TN 12 (03-89)

A. Operating policy

When full recovery cannot be accomplished, it may be more advantageous to negotiate the best possible compromise settlement with the debtor.

B. Operating procedure

1. When to consider

During a followup contact (telephone or face-to-face) if it appears that the debtor is unable or unwilling to repay the full debt.

In the final request for refund (NL 00703.130, Exhibit E3130 or SSA-L4940).

Must be considered before PC refers to DOJ (GN 02215.150 - GN 02215.165) or discontinues collection efforts (GN 02215.235).

2. What to consider

Compromise offers require consideration of the:

1. Debtor's ability to repay the entire debt, and

2. Possibility of adjustment (i.e., current or future), and

3. Relationship of the compromise offer to the actual overpayment amount, and

4. Circumstances surrounding any prior compromise settlement, and

5. Possibility of litigation and its cost (GN 02215.100B.1.).

An offer which is 80 percent of the debt amount will always be accepted if SSA has the authority to compromise (GN 02215.100B.).

Regardless of the amount offered, however, a degree of judgment must be used to determine if the best possible offer has been negotiated and the most reasonable arrangement reached.

Example:Debtor currently receiving benefits of $300 each month. He is overpaid $10,000 and offers a compromise of $6,000, 60 percent of the debt amount. Since the entire amount could be recovered within 3 years by adjustment, it would seem reasonable to reject the compromise offer. On the other hand if the benefit amount is $100 each month, it might be preferable to accept the compromise offer since it would take 5 years to equal the $6,000 offer and more than 8 years to recover the entire debt.

3. Format of compromise offer

1. Telephone Offer- Document on an SSA-5002 and include the following items:

   • The person's name, SSN and claim symbol, and

   • The person's current address, and

   • The amount of the outstanding debt, and

   • The amount offered as a compromise, and

   • When and how the compromise will be refunded. (Normally the entire compromise should be paid within 30 days after the individual is notified that the offer is accepted), and

   • The reason a lesser amount is offered, and

   • An understanding that, if the settlement amount is not received by the due date, the full debt is subject to recovery.

If development is necessary(GN 02215.115B), written documentation of the offer (an SSA-795) over the signature of the debtor or his/her representative must be obtained when the development is requested. The statement must contain the same items as the SSA-5002 above.

2. Face-to-Face Offer- Document in writing (e.g., in letter form or SSA-795) over the signature of the debtor or his/her representative. The written documentation should contain the same items as the SSA-5002 above.