TN 23 (01-17)

A. Criteria for identifying potential administrative sanction cases

Following is the criteria for identifying potential administrative sanction cases.

1. SSA employees identifying administrative sanction cases

Any SSA or Disability Determination Services employee who identifies a potential fraud violation should consider the possibility of imposing an administrative sanction. SSA employees may identify a case where sanctions may apply at any time during the claims process or in post-entitlement situations for Title II and Title XVI.

Program Service Center (PSC) employees do not make administrative sanction determinations. However, these employees may identify potential sanction cases during case processing or when speaking with beneficiaries and develop fraud issues. The PSC will refer fraud cases to the Office of the Inspector General (OIG) for investigation. In addition, if the referred case meets the initial criteria for an administrative sanction, the PSC will forward a copy of the electronic 8551 and any evidence supporting the finding to the servicing field office (FO).

When a potential fraud situation is uncovered, consider whether the evidence is sufficient to support a finding that the person knowingly made a false statement, omitted a material fact or failed to disclose information that warrants imposition of the sanction. In determining whether a person acted knowingly in making a false or misleading statement or in failing to disclose information, consider the significance of the false, misleading, or omitted information in terms of its likely impact on the person's benefits. Base the decision to impose a sanction on the evidence and reasonable inferences that you draw from that evidence, not on speculation or suspicion.

You may consider the following factors:

• inconsistency among statements made or documents submitted;

• history of providing incorrect information or failing to report events;

• unwillingness of the person to elaborate on facts;

• inconsistency between statements or documents and your observations; and

• inconsistency between statements or documents and SSA records.

For more information about referring a potential administrative sanctions case, see GN 02604.415.

2. Definitions of certain terms

Fraud — For the definition of fraud, see GN 04105.005B.

REMINDER: We do not require a finding of fraud to impose an administrative sanction. See GN 02604.405D.

Similar fault — For the definition of similar fault, see GN 04105.005B.

Material information is any fact the Commissioner may consider in evaluating eligibility for benefits or payment amount.

3. Determining knowledge or whether a person acted “knowingly”

Always use your best judgment to decide whether the evidence in a case is sufficient to support a finding that the person knowingly made a false statement, omitted a material fact, or failed to disclose material information. In determining whether a person acted knowingly, consider, among other things, the significance of the false or misleading statement or failure to disclose in terms of its likely impact on the person's benefits, and his or her history of making false or misleading statements or failing to disclose information.

Determine whether the person had, or should have had, knowledge of material facts and whether the person knew, or should have known, that the failure to disclose information was misleading. In the absence of evidence to the contrary, assume that a claimant has knowledge of all questions included on the application for benefits, including the list of events they must report. In addition, you may assume that a person has knowledge of important aspects of his or personal and financial situations, such as:

• the existence and approximate amount of a bank account;

• the existence of other resources;

• the address of the residence;

• the number of people living at the residence and living arrangements;

• the existence of relationships;

• sources and approximate amounts of income; and

• approximate dates of birth or age.

When evaluating the evidence, consider the person’s:

• understanding of, and agreement to comply with, reporting requirements;

• knowledge of the occurrence of events that should have been reported;

• efforts to comply with the reporting requirements;

• understanding of the obligation to return payments not due;

• ability (as determined by age, comprehension, education, memory, physical and mental condition, language limitations, etc.) to understand and comply with the reporting requirements;

• ability to recognize inconsistencies and evaluate the fairness of SSA's actions;

• experience in dealing with government agencies;

• history of providing inaccurate information; and

• understanding of the technical terminology used by SSA.

If the evidence shows that the person did not understand, the person could not knowingly make the false or misleading statement or fail to disclose information. Resolve any doubt in favor of the person.

4. Other potential violations

For more information on other potential violations, see Detecting Potential Criminal Violations and Fraud (GN 04110.005), Obtaining Evidence in the Development of Violations (GN 04115.005), and Avoiding Common Mistakes in Development (GN 04115.010).

5. Examples of situations when sanctions may apply

The following are some examples of situations in which a finding that the person knowingly provided false or misleading information or failed to disclose material information may be appropriate. REMINDER: Each potential sanction situation is unique, and the outcome of a particular case and factors not summarized below may influence the case.

EXAMPLE 1. After we deny an SSI claim, a person applies for benefits in another office. In the second SSI application, he omits a significant resource that he reported in the first application so that we will approve the claim.

EXAMPLE 2. A person presents altered documents in support of a claim, or uses someone else’s document that she represents as her own.

EXAMPLE 3. After SSA requests that an SSI claimant report all income and resources, he reports one bank account with a balance of $1,000, but fails to report another bank account with a balance of $15,000, which we discovered through the Access to Financial Institutions (AFI) process.

