SI 04070.020: Fraud and Similar Fault - SSI

changes
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~~Effective Dates: 09/08/2016 - Present~~
Effective Dates: 10/26/2017 - Present
TN 4 (06-05)
SI 04070.020 Fraud and Similar Fault - SSI
A. Policy - fraud
If fraud is suspected, complete all development for the entire period except the determination that fraud exists and refer the case to the Office of Investigation Field Offices (OIFO) (formerly regional OIG) in accordance with the instructions in GN 04020.010 – Unrestricted Reopening – The Determination or Decision Was Procured by Fraud or Similar Fault. If OIFO notifies us that fraud exists, unlimited reopening is available, even if the fraud is not prosecuted in a criminal proceeding. Normally, OIFO will notify us that fraud exists only if there is a conviction for fraud. If OIFO determines that fraud does not exist, unlimited reopening based on fraud is not available, and the FO must consider the possibility of similar fault. (See SI 04070.020B.) The FO, and not OIFO, makes similar fault determinations.
NOTE: When making a fraud or similar fault determination, take into account the recipient’s physical, mental, educational, or linguistic limitations, including any lack of facility with the English language.
1. Overpayments within the administrative finality period
Usually systems input of factors that affect payment will result in issuance of the appropriate automated notice. In all cases which require manual notices, send the appropriate notice of revised determination which advises the recipient of his/her appeal rights (either SSA-L8100-U2 or SSA- L8155-U2). Then follow procedures in the following sections to recover the overpayments: SI 02201.000 – Supplemental Security Income Overpayments - Overview, SI 02220.000 – Recovery Procedures for Supplemental Security Income Overpayments, GN 02201.005 – Refiguring Overpayment Amount, GN 02210.001 – Adjustment of Overpayments, GN 02215.000 – Method of Recovery for Title II, Title XVIII, and SM 01310.001 – Introduction to the SSI System’s Process for Overpayments/Underpayments.
Usually systems input of factors that affect payment will result in issuance of the appropriate automated notice. In all cases which require manual notices, send the appropriate notice of revised determination which advises the recipient of his/her appeal rights (either SSA-L8100-U2 or SSA-L8155-U2). Then follow procedures in the following sections to recover the overpayments: SI 02201.000 – Supplemental Security Income Overpayments - Overview, SI 02220.000 – Recovery Procedures for Supplemental Security Income Overpayments, GN 02201.005 – Recalculating a Title II Overpayment Amount Due to Additional Benefits Payable, GN 02210.001 – Adjustment of Overpayments, GN 02215.000 – Method of Recovery for Title II, Title XVIII, and SM 01310.001 – Introduction to the SSI System’s Process for Overpayments/Underpayments.
2. Overpayments made before 2-year period
After OIFO makes a determination of fraud or the FO makes a determination of similar fault, follow the same procedures to recover the overpayment as described in SI 04070.020A.1.
B. Policy - similar fault
The FO has the authority to decide whether to initiate similar fault development. We consider developing similar fault when:
* A case of suspected fraud has been referred to OIFO and a determination has been made by that office that fraud does not exist because there is no fraudulent intent; or
* OIFO returns the case because there has been no fraud conviction; or
* OIFO gives no reason for a determination that fraud does not exist; or
* The case meets all the criteria in section SI 04070.020B.1.
1. Criteria to establish similar fault
Criteria to establish similar fault are:
* The changed event is material and will create a new or additional overpayment; and
* A wide discrepancy exists between the new data and the data reported; and
* The SSI recipient (or deemor) knowingly completed an incorrect or incomplete report, knowingly concealed events or changes, or knowingly neglected to report events or changes that he/she knew or should have known would affect payments; and
* The event (change in income, resources, living arrangements, etc.) can and will be verified; and
* The event (change in income, resources, living arrangements, etc.) is clearly attributable to the SSI recipient (or the deemor); and
* The FO development does not indicate that there is fraud based on the facts in the case. See SI 04070.020E for the similar fault determination flow chart.
Note: The difference between fraud and similar fault is fraud requires us to prove the person intended to defraud us. If unable to prove fraudulent intent, consider whether a finding of similar fault would be appropriate.
The term “wide discrepancy” cannot be defined in terms of money amount. It is a matter of judgment that depends on how recently the income was received, how long it was unreported or under-reported, as well as the amount and frequency, etc.
