BASIC (09-02)

A. Background

Public Law 106-169 (the Foster Care Independence Act of 1999) amended section 1147(a) of the Social Security Act to provide discretionary authority for the recovery of SSI overpayments from Special Veterans Benefits (SVB). Before executing this authority, SSA was required to engage in rulemaking and provide the public the opportunity to comment on our proposed policy. SSA completed this process and published the final regulation in the Federal Register on June 4, 2002 (67 FR 38381). The effective date of the regulation is July 5, 2002.

Although SSI and SVB are two separate programs, both utilize the SSR for record keeping and systems processing. As a result, when SVB were awarded, any unresolved overpayments on terminated SSI records were to be retained on the terminated SSI SSR until the cross-program regulatory process had been completed. If these overpayments had been carried over onto the SVB SSR, the system would have improperly adjusted the SVB payments for the SSI overpayment.

In May 2001, instructions were issued to pursue recovery of unresolved SSI overpayments from SVB recipients. However, since SSA did not have authority to adjust SVB at that time, and the foreign address precluded tax refund offset or RECOOP billing, recovery efforts were limited to requesting refund of the overpayment. As of July 5, 2002, SVB can be adjusted to recover these overpayments (i.e., cross-program recovery).

This subchapter provides operating procedures for implementing cross-program recovery of SSI overpayments from SVB payments when the overpayment has not be refunded and remains unresolved.

IMPORTANT: These instructions presume that the SVB recipient has been notified of the unresolved SSI overpayment. If the issuance of the initial overpayment notice cannot be documented (e.g., NTD entry on the SSR or a copy of the notice), an initial SSI overpayment notice must be manually prepared and sent to the liable party. Follow these procedures if an appeal is not filed within 60 days of the debtor's receipt of the SSI overpayment notice.

B. Policy

1. Cross-Program Recovery Exclusions

Cross-program recovery of unresolved SSI overpayments from SVB payments can be initiated unless:

• the overpaid individual has a pending waiver or reconsideration request on the debt; or

• SVB payments are already being adjusted to recover an SVB overpayment; or

• the SVB recipient's title II benefits are being adjusted to repay an SSI overpayment (i.e., simultaneous SSI overpayment adjustments from title II benefits and SVB are not permitted); or

• the SSI overpayment is already being refunded by regular monthly installments.

2. Installment or Refund Requests

New installment agreements will not be accepted when cross-program recovery is available. However, full and immediate refunds of the SSI debt (or a legitimate compromise settlement as discussed in SI 02220.030) will be accepted in lieu of cross-program recovery.

3. Rate of Withholding

The rate of cross-program recovery will be 10 percent of the SVB payable in a month except when the debtor:

• requests, and we approve, a different rate of withholding; or

• has engaged in willful misrepresentation or concealment of material information in connection with the overpayment (in which case 100 percent of the SVB payable in a month will be withheld).

4. Notice

Before beginning cross-program recovery of SSI overpayments from SVB, the debtor must be sent a written notice advising him/her of the adjustment of SVB for an unresolved SSI overpayment. Cross-program recovery cannot begin until at least 30 calendar days after the date of the notice.

IMPORTANT: This notice does not replace an initial notification of SSI overpayment. A separate SSI overpayment notice must be provided to the debtor if there is no documentation of prior notification. The written notice of cross-program recovery will subsequently be sent to the debtor (after the expiration of the 60-day appeal period provided in the initial overpayment notice).

5. When Cross-Program Recovery Stops

SSI overpayment adjustments from SVB payments will stop when:

• The individual's SVB payments stop;

• The debt balance drops to zero;

• Monthly SVB are to be adjusted to recover an SVB overpayment; or

• The SSI debtor requests reconsideration or waiver on the SSI debt being collected.