EXAMPLE 4. Someone other than the claimant takes part in a redetermination or a medical examination on behalf of the claimant, while holding himself out to be the claimant. We may also sanction the claimant if he or she is aware of the deception.

EXAMPLE 5. A claimant reports that she is not working in response to a request for such information, but an observation reveals her working for a period of time that overlaps with the work report.

EXAMPLE 6. A claimant alleges and exhibits physical impairments during an interview in a field office (FO), but an observation reveals the claimant taking part in activities that are clearly inconsistent with the alleged impairments. During the interview, he uses a wheelchair or crutches for an impairment that would limit a wide range of activity. Shortly thereafter, an observation reveals the claimant participating in vigorous physical activity without the wheelchair or crutches.

EXAMPLE 7. A claimant reports that she is living at an address, which we later verify is a vacant lot. The FO then determines that the claimant is living outside of the country. This report may constitute both a false statement and a failure to report living outside the country.

EXAMPLE 8. A claimant misrepresents or omits information regarding his living arrangement. The claimant asserts that he is living alone after we advise him of the income rules and income deeming at the time of application and again during redetermination reviews. FO personnel verify that the claimant did not live alone during the time of the representations. They also verify the other person living with the claimant had income that would affect the claimant’s payment amount.

EXAMPLE 9. We suspend an SSI recipient’s payment because he left the country for more than 30 days. He leaves the country again for more than 30 days but omits this information when asked during a subsequent redetermination interview.

EXAMPLE 10. A Title II beneficiary alleges that he has an illegitimate child and claims benefits for that child. Evidence reveals that the beneficiary is not the father and that he knowingly made a false statement in order to gain additional benefits on behalf of the child.

EXAMPLE 11. A beneficiary reports a nonreceipt of her original check. SSA issues a replacement check and the beneficiary cashes both checks. Evidence indicates the beneficiary knowingly and falsely stated that she did not receive the original check. We may impose a sanction for that false statement. We may also impose a sanction for a failure to report the receipt of a duplicate check if the evidence supports a finding that the person knew or should have known that failure to disclose receipt of a duplicate check was misleading.

EXAMPLE 12. A person receiving benefits for having a child in care neglects to report that the child intermittently leaves her care. We determine that not having a child in care would affect her benefits.

EXAMPLE 13. A disability beneficiary, whose benefits we partially offset due to the receipt of workers' compensation (WC), neglects to report an increase in his WC payment amount. At the time we awarded the claim, we advised the beneficiary that he must report any change in his WC payments.

EXAMPLE 14. A disability beneficiary fails to report that she returned to work. The award letter informed the beneficiary that she must report future work.

EXAMPLE 15. When applying for spouse’s benefits, a claimant falsely answers that he does not qualify for a pension based on non-covered employment. Several years later, the number holder (the claimant’s wife) informs us that her husband is entitled to a pension based on his non-covered employment and that he had been entitled, in fact, since before he claimed his spousal benefits. SSA should have applied the Government Pension Offset to reduce his spousal benefit through the life of his claim.

EXAMPLE 16. A claimant for retirement benefits falsely answers that he is not entitled to a pension based on non-covered employment. Several years later, SSA becomes aware that at the time of claiming Social Security retirement benefits he was in fact entitled to a pension based on non-covered employment from the State of Ohio. SSA should have applied the Windfall Elimination Provision to reduce his retirement benefit amount. 

6. Examples of situations when sanctions may not apply

EXAMPLE 1. An SSI applicant reports having three bank accounts, but neglects to report a fourth bank account with a comparatively modest balance, which we discovered through the AFI process. These circumstances may be unlikely to support a finding that the person acted knowingly in concealing the existence of the fourth bank account. However, if the unreported account had the highest balance, or if that account would have put the person over the limit for resources, it would be more reasonable to find that the person knowingly omitted it.

EXAMPLE 2. An SSI recipient fails to report that her spouse moved back into the household. However, the spouse has no income or resources.

EXAMPLE 3. A 35-year old beneficiary has received benefits since age 5. We determine that he is incapable of handling his own benefits. However, because he has difficulty keeping payees, we made the claimant his own payee. Because he fails to report that he has worked, he is overpaid. The technician must look at all of the facts and use discretion to determine whether a person with this type of disability knowingly failed to report the work activity.

EXAMPLE 4. A recipient’s false or misleading statement results in a small overpayment. The technician must use discretion in determining whether the person acted knowingly, because the less significant the false statement in terms of its likely impact, the less likely it may be that the person knew or should have known it was false.

7. OIG-identified cases

The OIG receives potential fraud referrals from a variety of sources. OIG may identify potential sanction cases if, after investigation of a potential fraud violation, it appears that administrative sanctions may be appropriate on cases that were not previously considered. OIG will refer these cases to the servicing FO as if the FO had initiated the fraud referral.