SI 02220: Recovery Procedures for Supplemental Security Income Overpayments
TN 27 (04-05)
A. Policy – general
1. Authority for Administrative Offset
The Foster Care Independence Act of 1999 (FCIA) extends to the Title XVI program all of the debt collection authorities currently available for the collection of overpayments under the Title II program. For information on Title II collections by Administrative Offset, see GN 02201.031.
IMPORTANT: In this section, the term “administrative offset” refers to the reduction or withholding of Federal payments other than tax refunds. Although Tax Refund Offset (TRO) is a type of administrative offset, TRO procedures appear in SI 02220.012.
2. Definition of administrative offset
Administrative offset is the reduction or withholding of Federal or State payments to a person to recover a delinquent debt owed by that person to the Federal government. Various Federal payments, such as travel, expense reimbursements, Office of Personnel Management (OPM) pensions, and Federal contractor payments, as well as eligible State payments, such as State income tax refunds, are subject to administrative offset to recover certain past due Title XVI overpayment debts. OPM pensions are subject to a reduction of up to 25% of the net payment. Vendor payments such as Federal contractor payments, travel and expense reimbursements are subject to a reduction of up to 100% of the net payment until the overpayment is repaid.
3. Criteria for administrative offset selection
SSA's automated systems select certain Title XVI debts for recovery by administrative offset. The following criteria apply:
The debt must have been paid to a person after that person attained 18 years of age;
The debt must be considered to be “unrecoverable” under regulations determined by the Commissioner of Social Security (see SI 02220.013B.1. for the definition of “unrecoverable”);
The debt must be owed by a person who is no longer entitled to receive Supplemental Security Income benefits;
The debtor must be alive;
The debt must be $25.00 or more; and
The debt must be delinquent (see SI 02220.012B.2. for the definition of the term “delinquent”).
B. Policy – unrecoverable debt
1. Definition of unrecoverable debt
SSA considers a Title XVI debt to be unrecoverable if it meets all of the following conditions:
The RECOOP billing status is past-due or later, or the debt has been written off as uncollectable (SSI overpayment sequence with a “B” or “M” TAC code); and
SSA has not entered into an installment agreement with the debtor within the past 30 days, or the debtor has failed to make any payment for forty five days; and
No appeal/waiver is pending; and
The debtor is a former recipient.
2. When a debt is unrecoverable
An SSI debt is unrecoverable when it meets the definition in SI 02220.013B.1. For purposes of the administrative offset program, a specific unrecoverable date is not required.
C. Process – pre-offset notice
Once a debt is selected for administrative offset, SSA sends the debtor a notice using the debtor's address of record from the SSR. If the SSR does not have an address or if the notice is returned as undeliverable based on the SSR address, then the Treasury Offset Program (TOP) system will get any available address from the credit bureau via an automated address request operation run out of central office. If the credit bureau provides a new address, SSA will remail the pre-offset notice using that address. If the credit bureau does not provide a new address, then the case will be deleted from TOP. (See GN 02201.029 for a complete explanation of TOP.)
NOTE: The automated address request operation runs out of central office and is a separate project from the credit bureau address requests made by the Debt Management Sections (DMS). The automated operation has no impact on the DMS requests.
The pre-offset notice tells the debtor about the planned offset action and:
That he or she owes a delinquent overpayment debt in a particular amount;
That SSA plans to refer the debt to Treasury for TOP/ECO and/or send information about the debt to credit bureaus after 60 days have expired from the date on the notice;
That SSA will not take this action if, before the end of that 60-day period, the debtor pays the debt in full, makes regular installment payments under an agreement with SSA, requests waiver, or furnishes evidence showing that he or she does not owe all or part of the stated amount or SSA does not have the right to collect the debt; and
That the debtor may review and copy SSA's records about the debt.
NOTE: SSA sends one notice to inform the debtor about TOP/ECO and credit bureau reporting. The same repayment options and due process rights described in SI 02220.012A.4. are offered for credit bureau reporting and for all collection tools. (See SI 02220.014 for credit bureau reporting of Title XVI debts.)
D. Procedure - handling debtor inquiries/protests – pre-offset
1. Request for explanation of overpayment
Follow the instructions in SI 02220.012E.1.
2. Request for explanation of administrative offset
If a request for an explanation of administrative offset is received, explain that, as indicated in the pre-offset notice, Congress passed a law that allows Treasury to withhold unrecoverable SSI overpayments from Federal and State payments due the overpaid person. No systems input is needed to document the request for explanation. The request alone does not stop recovery efforts.
3. Request for waiver
Follow the instructions in SI 02220.012E.3. and SI 02260.001.
4. Request to review record
Follow the instructions in SI 02220.012E.4.
5. Request for installment payments
Follow the instructions in SI 02220.012E.5.
6. Debtor objects to collection of debt
a. Protest involves request for review of the debt or the legality of collection
If the debtor alleges that he or she does not owe all or part of the debt or that SSA has no legal right to collect the debt, advise that if he or she wishes us to review the findings before we refer the debt to Treasury, we must receive evidence to support the allegations within 60 days from the date of the pre-offset notice. Follow SI 02220.012E.6.a. to review any statements/evidence.
b. Protest involves the fact and/or amount of debt
The 60-day due process notice telling the debtor about administrative offset does not offer the right to request reconsideration of the fact and/or amount of the overpayment. If the debtor still protests the fact and/or amount, follow the instructions in SI 02220.012E.6.b.