C. Procedure—Implementing Cross-Program Recovery of SSI Overpayments from SVB

If there is no pending action on a request for reconsideration of the overpayment determination or a request for waiver, process as follows:

• Q TAC the unresolved SSI overpayment from the terminated SSI SSR that is to be recovered from SVB (if necessary);

• P TAC the SSI overpayment to be recovered onto the SVB SSR;

• Begin recovery at a rate of 10 percent of the monthly SVB payment. IMPORTANT : Schedule the withholding to take effect no earlier than the first recurring SVB to be paid after the expiration of 30 days from the date of the cross-program recovery notice.

• Enter a money amount of withholding. Do not enter a ‘Y' in the 10 percent field as this will result in a systems-calculated rate of recovery used in SSI check adjustments and is not applicable in cross-program recovery.

• Notify the debtor of cross-program recovery (Exhibit 1 explained in VB 02020.005D. below).

IMPORTANT: SSI overpayments cannot be withheld from monthly State recognition payments. Only the SVB portion is subject to adjustment. If an underpayment becomes payable on the SVB record while benefits are being adjusted to recover an SSI overpayment, the system will automatically offset the underpayment against any outstanding overpayment. This would result in the erroneous withholding of State recognition payments if any are included in the underpayment. To avoid this, pay State recognition underpayments by One Time Payment (OTP).

D. Procedure—Notice of Cross-Program Recovery Action

1. Notice Requirements

Send a written notice (Exhibit 1 in VB 02020.005L.) containing the following information:

• the specific SSI overpayment balance to be collected by cross-program recovery;

• the specific amount to be withheld from SVB each month;

• the right to ask us to review whether he/she still owes this SSI overpayment balance;

• the right to request a different rate of withholding; and

• the right to ask for waiver of the SSI overpayment.

2. Exhibit 1—Notice of Cross-Program Recovery of SSI Overpayment from SVB

Complete the Exhibit 1 as follows:

a. Heading

• Enter the CPS's address, date and the SVB recipient's SSN.

• Complete the SVB recipient's address.

• No salutation is required.

b. Fill-Ins

Only the first paragraph requires manual fill-ins:

• Fill-in 1: Enter the total SSI overpayment to be recovered from SVB.

• Fill-in 2: Enter the amount that is to be withheld from SVB each month.

• Fill-in 3: Enter the date of the first SVB payment to be adjusted by cross-benefit recovery.

• Fill-in 4: Enter the monthly SVB payment amount after cross-benefit recovery adjustments (include State recognition payments, if applicable).

c. Enclosure

Enclose an envelope addressed to the CPS having jurisdiction of the SVB claim. IMPORTANT: Do not use a postage-paid envelope.

E. Procedure—Review Requested—Debtor Alleges He/She Does not Owe the Debt or Owes a Different Amount

1. General

The notice (Exhibit 1) provides the debtor with the opportunity to request that we review our finding and to present evidence that he/she does not owe the debt or owes an amount that is different than the amount stated in the notice. (See VB 02020.005F. if the debtor appeals the SSI overpayment determination .)

2. Office Receiving the Review Request

a. Review Requested Within 30 Days of the Date of the Notice (Exhibit 1)

• Obtain a signed request for review from the debtor explaining his/her disagreement;

• Obtain supporting evidence, if available (e.g., cancelled check, remittance receipt from SSA, etc.);

• Fax (and then forward) the statement and supporting evidence to the CPS having SVB jurisdiction;

• Inform the debtor that SSA will stop cross-program recovery;

• Explain to the debtor that SSA will refund all cross-program recoveries that have been withheld from SVB;

• Explain that SSA will notify the debtor of the review results in writing.

b. Review Requested Within 31-60 Days from the Date of the Notice (Exhibit 1)

Process as in VB 02020.005E.2.a. except bullet # 5. (Cross-program adjustments already withheld from SVB in the month(s) prior to the review request will not be refunded.) Instead, tell the debtor that any adjustments to SVB in the month of the review request, and any subsequent month(s), will be refunded.

c. Review Requested After 60 Days from the Date of the Notice (Exhibit 1)

Process as in VB 02020.005E.2.b. above. In addition, develop good cause for late filing per SI 04005.015 and fax (and then forward) all documentation to the CPS having SVB jurisdiction. NOTE: The CPS will make good cause determinations on late filings.

