SI 02220: Recovery Procedures for Supplemental Security Income Overpayments
TN 33 (03-07)
A. Policy
1. Authority for Cross-Program Recovery
Section 1147 of the Social Security Act describes the authority to collect overpayments through “cross-program recovery.”
a. The Old Cross-Program Recovery Provision
Prior to the passage of the Social Security Protection Act of 2004, SSA had limited authority to collect overpayments by cross-program recovery. Under this authority, we had been collecting:
An SSI overpayment from Title II benefits, but only if the person was no longer eligible for SSI; and
An SSI overpayment from Special Veterans Benefits (SVB) (to receive SVB, the person must be living outside the United States and thus ineligible for SSI). See VB 00102.000 for SVB qualifications.
b. The New Cross-Program Recovery Provision - Effective January 3, 2005
The Social Security Protection Act of 2004 expanded the authority for cross-program recovery under section 1147 of the Social Security Act. The authority is broad, and we will not be implementing all aspects of this authority at one time. We will implement the expanded authority as it becomes administratively feasible to do so.
The provision covers benefits under Title II, SSI, and SVB. It gives SSA the authority to recover an overpayment in any of these three programs from benefits payable from any of these three programs. We are authorized to recover an overpayment by adjusting monthly benefits (generally, limited to 10% of the monthly benefit), and by recovering from any underpayments due the debtor (without limitation). We are authorized to recover an overpayment from benefits in another program even if the person continues to receive benefits from the program in which he/she was overpaid.
c. Cross-Program Recovery under the Expanded Authority
When a person is ineligible for SSI, we will continue to collect SSI overpayments from monthly Title II benefits as described in SI 02220.020. We will continue to collect SSI overpayments from SVB benefits as described in VB 02020.005. We will collect SSI overpayments from Title II underpayments.
If the person remains eligible for SSI, we will not impose cross-program recovery against the ongoing monthly Title II benefits. However, we will continue to collect from SSI benefits any SSI overpayment balance that remains after the collection from the Title II underpayment.
2. Criteria for Cross-Program Recovery
a. When to Impose Cross-Program Recovery
Following is when to impose cross-program recovery:
To impose cross-program recovery against the Title II underpayment otherwise due, we must have notified the person about the SSI overpayment, and decided to collect it;
It does not matter if the person is already repaying the SSI overpayment by monthly SSI payment adjustment, or by monthly installment refunds. Impose cross-program recovery against the Title II underpayment.
b. When Not to Impose Cross-Program Recovery
Following is when not to impose cross-program recovery:
The person is an Ellender class member. The Ellender court case is a class action suit brought in the early 1980s regarding SSA's use of voluntary cross program recovery in the State of New York. As a result of settlement activity in the Ellender case, SSA agreed not to impose cross-program recovery against people who meet the criteria. See SI 02220.021C.4. for the criteria for inclusion in the Ellender class.
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The person has a pending waiver or reconsideration request regarding this overpayment.
NOTE: Although cross-program recovery is not imposed when a waiver or reconsideration request is pending, cross-program recovery is imposed when an appeal is pending at the hearing level, appeals council level, etc. See SI 02260.001A.4, SI 02220.017A.4., and SI 02220.017A.6. These sections explain the effect of a request for waiver, or reconsideration, or a reconsideration of a waiver denial, on overpayment recovery.
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SSA receives a bankruptcy petition that names the SSI debtor.
As a result of systems enhancements in mid-November 2006, two exclusions to cross-program recovery have been lifted:
Previously we were not imposing cross-program recovery if SSA was recovering a Title II overpayment by adjusting Title II benefits. This restriction has been lifted. Now, if SSA is recovering a Title II overpayment by adjusting Title II benefits and an underpayment is detected, after recovery of the Title II overpayment, any remaining Title II underpayment will be applied towards the recovery of a Title XVI overpayment.
Previously we were not imposing cross-program recovery if the beneficiary was not in current pay status on Title II. This restriction has been lifted.
3. Reduction of Title II Benefits and SSI Eligibility
Cross-program recovery against Title II benefits (monthly benefits or underpayments) does not reduce the amount of the person’s countable income for SSI eligibility and payment purposes. See SI 00830.110 for the “double counting” exception.
4. The Sequence: Attorney Fee - Windfall Offset - Overpayment Recovery
See GN 02610.053, and SI 02006.200 through SI 02006.210. If there is an attorney fee to be paid from the Title II underpayment, this amount is subtracted from the Title II underpayment before the windfall offset (“Title II/Title XVI offset”) amount is subtracted. Overpayment recovery from the remaining Title II underpayment comes after those deductions.
Typically, the Processing Center withholds 25% of past-due Title II benefits for direct payment to the attorney. The amount withheld for the attorney fee is included in the expenses that reduce retroactive Title II income in the SSI computation.
B. Examples
The example in SI 02220.021B.1. shows windfall offset and cross-program recovery. The example in SI 02220.021B.2. shows payment of an attorney fee, windfall offset, and cross-program recovery.
