TN 19 (12-02)

A. Policy

Section 1631(b)(1)(B) of the Act provides that the rate of adjustment of payment to recover SSI overpayments will be the lesser of:

• Ten percent of the recipient's total monthly income (countable income plus SSI and State supplementary payment); or

• The recipient's entire monthly benefit.

1. Applying the 10 Percent Rate

1. Apply the 10 percent limitation only to cases where the payment status is C01.

2. Change the rate to 10 percent when:

   • An overpaid recipient returns to current pay status following a period of ineligibility or suspension, and

   • The withholding rate established was higher than 10 percent.

2. Exceptions to Applying the 10 Percent Rate

1. Do not propose withholding when the overpaid individual is subject to the payment limit for living arrangement (FLA) D. Accept any refund(s) offered. Complete the MSSICS Overpayment Decisions (UOPD) screen by selecting RECOVER BY CHECK ADJUSTMENT. This will build a D TAC in the Overpayment Decision Date (OPDD) segment. Adjustment may begin with the first month the individual is no longer subject to the payment limitation for FLA-D. (See SM 01310.400 and SM 01311.105B.) This will also allow for the withholding of underpayments due recipients in FLA-D for months earlier than the current calendar month (to reduce outstanding overpayments). (See SM 01310.410.)

2. If recovery by adjustment is not possible, the 10 percent limitation on recovery is not applicable. Negotiate the rate of recovery through an installment agreement if no current T2 eligibility exists. (See SI 02220.025B.2.) If current T2 eligibility does exist, collection will be done through cross program adjustment. (See SI 02220.020.)

3. If the recipient requests a different - higher or lower - rate of adjustment, see SI 02220.017.

4. Propose a rate of recovery of up to 100 percent when payments were made under the conditional payment provision. (See SI 02220.017A.1.e. and SI 01150.203A.2.h.) Negotiate a lesser rate when appropriate.

5. Recover at the rate of 100 percent when:

   • Offsetting because burial funds were used for another purpose (SI 01130.410G., SI 01130.410C.5. and SM 01311.310).

   • OI or DOJ has determined that the overpayment was the result of fraud (SI 04070.020 and GN 04123.005).

   • If the CR or higher makes a determination that similar fault, misrepresentation or concealment of material information was committed by the SSI individual or his/her deemor, see GN 04060.055 and SI 04070.020.

     This determination must be a formal written determination prepared by a CR or higher. Consider all the factors listed in SI 02260.010 and SI 02260.015 in making your determination.

     Prepare a written notice of your determination including appeal rights since this is an initial determination. Send the notice to the overpaid individual and allow for the 60–day appeal period before beginning collection. (See SI 04010.010.)

     For DCN overpayments, see SI 02260.030C.5.

     If the Treasury has determined that the individual cashed both the original payment and the replacement payment, you may recover the double check negotiation at a rate of up to 100 percent. See SI 02220.016A.2.e., third bullet.

   • Recovering a Civil Monetary Penalty (CMP) (GN 02604.425).

6. Notification

   • Notify the individual in a Notice of Planned Action that the overpayment rate will be at the 100 percent rate and explain that this rate is due to the fact that the overpayment was created by the “willful misrepresentation of a material fact,” and

   • Increase the rate/proposed rate to 100 percent.

NOTE: Collect penalty deductions (but only if an overpayment is not being collected at the same time SM 01311.305 and MSOM BUSSR 004.016).

B. Procedure

1. Computing the Proposed Rate of Adjustment

1. For an individual, the initial overpayment notice (AONS or manual) proposes a rate of adjustment of the monthly SSI checks which is the lesser of:

   • 10 percent of the sum of:

   The recipient's countable income used to compute the current payment; and

   The Federal and State amounts due the recipient for the current computation month (CCM),

   OR

   • The recipient's actual payment amount.

   See SI 02005.001 for an explanation of what income is used in the payment computation.

2. For a member of an eligible couple, propose a rate of adjustment of the monthly SSI check which is the lesser of:

   • 10 percent of the sum of:

   One-half of the couple's countable income used to compute the current payment; and

   The Federal and State amounts due the overpaid member of the couple for the CCM,

   OR

   • The actual payment amount for the member of the couple.

   Use this computation to calculate the proper adjustment rate whether one or both members of the eligible couple are overpaid.

   NOTE: In spouse-to-spouse deeming, the computation compares the payment the person would be due with no spouse, and the payment the person and spouse would be due as an eligible couple. The 10 percent recovery limit changes as the basis for payment changes from “individual computation” to “couple computation.” This policy can produce unusual swings in the rate of recovery, especially when the Livermore rules apply. (See SI 01320.430.)

3. In both an individual and a couple case, the budget month income will not equal the income used to compute the month's benefit when:

   • COLA coordination applies. (See SI 02005.010);

   OR

   • Prospective accounting for certain income based on need applies (SI 02005.025).

C. Examples

1. Individual in FLA-A

Ms. Doze is due a Federal SSI payment of $452.00 for August 2003. The countable income used to compute the payment is $100.00. The proposed recovery rate is 10 percent of the FBR ($552) for 2003.

2. Individual Subject to the VTR (FLA-B)

Mr. Shaw is in FLA-B, subject to a one-third reduction (VTR) of $184.00. He is due a SSI payment of $368.00 for August. The proposed recovery rate is 10 percent of $552.00.

3. Individual's SSI Payment is Less Than the 10 Percent Rate

Mr. Acuna is due a Federal SSI payment of $50.00 for August 2003 based on the budget month's countable income of $502.00. Since 10 percent of the sum of the countable income and the amount due exceeds the SSI payment, the proposed reduction rate will be $50.00 (the entire SSI payment).

4. Eligible Couple

Mr. and Mrs. Boswell are considered an eligible couple for SSI. In August 2003, each is due a Federal SSI payment of $285.50, and a federally administered optional State supplement of $37.00. Each has an outstanding overpayment. The proposed monthly recovery rate cannot exceed $46.30 each.

5. 100 Percent Withholding Case

The following is an example of a case where the 100 percent withholding rule applies. NOTE: The 100 percent withholding rule is not limited to DCN cases.

Mr. Jones alleges non-receipt of his June 2002 SSI check of $545.00. A replacement check is issued. Treasury determines that he endorsed both checks, and an automated SSI overpayment notice is sent explaining that we will begin withholding $54.50 per month to recover the overpayment through check adjustment. Several weeks later, the DO receives from Treasury a “check package” which has photocopies of both checks cashed by Mr. Jones. The DO sends a manual Notice of Planned Action (NPA) explaining that we have made a determination that the overpayment created by cashing two SSI checks was the result of willful misrepresentation of a material fact. The NPA further explains that because of willful misrepresentation, we will recover the overpayment by withholding 100 percent of the SSI check (or the remaining OP amount if less) from the MM/YY SSI check.