA-553 when making the determination in connection with a waiver request and notifies the person.
* the Program Service Center (PSC) prepares the determination if the person questions liability but does not request waiver.
* retain a copy of the liability determination in the Claims File Records Management System (CFRMS).
* retain a copy of the liability determination in the Claims File User Interface (CFUI).
3. Misuse
When we determine misuse, only the representative payee is liable for repayment of any misused funds. For more information about misuse of benefits, see GN 00604.001.
E. Overpayment recovery
1. Representative payee and beneficiary jointly liable for the overpayment
The priority order of recovery depends on the payment status of the beneficiary. First, we will recover from the beneficiary. Afterward, we will recover from the representative payee. The PSC will post the overpayment and send the notice according to the following situations:
If…
Then…
the representative payee and the overpaid beneficiary are jointly liable and the representative payee is currently receiving benefits on behalf of the overpaid beneficiary,
* Post the overpayment to the beneficiary’s record via the Manual Adjustment, Credit, and Award Data Entry (MACADE) or Debt Management System (DMS).
* Follow normal overpayment instructions for notification and recovery of the overpayment as shown in GN 02201.009 and GN 02210.001.
* Send the representative payee the overpayment notice in NL 00703.108.
EXAMPLE: Using the scenario in GN 02205.007C, in this section, where Mrs. Burnham and Bob are jointly liable, post the overpayment to Bob’s record.
the jointly liable overpaid beneficiary has a new payee,
* Post the overpayment to the beneficiary’s record via MACADE or DMS.
* Send the beneficiary the overpayment notice in NL 00703.100.
the overpaid beneficiary is no longer receiving benefits and the representative payee is receiving benefits for some other person on the same earnings record,
* Post the overpayment to this other beneficiary’s record due to this beneficiary being contingently liable for the overpayment via MACADE or DMS. For more information about contingent liability, see GN 02205.005.
* Send the representative payee the overpayment notice in NL 00703.110.
EXAMPLE: Using the scenario in GN 02205.007C, in this section, Bob is a C1 on Mrs. Burnham’s account and no longer receiving benefits. John is a C2 on Mrs. Burnham’s account receiving benefits and Mrs. Burnham is John’s representative payee. John is contingently liable for Bob’s overpayment. Therefore, post Bob’s overpayment to John’s record. If John has a different payee, still post Bob’s overpayment to John’s record.
the representative payee is not receiving benefits for himself or herself or receiving benefits for a beneficiary that is considered contingently liable,
* Post the overpayment to the beneficiary’s record via MACADE or DMS.
* Send the representative payee the overpayment notice in NL 00703.112.
EXAMPLE: Using the same scenario in GN 02205.007C, in this section, Bob is no longer receiving benefits and Mrs. Burnham is not the payee for anyone else on Bob’s record. In addition, no one else is currently receiving benefits on Bob’s record, post the overpayment to Bob’s record.
the representative payee has questioned his or her liability or requested waiver,
Do not initiate recovery from the overpaid beneficiary until those issues are resolved (i.e., when it is determined that recovery from the representative payee is inappropriate).
2. Representative payee solely liable
If the overpaid beneficiary establishes that he or she is not liable for the overpayment or he or she meets the criteria for an approved waiver, then only the representative payee is primarily liable. The PSC will post the overpayment to the representative payee using the overpaid beneficiary’s SSN, the record where the overpayment occurred, using the BIC of “_X” (i.e., AX, CX), see SM 00610.772B.2.
Effective December 4, 2008, a representative payee (or his or her estate) is solely liable for repayment if he or she received any benefits on behalf of a deceased beneficiary after the death of the beneficiary.
F. Determining liability
Use the following table to help in determining liability:
Situation
Funds Used for Benefit Of Beneficiary
Funds Not Used For Benefit Of Beneficiary
Payee could not have reasonably been aware of the facts that created the overpayment (not at fault).
Only beneficiary is primarily liable
Only payee is primarily liable
Payee was or could have reasonably been aware of such facts (at fault).
Joint liability
Only payee is primarily liable

POMS Reference

GN 02205.007: Joint and Several Liability for Title II Overpayment Recovery