7. Debtor alleges nonreceipt of overpayment checks or direct deposit payments
Follow the instructions in SI 02220.012E.7.
8. Debtor makes a compromise offer
Follow the instructions in SI 02220.030 and sensitive instructions in SI 02220.031.
9. Debtor alleges nonreceipt of initial overpayment notice
Follow the instructions in SI 02220.012E.9.
10. Report of death
Follow the instructions in SI 02220.012E.10.
11. Report of bankruptcy action
Follow the instructions in SI 02220.012E.11.
E. Procedure - handling post-offset/post-certification inquiries
Some inquiries will be received after certification to Treasury or actual offset has occurred. In the majority of these cases, the debtor simply failed to contact us to resolve the repayment issue as specified in the pre-offset notice. There are other situations, however, where certification to Treasury may have been incorrect. This section explains how to handle specific post-offset/post-certification inquiries.
1. Allegation of pending protest or waiver request
Follow the instructions in SI 02220.012F.1. through SI 02220.012F.3.
2. Request for waiver
Follow the instructions in SI 02220.012F.4.
3. Request for installment payments
Follow the instructions in SI 02220.012F.5.
4. Excess collection
Follow the instructions in SI 02220.012F.6.
5. Alleged nonreceipt of pre-offset notice
Follow the instructions in SI 02220.012G.2.
6. Allegation of bankruptcy action
Follow the instructions in SI 02220.012E.11.
7. Request for different offset amount
a. Background
Various Federal and State payments are subject to a reduction until the delinquent debt is paid. Federal payments include OPM pensions, travel, expense reimbursements and Federal contractor payments. A likely source of Federal payment is the OPM pension, which is subject to a reduction of up to 25%. Vendor payments such as federal contractor payments travel and expense reimbursements are subject to a reduction of up to 100% of the net payment. Eligible State payments may include State income tax refunds or unemployment compensation debt, which are subject to a reduction of 100%.
b. Request for lower offset amount
A debtor may, at any time, request a lower offset amount or percentage alleging financial hardship.
IMPORTANT: SSA will not reduce the amount offset if the debt was caused by intentional false statement or willful concealment of or failure to furnish material information. (Willful concealment means an intentional, knowing and purposeful delay in providing or failure to furnish material information.) Do not take action on a request for a lower offset amount due to hardship when the debt was caused by intentional false statement or willful concealment of or failure to furnish material information.
The procedure for handling a debtor’s request for a lower offset amount depends upon whether SSA can approve the request immediately or SSA requires financial information from the debtor before deciding on the request.
NOTE: A request for hardship does not prevent or stop TOP/ECO or credit bureau reporting.
Grant, without financial development, any request that is at least $50 and would permit recovery within 12 months. Document the Debt Management System (DMS) REMARKS screen.
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If a negotiated/requested amount is at least $50 and would permit full recovery within 36 months, grant the request and annotate the DMS REMARKS screen with the income/expense/asset information obtained from the debtor. DO NOT OBTAIN AN SSA-632-BK OR REQUEST A DETAILED FINANCIAL STATEMENT (i.e., the information requested in Section II on the SSA-632-BK). The debtor’s response to the following questions is sufficient:
What is the amount of your income (i.e., weekly or monthly)?
How much are your average monthly expenses (e.g., rent/mortgage, utilities, etc.)?
Do you have a savings account, CD, or IRA? If so, the approximate value of each.
If a negotiated/requested amount would not permit recovery within 36 months, obtain a signed SSA-632-BK and evaluate income, expenses and assets. Continue the current withholding rate until the SSA-632-BK is received and processed. Withhold the amount by which income exceeds expenses but no less than $50. Annotate the DMS REMARKS screen.
When the offset amount is finally negotiated, send a FAX on SSA letterhead requesting a reduction due to hardship to the Branch Manager for Operations at Bureau of the Fiscal Service (BFS), formerly known as the Financial Management Service (FMS) (FAX number 202-874-6474). If no confirmation is received within 5 workdays, call SSA’s Customer Liaison at BFS (phone number 202-874-7182) for status.
If SSA disagrees with the proposed offset amount, send a notice denying the request. Since the decision as to the amount of offset is an administrative action, not an initial determination, there are no appeal or reconsideration rights available.
NOTE: There could be a time lag between our decision to reduce the offset amount and the implementation of the reduced amount. The effective date of the different rate of offset will be the date BFS effectuates the change. No previously offset benefits should be repaid as a result of a subsequently reduced offset amount.
c. Request for higher offset amount
At any time, a debtor may request a higher offset amount or percentage. If the debtor contacts SSA with the request for higher offset, SSA will honor the debtor’s written request without question. Oral requests, however, cannot be honored unless they are followed by the person’s written request.
After the written request is received, take the following actions:
Record the request on DMS Remarks.
Send a FAX on SSA letterhead requesting an increase in the offset amount to the Branch manager for Operations at the Bureau of the Fiscal Service (BFS) (FAX number 202-874-6474).
If no confirmation is received within 5 workdays, call SSA’s Customer Liaison at BFS (phone number 202-874-7182) for status.
Explain to the debtor that there could be a time lag between their request to increase the offset amount and the implementation of the increased amount. The effective date of the different rate of adjustment will be the date BFS effectuates the change. The decision as to the amount of offset is an administrative action without appeal rights.