TN 18 (07-02)

A. Policy

1. Adjustment of Current or Past Due Payment

1. The Act provides that following a determination that an overpayment exists, recovery must be made by adjustment of future payments to the individual or his/her spouse.

2. The withholding of title XVI payment amounts is the usual method of recovering an overpayment if:

   • The recipient has not refunded the overpayment; and

   • Eligibility continues; and

   • Waiver of adjustment or recovery is not granted.

2. Recovery

Collection is made in the following order:

• Penalty;

• Federally-administered State supplement overpayment;

• Federal SSI overpayment.

3. Couple's Case

An underpayment due a recipient who changes from an ineligible to eligible spouse is not used to offset or to net against an overpayment of his/her spouse, which occurred outside the new couple computation period (See SI 02201.015A.4. and SI 2220.015B.1.) Unless the underpaid member agrees to have it used to offset the spouse's overpayment.

4. Offset of Overpayments

1. Any underpayment due an individual is used to reduce (i.e., recover) any outstanding overpayment of the individual provided the individual has received an initial overpayment notice (see SI 02201.015, SM 01311.170).

2. When the overpaid individual is deceased, see SI 02101.003 and SI 02220.045.

5. SSI Netting

Netting is the process used to determine whether there is an overpayment or an underpayment. It is a part of the payment computation process. All excess payments and additional amounts due for the period (see SI 02201.005B.3.b.) under review are compared. The result is the net over/underpayment amount.

NOTE: Netting is not a method of overpayment recovery. It is the procedure used to determine the amount of an underpayment or the outstanding balance due.

Beginning September 2002 the system will, in most cases, automatically compute the net amount for all periods where there are excess payments and additional amounts due for the period(s) under review. If the net result is an overpayment, the system will create an overpayment sequence for the period under review. The system will, in most cases, notify the individual of the net result either by sending a post eligibility notice and issuing an underpayment or by sending an initial overpayment notice. If the system cannot perform automated netting and/or can not send an automated notice, it will set a B3 diary. See SM 01311.633 for instructions on resolving B3 diaries.

If the system cannot perform automated netting and/or cannot send an automated notice, the Field Office (FO) is required to manually net the period under review and/or issue the appropriate initial overpayment (or underpayment) notice.

See SM 01311.160B.2. and SM 01311.160B.3. for cases that are excluded from automated netting.

B. Procedures

1. Offsetting of Overpayments Against Underpayments

1. In most cases, the SSR will automatically offset an underpayment against the outstanding overpayment balance when there is a D-TAC - Recovery by Check Adjustment - on the record (SM 01311.170).

   If the underpayment amount exceeds the overpayment balance, the remainder is paid to the individual.

2. In cases that require manual offsetting:

   • If an overpayment has been determined (i.e., after netting - see SI 02220.015A.5. and SI 02201.015B.), and

   • The overpaid individual has received an initial overpayment notice and the appeal period has expired (SI 02201.015C.; SM 01311.170), then

   • Any subsequent underpayment is used to offset the overpayment balance.

3. If one member of an eligible couple is underpaid and the other member is overpaid, release the underpayment unless the underpaid member agrees to have it used to offset the spouse's overpayment. (See SI 02201.010B.4., SI 02201.015A.4., and SI 02201.022.)

2. Manual Netting

To perform manual netting, see SM 01311.165B.

3. Change to Nonpayment After Adjustment Begins

On 11/17/2001, the B8/B9 diary process was automated. In almost all cases the system replaces the inappropriate TAC code with the correct one (for example, in a B8 case the G TAC is replaced with a D TAC), and sends the appropriate notice to the individual.

For the few cases that require manual resolution of a B8 diary (see SM 01311.638, SM 01311.639, MSS01-182 and AM 96N-173), proceed as follows:

a. If the initial overpayment notice has not been issued:

• Prepare and issue the notice, and

• Input the notice date.

b. If the initial overpayment notice has been issued and the due process period has expired;

• Determine the uncollected balance of each Recover by Check Adjustment decisions (D TAC) on the record.

• If none of the D TACs have been recovered, replace each D TAC with an installments decisions (G TAC) equal to the uncollected balance. The recovery rate for the G TAC will be equal to the uncollected balance.

• If the D TAC(s) have been partially recovered, input a D TAC equal to the recovered amount and a G TAC equal to the uncollected balance. The recovery rate for the G TAC will be equal to the uncollected balance.

See SM 01311.235 for instructions on how to manually place an overpaid record under RECOOP control.

C. References

• Add/Change Delete Overpayment decisions: MSOM BUSSR 004.007

• Check Recovery Rate Adjustment: SM 01311.125; MSOM BUSSR 004.013

• Netting SM 01311.165B.

• Underpayment netting - SI 02101.001

• Exclusions from automated netting - SM 01311.160B.

• Manual resolution of B9 diaries - SM 01311.639, SM 01311.639, MSS01-182 and AM 96N-173