3. CPS Processing

IMPORTANT: The CPS having SVB jurisdiction will be responsible for processing a debtor's request for review even if the SSI overpayment in question was originally processed by another FO.

a. Review Requested Within 60 Days of the Date of the Notice (Exhibit 1)

• Stop cross-program recovery of the SSI overpayment;

• Refund any cross-program adjustments made in the month the review is requested and any subsequent months, if applicable; and

• Process as follows depending upon the results of the review:

The amount of debt shown on the notice is correct

• Notify the debtor in writing that, after a review of the evidence, the amount shown on the notice is correct; and

• Resume cross-program recovery to begin no sooner than 35 days from the date of the notice.

The amount of debt shown on the notice no longer exists

• Notify the debtor in writing that the debt no longer exists; and

• Correct the overpayment data on the SSR.

The amount of debt shown on the notice is incorrect

• Notify the debtor in writing of the correct amount of SSI debt;

• Correct the overpayment data on the SSR; and

• Resume cross-program recovery of the revised SSI overpayment amount to begin no sooner than 35 days from the date of the notice.

IMPORTANT: The CPS's finding is considered to be a reconsideration determination. As a result, language explaining the right to a hearing before an administrative law judge must be included in the review decision notice.

b. Review Requested After 60 Days from the Date of the Notice (Exhibit 1)

• Stop cross-program recovery of the SSI overpayment;

• Refund any cross-program adjustments made in the month the review is requested and any subsequent month(s), if applicable.

• Determine if good cause for late filing exists per SI 04005.015 and process as follows:

Good cause established

• Document the file to show good cause was established;

• Process according to VB 02020.005E.3.a. depending on whether the amount of debt shown on the notice is correct, incorrect, or no longer exists.

• Consider the review request to be timely filed; and

Good cause not established

• Follow the instructions in SI 04020.020; and

• Resume cross-program recovery to begin no sooner than 35 days from the date of the good-cause notification.

F. Procedure—Debtor Requests Reconsideration of the Original SSI Overpayment Determination

1. General

A written request for reconsideration must be received in an SSA office within 60 days of the debtor's receipt of the initial overpayment notice. The time period may be extended if good cause is established for not filing within the 60-day period (see SI 04020.020B.). If the debtor is not requesting reconsideration of the overpayment determination but is requesting a review (e.g., alleges no longer owing the debt or owing a different amount, etc.) see VB 02020.005E.

2. Office Receiving the Reconsideration Request

a. Request Filed Within 60 Days of the Debtor's Receipt of Initial Overpayment Notice

• Obtain a signed SSA-561-U2 (or equivalent) from the debtor (see GN 03102.225 for instructions on completing an SSA-561-U2.);

• Fax (and then forward) the SSA-561-U2 and supporting evidence to the CPS having SVB jurisdiction;

• Inform the debtor that SSA will stop cross-program recovery;

• Explain to the debtor that SSA will refund all cross-program recoveries that have been withheld from SVB; and

• Explain that SSA will provide a written determination to the debtor after reviewing the request.

b. Request Filed Beyond the Time Limit

Process as in VB 02020.005 F.2.a. above, except bullet #4. (Cross-program adjustments already withheld from SVB in months prior to the filing of the appeal request will not be refunded.) Instead, tell the debtor that any adjustments to SVB in the month the appeal request is filed, and any subsequent month(s), will be refunded. Develop good cause for late filing per SI 04005.015 and fax (and then forward) all documentation to the CPS having SVB jurisdiction. NOTE: The CPS will make good cause determinations on late filings.

