Overpayments and SSDI and SSI Benefits ytiONLINE @ 2019 2.1 Disability, Workplace, and Employment Support Practice Online Professional Development Courses and Certificate and Credentialing Programs 2
Today’s Class • What is an Overpayment and how does one occur? • Reconsideration vs. Waiver of Overpayment • Requesting Reconsideration • Requesting a waiver • Administrative Waiver • What if I lose? 3
Overpayments • Overpayments occur when a beneficiary has received more benefits than she was entitled to receive. • “An overpayment is the total amount an individual received for any period which exceeds the total amount which should have been paid for that period.” • POMS GN 02201.001, 20 C.F.R. 416.537 4
Common Ways That Overpayments Occur • SSDI Work-Related Cessations • SSDI Medical Cessations • SSI Excess Resources • SSI Excess Earned Income • Failure to report income or resources 5
Overpayments and Work • For many reasons, we must expect that our customers who return to work, or enter the workforce for the first time, will be assessed an overpayment. • Preparing our customers for this eventuality will go far in encouraging their work effort. • Use of the SSA “call in” system and My Social Security Account to report wages may minimize overpayments. 6
Who Can be Held Liable for an Overpayment? • The beneficiary • The eligible spouse • Auxiliary beneficiaries • The estate of a deceased beneficiary or spouse • An immigrant’s sponsor • A representative payee–only if SSA has determined that the benefits were “misused” 7
Reconsideration vs. Waiver: The Great Debate 8
Reconsideration • Used to challenge the fact of and/or amount of an overpayment. • Must be filed within 60 days of receipt of the notice. • The 5-day mailing assumption applies. 9
Reconsideration (continued) • Use the standard reconsideration form (SSA-561-U2) or submit a letter challenging the amount or the existence of overpayment to SSA. • Work-related overpayments almost always require a request for reconsideration as SSA field offices do not always know about or process all possible work- related deductions from earned income, i.e., Subsidies, IRWEs. 10
Reconsideration (continued) • Recoupment efforts can begin 30 days after the notice of overpayment is received, but must cease once a request for reconsideration has been filed and must not be reinstated until SSA issues a decision. • Following reconsideration, the challenge to the fact of and/or amount of the overpayment will follow the standard administrative appeal process. 11
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Use of Reconsideration • Reconsideration should be used to correct any errors in the amount of overpayment assessed to a beneficiary, to apply IRWEs/subsidies, etc., and to correct wage information. • SSA should be seen as a creditor at this point and your efforts should be treated like any other effort to correct a bill you receive! Polling Question 1 13
WAIVER OF RECOUPMENT OF AN OVERPAYMENT 14
Waiver of Recoupment • Used when an overpayment exists but the consumer states that it wasn’t their fault and they cannot pay it back or it would be unfair to pay it back. • There is no 60-day limitation to consider when filing a request for waiver of recoupment of an overpayment. • As a result, the beneficiary can feel comfortable processing a Request for Reconsideration to correct the debt before requesting waiver. • Why would anyone not try to waive an amount not actually owed? It stays on your “permanent record”! • Request for waiver of overpayment recovery or change in repayment rate form (SSA-632-BK). 15
Requirements for Waiver 1. The beneficiary must be without fault , AND 2. The beneficiary must be unable to afford to repay without risking the ability to provide for basic needs, or , recovery of the overpayment would be against equity and good conscience. 16
Waiver SPECIAL NOTE: SSI beneficiaries are assumed to be unable to afford to repay an overpayment and, as a result, will not be required to complete any of the financial portions of SSA-632-BK. The only issue in an SSI related overpayment is FAULT. 17
SA-632-BK: Page 1 18
SA-632-BK: Page 2, Section 1 – Information about Receiving the Overpayment 19
SSA-632-BK: Page 6, Monthly Household Expenses 20
