TN 16 (04-90)

A. Policy

1. General

An initial notice of overpayment should generally propose full withholding of the benefit due (excluding SMI premiums) as an alternative to full refund.

Proposing full withholding in the initial notice applies even if partial withholding (or repayment by installments) is in effect for a prior overpayment. In such case, propose full withholding for the total outstanding amount (new overpayment plus prior one). If eligibility to benefits is reestablished and there is a prior overpayment for which waiver (including personal conference) rights were offered, full (and immediate) withholding is appropriate regardless of any existing repayment schedule.

2. Exceptions

There are three exceptions to proposing full withholding:

1. The overpayment can be recovered from a single month's benefit. The notice should propose a withholding equal to the amount outstanding and not request refund.

2. An immediate full withholding of current monthly benefits is appropriate (see GN 02210.010A.1.). The notice should explain the current withholding and not request refund.

3. Adjustment is proposed against a dually entitled beneficiary who is not the overpaid person. Withholding is limitedto the amount of the benefit being received on the record on which the overpayment occurred.

B. Examples

Example 1:Nina Pauling is dually-entitled to a retirement benefit of $260.30 and a widow's benefit of $120.50. She currently receives $348.00 (MPA) after deduction for the $31.90 SMI premium. Her husband had been overpaid $2,000 before he died, and an overpayment of $1,745 is still outstanding on this record. Since Mrs. Pauling's liability is limited to the benefit she receives on the overpayment record (GN 02205.001), a withholding of $120.00 (the full widow's benefit payable after rounding) and a reduction of her payment to $228.00 is proposed in the initial overpayment notice.

Example 2:Susan Venture, a current D beneficiary ineligible for payment because of her earnings, has an outstanding debt of $1,500. She requested waiver of recovery and following a personal conference decision to deny her waiver, she agreed to repay the debt in $50 monthly installments. Billing was initiated in 8/87. Mrs. Venture reports that she is no longer working and D benefits are payable effective 1/89. Withhold benefits due beginning 1/89 to recover her debt balance of $650.00 ($1,500 minus the $850 8/87- 12/88 installment payments).