3. CPS Processing

IMPORTANT: The CPS having SVB jurisdiction will be responsible for processing the debtor's request for reconsideration even if the SSI overpayment in question was originally processed by another FO.

a. Reconsideration Request Filed Within 60 Days of the Debtor's Receipt of Initial Overpayment Notice

• Stop cross-program recovery of the SSI overpayment;

• Refund cross-program adjustments made from SVB;

• Process the reconsideration following the instructions in SI 04020.030.

b. Reconsideration Request Filed Beyond Time Limit

• Stop cross-program recovery of the SSI overpayment;

• Refund cross-program adjustments deducted from SVB in the month the reconsideration request was filed (and any subsequent month(s), if applicable);

• Determine if good cause for late filing exists using the criteria in SI 04005.015.

Good cause established

• Adjudicate the request for reconsideration using the guidelines in SI 04020.030;

• Process per VB 02020.005F.3.c. or VB 02020.005F.3.d. below.

Good cause not established

• Follow the instructions in SI 04020.020; and

• Resume cross-program recovery to begin no sooner than 35 days from the date of the reconsideration determination notice.

c. Reconsideration Approval (Initial Determination Revised or Reversed)

• Effectuate the reconsidered determination (see SI 04020.060 for processing); and

• Correct overpayment data on the SVB SSR.

• If the reconsidered determination does not resolve the entire SSI overpayment, resume cross-program recovery of the balance to begin no sooner than 35 days from the date of the reconsideration determination notice.

d. Reconsideration Denial (Initial Determination Affirmed)

• Notify the debtor per SI 04020.060; and

• Resume cross-program recovery to begin no sooner than 35 days from the date of the notice.

G. Procedure—Debtor Requests a Hearing or Appeals Council Review on the SSI Overpayment Determination

NOTE: The method of recovery (i.e., cross-program recovery) cannot be appealed. The following instructions apply only if the debtor is appealing the initial SSI overpayment determination.

• Do not stop cross-program recovery or refund any cross-program recoveries already withheld from SVB.

• Process per SI 04030.020 for hearings requests; process per SI 04040.020 for Appeals Council reviews.

H. Procedure—Request for Different Rate of Withholding

1. General

The notice (Exhibit 1) informs the debtor that he/she may request a different rate of withholding from the one proposed. The notice advises the debtor that if he/she requests a different rate of withholding within 30 days of the notice, cross-program recovery will not begin until a withholding amount has been determined. The debtor is informed that a letter will be sent apprising him/her of the decision reached on a different rate of withholding.

2. Office Receiving the Request

a. Request Received Within 30 days of the Date of the Notice (Exhibit 1)

• Inform the debtor that cross-program recovery will not be effectuated until a new rate of withholding has been determined;

• Notify the CPS having SVB jurisdiction in order to stop cross-program recovery; and

• Process per VB 02020.005H.2.c.

b. Request Received After 30 Days from the Date of the Notice (Exhibit 1)

• Inform the debtor that cross-program recovery will take effect using the rate of withholding explained in the notice; however, his/her request for a different rate of adjustment will be evaluated; and

• Process per VB 02020.005H.2.c.

c. Revising the Rate of Withholding

• Negotiate a revised rate of withholding.

New rate is less than 10 percent of monthly SVB payment:

Determine whether the debtor is actually requesting a waiver. If he/she is, follow VB 02020.005J. If not, negotiate a recovery rate that will complete recovery within 12 months, or if not possible, arrange for repayment within 36 months. If this cannot be achieved, determine a rate that is appropriate for the financial situation of the individual.

REMINDER: The system is unable to effectuate a rate of withholding of less than $1 per month.

If new rate exceeds 10 percent of monthly SVB payment:

Obtain a signed statement (e.g., SSA-795) from the debtor showing that he/she understands that the maximum required rate is 10 percent of his/her monthly SVB payment, and that he/she is voluntarily requesting a higher rate of adjustment.

• Fax and then forward the request and supporting materials to the CPS having SVB jurisdiction.