Waiver • Filing a waiver request will also prevent all recoupment efforts by SSA if filed within 30 days of the notice of overpayment. If filed later, recoupment will also stop and no further adjustment can occur until a decision is issued. • Once the request for a waiver has been filed, recoupment can begin only after the claimant has been given an opportunity for an oral meeting and the waiver request has been denied. • This is normally provided only when SSA plans to deny the waiver application. 21
Fault The first part of the two-part waiver test involves a determination of “fault.” If the beneficiary is determined to be “at fault”, the overpayment must be repaid. The ability to repay becomes irrelevant. 22
Fault (continued) The regulations, at 20 C.F.R. 404.507 & 416.552, state that “fault” will be found if the beneficiary: • Failed to furnish information which s/he knew or should have known was material; or • Made incorrect statements which s/he knew or should have known were incorrect; or • Did not return a payment which s/he knew or could have been expected to know was incorrect. Polling Question 2 23
Circumstances That Must be Considered When Determining “ FAULT” When evaluating “failure to report”, “without fault”, “good cause”, and “good faith” on the part of the beneficiary seeking a waiver, “all circumstances” must be considered by SSA, including the beneficiary’s: • Disability • Age • Education • Comprehension of reporting requirements 24
Ability to Pay The ability to repay is the first alternative to the second, and mandatory, waiver eligibility test. 25
Inability to Repay • If the beneficiary receives SSI or other “needs based” welfare benefits, SSA will assume that recovery of the overpayment will “defeat the purposes of the act.” Such a beneficiary is assumed to be unable to repay. Fault is the only issue. • For Title II beneficiaries, SSA must consider a monthly budget picture. If the beneficiary uses substantially all of his or her monthly income to meet “ordinary and necessary living expenses” then the inability to repay will be found. 26
Inability to Repay (continued) • If the beneficiary retains any of the overpaid funds, recovery of these funds will not defeat the purpose of the act. • These funds must be returned to the field office and will be used to reduce the outstanding balance. Polling Question 3 27
“Against Equity and Good Conscience” • Waiver will be granted where the beneficiary is without fault, AND • Recovery of the overpayment would be “against equity and good conscience.” 28
“Against Equity and Good Conscience” (continued) • SSA interprets this very narrowly—did the beneficiary relinquish a valuable right relying on the overpayment? • However, the notion of basic fairness must and should be considered. • MONEY/RESOURCES DON’T MATTER!!! 29
Pre-Recoupment Hearing Regulation • Individuals seeking a waiver will have the right to an oral, pre-recoupment hearing prior to SSA’s denial of a waiver request. • “ Oral hearings ” can take place via telephone or video conference. • Applies to BOTH Title II and SSI waiver requests. • 20 CFR 404.506 & 416.557 30
Administrative Waiver If the overpayment is $1,000.00 or less AND a waiver or appeal is requested, SSA can “ administratively” waive the overpayment as collection will “impede efficient administration” of the program. 20 CFR 416.555, POMS SI 02260.030 31
Administrative Waiver If the overpayment was the result of excess resources totaling $50 or less and there appears to be no indication of fault, an “administrative waiver” can be granted by SSA even without a beneficiary request. 20 CFR 416.555, POMS SI 02260.035. 32
Administrative Waiver Equity and good conscience exist to waive the remainder of any SSI overpayment resulting from excess resources, once SSA has first recouped the amount of money over the resource limit. 20 CFR 416.555, POMS SI 02260.035(E) 33
What Happens Following a Final Unfavorable Decision? Recovery by “adjustment of ongoing benefits” 34
Adjustment of Ongoing Benefits SSI BENEFICIARIES: “Adjustment” of ongoing benefits is limited to 10% of monthly income . Should the beneficiary be unable to meet “current and ordinary living expenses” adjustment can be reduced to less than 10% per month. 35
Adjustment of Ongoing Benefits Title II BENEFICIARIES : There is no 10% limitation for Title II beneficiaries. However, individuals may request a lower rate of recoupment due to hardship. Recoupment can be as much as 100% of the monthly benefit. 36
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