2. Documentation
A finding of similar fault must be supported by a preponderance of evidence and documented on Form SSA-553 or other written summary of the issues (e.g. Report of Contact). The SSA-553 or other written documentation is used to summarize the evidence to show convincingly that similar fault exists.
For definition of preponderance of evidence see GN 04020.010A.6.
3. Notification
The recipient must be notified on either the SSA-L8100-U2 (SSI Notice of Revised Determination) or the SSA-L8155-U2 (SSI Notice of Planned Action), as appropriate, that similar fault exists and what evidence was used to make that determination.
The recipient must also be advised of his/her appeal rights.
4. Overpayments
If similar fault is detected and fraud does not exist, we:
* Make the similar fault determination; then
* Develop the entire overpayment; and then
* Recover the overpayment per SI 02220.001 – Recovery Procedures for SSI Overpayments – General, SI 02201.000 – Supplemental Security Income Overpayments – Overview, GN 02201.005 – Refiguring Overpayment Amount, GN 02210.001 – Adjustment of Overpayments and SM 01310.001 – Introduction to the SSI System’s Process for Overpayments/Underpayments.
* Recover the overpayment per SI 02220.001 – Recovery Procedures for SSI Overpayments – General, SI 02201.000 – Supplemental Security Income Overpayments – Overview, GN 02201.005 – Recalculating a Title II Overpayment Amount Due to Additional Benefits Payable, GN 02210.001 – Adjustment of Overpayments and SM 01310.001 – Introduction to the SSI System’s Process for Overpayments/Underpayments.
The overpayment notice must cover the entire overpayment period.
5. Waiver considerations
a. Recipient
If similar fault on the part of the recipient is established, the overpaid recipient should be found at fault for waiver purposes.
b. Deemor
If similar fault is found on the part of a deemor for reopening purposes, the recipient can still be found without fault for waiver purposes.
C. Policy – similar fault and excluded development
Under certain circumstances, similar fault development should not be started, or if it has been started, it should be stopped, because it would defeat the purpose of Title XVI, result in excess effort on the part of SSA for a small payoff, impose undue hardship on the recipient, etc. Examples of such cases include, but are not limited to those in which:
* The SSI recipient is dead; or
* The recipient is 75 or older and is in poor health; or
* Medical evidence indicates the SSI recipient has an illness expected to result in death in the near future; or
* The overpayment resulted solely from a failure to report a cost-of-living increase in a pension or annuity.
No documentation is required in these cases.
D. Policy – when to curtail development after similar fault development has begun
Development after similar fault development has begun, should be curtailed when:
* The suspect SSI recipient died after similar fault development was initiated;
* Reasonable efforts to develop similar fault reveal insufficient evidence to establish a preponderance of evidence that similar fault occurred and the excess payment amount is less than the current monthly Federal benefit rate;
* Negligence or error by SSA employees significantly contributed to the overpayment;
* The law or policy has changed so that the event or change would no longer cause excess payments (for the instructions regarding change of law and change of position, see SI 04070.040C. and SI 04070.040D.);
* The potential excess payment involves a situation difficult to establish; e.g., repeated marital changes, frequent changes in living arrangements, in-kind income that is difficult to establish, etc.; or
* The file contains a favorable determination (initial or appealed) on the issue involved in similar fault.
Complete a report of contact reflecting the reasons for curtailment in the above cases.
E. Exhibit – similar fault determination flow chart
Development if incorrect payments are discovered:
View PDF Version
F. References
1. Referral to OIFO
GN 04020.010 – Unrestricted Reopening – The Determination or Decision Was Procured by Fraud or Similar Fault
DI 23025.000 – Fraud or Similar Fault
2. Overpayment recovery
SI 02220.000 – Recovery Procedures for Supplemental Security Income Overpayments
SI 02201.000 – Supplemental Security Income Overpayments – Overview
~~GN 02201.005 – Refiguring Overpayment Amount~~
GN 02201.005 – Recalculating a Title II Overpayment Amount Due to Additional Benefits Payable
GN 02210.001 – Adjustment of Overpayments
3. Similar fault development - MEF/SSR interfaces
GN 04020.010 – Unrestricted Reopening – The Determination or Decision Was Procured by Fraud or Similar Fault
VB 02507.025 – Unrestricted Reopening Similar Fault

POMS Reference

SI 04070.020: Fraud and Similar Fault - SSI