3. CPS Handling

If the request was filed within 30 days of the date of the notice

(Exhibit 1), do not initiate cross-program recovery until a new rate of withholding has been determined. If the request was received by the servicing office after 30 days from the date of the notice, do not stop cross-program recovery while a revised rate of withholding is assessed.

Process per SI 02220.017A.2.d. when the request for a different rate of withholding is approved. Process per SI 02220.017A.3. when the request for a different rate of withholding is denied.

I. Procedure—Debtor Offers to Repay SSI Overpayment in Installments

Tell the debtor:

• We will not accept repayment by installment offers if cross-program recovery is available.

• We will accept a full and immediate refund of the debt.

• We will consider a legitimate offer of a compromise settlement (as discussed in SI 02220.030).

• The debt will be collected by cross-program recovery unless otherwise resolved.

J. Procedure—Request for Waiver

1. Office Receiving the Waiver Request

• Obtain an SSA-632-BK from the SVB recipient per instructions in SI 02260.005. NOTE: An SSA-632-BK will be completed even when the SSI overpayment involved is less than $500.

• Fax, and then forward, the signed waiver request to the CPS having SVB jurisdiction.

• Advise the debtor as follows:

  Waiver requested within 30 days of the date of the notice (Exhibit 1)

  Inform the SVB recipient that cross-program recovery will not be effectuated, or will stop if it has already been effectuated, and any cross-program recovery adjustments made to SVB to collect the SSI debt will be refunded.

  Waiver requested after 30 days from the date of the notice (Exhibit 1)

  Inform the SVB recipient that cross-program recovery will be stopped effective with the month the waiver request is filed. Cross-program adjustments made to SVB prior to the month the waiver request is filed will not be refunded.

• Explain that SSA will provide the debtor with a written determination of its findings after reviewing the waiver request.

2. CPS Handling

NOTE: The CPS having SVB jurisdiction will be responsible for processing SSI overpayment waiver requests if the debtor is currently receiving SVB and the waiver request resulted from the cross-program recovery notice (Exhibit 1) even if the SSI overpayment was detected and/or processed in another FO.

• Suspend cross-program recovery with the month the SSA-632-BK is filed per SM 01311.130; and

• Refund SVB withheld using the following guidelines:

  If waiver requested within 30 days of the date of the notice (Exhibit 1)--Refund all SVB withheld for cross-program recovery of the SSI overpayment.

  If waiver requested after 30 days from the date of the notice (Exhibit 1)—Refund all SVB withheld in the month (and any subsequent month(s)) the waiver request is filed.

• Input the waiver request via MSSICS per MSOM BUSSR 004.009; and

• Process the waiver request using the guidelines in VB 02020.005 K.

K. Waiver Determinations

1. General

The policies cited in SI 02260.001 apply. An SSI debtor must be given an opportunity for a personal, face-to-face conference before a request for waiver of recovery can be denied (as explained in SI 02260.006). However, the conference must be held in the United States, and travel to the conference must be at the overpaid individual's expense (see SI 02260.006C.).

One of the basic requirements for waiving the recovery of an SSI overpayment is that the liable individual is without fault in causing the overpayment. Without fault is presumed in SSI overpayments of $30 or less and, as a result, recovery of the overpayment is administratively discontinued because pursuing recovery impedes effective or efficient administration (see SI 02260.030B.) Generally, SSI overpayments between $30.01 and $500 are administratively discontinued for the same reason unless there is an indication of fault on the part of the overpaid person (see SI 02260.030C.). If there is an indication of fault on the part of the overpaid individual, full waiver development will be conducted for SSI overpayments between $30.01 and $500.

2. SSI Overpayments Detected/Discovered from Filing of SVB Claim

Several SSI overpayments incurred by SVB recipients were detected upon filing for SVB when it was discovered that the recipient did not report that he/she had been (or was) outside the U.S. (N03), and SSI payment was not due. In other cases the individual had concealed receipt of unearned income (e.g., PVAO) while entitled to SSI and, as a result, was overpaid. Per SI 02260.010F., these situations indicate fault on the part of the overpaid individual and will not relieve the individual of the responsibility for repayment even if the overpayment is more than $30 but less than $500.