1. Windfall Offset and Cross-Program Recovery
A person is due a Title II underpayment of $10,000 based on a recent Title II claim. She has an SSI overpayment of $2,900. We apply windfall offset and cross-program recovery as follows:
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Windfall Offset Reduction
Title II retroactive money =
$10,000
Title II retroactive money due in the offset period (total type W unearned income) =
$ 8,000
Windfall offset amount (Windfall Federal Offset + Windfall State Offset) =
$ 7,000
Noncountable income (NCI) (#2 - #3) =
$ 1,000
Countable income (retroactive Title II income outside the offset period) (#1 -#2 ) =
$ 2,000
Total Title II payable, after windfall offset but before overpayment recovery (#4 + #5) =
$ 3,000
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Overpayment Reduction
Overpayment amount to be applied by cross-program
recovery =
$ 2,900
Total Title II payable, after we make overpayment recovery (#6 -#7) =
$ 100
NOTE: Although the person receives only $100 in retroactive Title II benefits (#8), the countable income remains at $2,000 (#5). This is because overpayment recovery cannot cause the person to become eligible for SSI or to be due additional SSI benefits.
2. Payment of an Attorney Fee, Windfall Offset, and Cross-Program Recovery
A person is due a Title II underpayment of $16,000 based on a recent Title II claim. She has an SSI overpayment of $2,900. We apply payment of the attorney fee, windfall offset, and cross-program recovery as follows:
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Windfall Offset Reduction
Title II retroactive money =
$16,000
Fee amount (25% of #1) =
$ 4,000
Title II income (#1 - #2) =
$12,000
Title II retroactive money due in the offset period (total type W unearned income) =
$ 8,000
Windfall offset amount (Windfall Federal Offset + Windfall State Offset) =
$ 7,000
Noncountable income (NCI) (#4 - #5) =
$ 1,000
Countable income (retroactive Title II income outside the offset period) (#3 - #4 ) =
$ 4,000
Total Title II payable, after the attorney fee, and after windfall offset, but before overpayment recovery (#6 + #7) =
$ 5,000
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Overpayment Reduction
Overpayment amount to be applied by cross-program
recovery =
$ 2,900
Total Title II payable, after we make overpayment recovery (#8 -#9) =
$ 2,100
NOTE: Although the person receives $2,100 in retroactive Title II benefits (#10), the countable income remains at $4,000 (#7). This is because overpayment recovery cannot cause the person to become eligible for SSI or to be due additional SSI benefits.
C. Procedure
1. Systems Enhancements in November 2006
As a result of systems enhancements in mid-November 2006, it is no longer necessary to post a K TAC to the supplemental security record (SSR) prior to initiating an automated or manual windfall offset computation. Cross-program recovery will occur automatically without the K TAC present on the SSR.
2. Notices
A Title II notice is issued that explains that an SSI overpayment is being recovered from a Title II underpayment.
The notice tells the person:
He/she still has an SSI debt;
The amount of the debt;
The amount of the Title II benefit reduction;
The amount of the Title II benefit left after the reduction is taken;
That he/she can request review and provide evidence showing that the debt is no longer owed or the amount of the debt is different than that stated in the notice; and
He/she can request waiver.
See the notice exhibits in NL 00703.183, “Cross-Program Recovery Notices.”
3. Installment Requests
Do not accept installment agreements when cross-program recovery is available.
4. Ellender Court Case
The Ellender court case is a class action suit brought in the early 1980s regarding SSA's use of voluntary cross-program recovery in the State of New York. As a result of settlement activity in the Ellender case, SSA will not impose mandatory cross-program recovery against people who:
Lived in the State of New York on October 26, 1982; and
Were receiving Title II benefits on October 26, 1982; and
Were former SSI recipients on October 26, 1982; and
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Received an SSI overpayment before October 26, 1982.
If the debtor alleges he/she is a member of the Ellender class, take the actions described in SI 02220.020D.10.
5. Person Alleges He/She Does Not Owe the Debt or Owes a Different Amount
The notice about the cross-program recovery gives the debtor the opportunity to request a review 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. The evidence can be a cancelled check, remittance receipt from SSA, an acceptable document showing the debt was waived or other valid document.
IMPORTANT: The determination on the debtor's request for review is a reconsideration determination. Therefore, the notice that SSA sends to the debtor must include language explaining the right to a hearing before an administrative law judge.
See MSOM BUSSR 002.007, Appeals Process, in Direct SSR Update.
a. Amount of Overpayment Shown is Correct
If the amount of the overpayment shown on the notice is correct:
Notify the person in writing that after review of the evidence, the amount shown on the notice is correct.
b. Debt No Longer Exists
If the debt no longer exists (e.g., was waived, repaid, discharged in bankruptcy):
Notify the person in writing that the debt no longer exists;
Correct the systems records to show that the debt was paid in full or no longer exists; and
Refund the incorrectly recovered money. See SM 00616.005B. and SM 00616.017C.
c. Amount of Overpayment Shown is Incorrect
If the amount of the overpayment shown on the notice is incorrect:
Notify the person in writing of the correct amount of the debt;
Correct the systems records to show the correct amount; and
Refund any incorrectly recovered money. See SM 00616.005B. and SM 00616.017C.
d. Person Requests Reconsideration of the Fact or Amount of the Original Debt (Overpayment Determination)
Some debtors may still request reconsideration of the overpayment determination. Accept form SSA-561 (Request for Reconsideration) or equivalent when the debtor asks for reconsideration of the fact or amount of the original overpayment. See the procedures in SI 02220.020D.7 and SI 02220.020D.8.
e. Person Requests Waiver
The notice that tells the person about the proposed cross-program recovery explains waiver rights. The person may request waiver at any time. If he/she requests waiver, obtain an SSA-632-BK (Request for Waiver of Overpayment Recovery or Change in Repayment Rate) and adjudicate the waiver request per instructions in SI 02260.001.
If the decision is to approve waiver of overpayment recovery, refund any incorrectly recovered money. See SM 00616.017C.