3. Waiver Approved In Full

• Process per SI 02260.001B.2.; and

• Prepare a manual notice of the waiver approval (see NL 00803.205). NOTE : A manual notice is necessary because notices are not systems-generated in SVB cases.

4. Waiver Denied or Only Partially Approved

• Process per SI 02260.001B.3.; and

• Prepare a manual notice of the wavier denial (see NL 00803.210).

L. Exhibit 1

                                                                                             Social Security Administration

                                                                                             Central Processing Site

                                                                                             Date:

                                                                                             Claim Number:

When you received Supplemental Security Income (SSI) payments in the past, you received more than you should have. Our records show that you still owe us $____________. The U.S. Congress passed a law that permits us to collect SSI overpayments by withholding from your Special Veterans Benefits (SVB). (However, we are not permitted to withhold from any State recognition payment that may be included in your monthly SVB payment.) We plan to do that by withholding 10 percent of your monthly SVB payment until we collect the amount you owe. Using the monthly SVB payment you are now paid, we will collect $__________ each month. Beginning _________________ you will be paid $__________ each month. Once the SSI overpayment has been fully recovered, your full monthly SVB payment will resume.

What You Can Do

We will begin the above withholding unless, within 30 days of the date of this letter, you:

• Pay us back the full amount you owe,

• Ask us to review our finding that you still owe us the amount stated above,

• Ask us to withhold a different amount, or

• Ask for a waiver.

How to Pay Us Back

Make your check or money order payable to “Social Security Administration,” and send it to us in the enclosed envelope. Be sure to include your claim number on the check or money order.

Do You Think You Do Not Owe This Money?

You may ask us to review our finding that you owe the money. You may have evidence to show that you already paid some or all of the money or that we previously waived collection of it. If so, give us this evidence when you ask for review. We will review the evidence you give us and the information we have. We will send you a letter with our decision. If we find that you do not owe us this amount, then we will correct our records.

If you want a review, you must tell us within 60 days from the date of this letter. If you do so within the first 30 days, we will not begin to withhold money until we examine your case and send you a letter with our decision.

Do You Want Us to Withhold A Different Amount?

You may ask us to withhold a different amount than the one we propose. If you ask us within 30 days from the date of this letter, we will not begin to withhold money from your SVB payments until we decide the amount we will withhold. We will send you a letter about our decision.

How to Request a Review or A Different Amount of Withholding

To request a review or a different amount of withholding, write to us at the address shown at the top of this letter. If you prefer, you may make your request through any Social Security office, United States Embassy or consulate, or the U.S. Veterans Affairs Regional Office in Manila, Philippines. If you do visit one of these offices, please take this letter with you.

If You Think You Should Not Have to Pay Us Back

You may not have to pay back the overpayment. Sometimes we can waive the collection of an overpayment. For us to waive the collection of the overpayment, two things have to be true.

• It wasn't your fault that you got too much SSI money.

AND

• Paying us back would mean you can't pay your bills for food, clothing, housing, medical care or other necessary expenses, or it would be unfair for some other reason.

If you think both are true about you, contact any Social Security office, United States Embassy or consulate, or the U.S. Veterans Affairs Regional Office in Manila, Philippines to request a waiver. If you ask for waiver within 30 days from the date of this letter, we will not begin to withhold money from your SVB payments until we decide if we can waive collection. If you ask for waiver after 30 days, we will stop collecting the overpayment while we decide if we can waive collection.

If You Have Any Questions

If you have any questions, you can write to us at the address at the top of this letter. If you prefer, you may contact any Social Security office, United States Embassy or consulate, or the U.S. Veterans Affairs Regional Office in Manila, Philippines. If you visit one of these offices, please take this letter with you.

Enclosure:

Refund Envelope