TN 14 (04-15)
SI 02260.025 SSI Overpayment Recovery is Against Equity and Good Conscience
Social Security Act §1631(b)(1)(A)
20 C.F.R §416.554
A. When Supplemental Security Income (SSI) overpayment recovery is against equity and good conscience
Recovery is against equity and good conscience when:
A recipient relying on payments, or notice that such payments would be made, relinquished a valuable right or changed his or her position for the worse; or
A contingently liable spouse was living in a separate household from the overpaid spouse at the time of the overpayment event, and did not receive the money that resulted in an overpayment. For information about contingent liability policy for SSI eligible couples, refer to SI 02260.025C.1.
B. What it means to relinquish a valuable right or change position for the worse
The following information describes what it means for a person to have relinquished a valuable right or changed his or her position for the worse:
Relinquishing a valuable right
The recipient gave up or declined a valuable privilege, claim, entitlement, or benefit having monetary worth due to receipt of the overpaid SSI benefits, or, a notice that we were going to make such payment. A recipient relinquishes a valuable right when he or she declines or divests him or herself of something that he or she would have pursued were it not for receipt of the overpaid SSI benefits.
Example 1 of relinquishing a valuable right:
A recipient declined a meal from a soup kitchen because she used her SSI payment, including the overpaid monies, to purchase food.
Example 2 of relinquishing a valuable right:
A recipient passes up lodging in a charitable organization’s homeless shelter because he used his SSI payment, including the overpaid monies, to rent an apartment. If we were to collect the debt, the recipient would no longer have sufficient income to continue paying rent and may have missed the chance to secure other shelter.
Change of position for the worse
A recipient is left in a worse financial position after overpayment recovery than prior to the receipt of the overpaid benefits because the recipient reasonably relied on the amount of benefits, including the overpaid monies, to his or her detriment. To establish a change in position for the worse, the recipient must show that he or she spent the SSI benefits in a way he or she would not have but for the receipt of the overpaid benefits, not simply that he or she has spent the amount received.
Example of change of position for the worse:
A recipient purchases a residence because he could afford the residence based on the amount of the SSI benefit at that time. The recipient relies on the amount of the benefit, including the overpaid monies, to meet his financial commitment and is unable to withdraw from the commitment without incurring significant financial loss. In this scenario, the recipient changes his position for the worse as he purchased the residence on the basis of the SSI benefit amount at that time. The agency has now corrected his payment amount and would reduce it further if we collect the debt.
Consider the following when determining if the recipient relinquished a valuable right or changed his or her position for the worse:
Due to receipt of the prior SSI benefit amount, did the recipient miss an opportunity he or she would not otherwise have missed if the benefit amount was lower?
Due to receipt of the prior SSI benefit amount, did the recipient acquire something that he or would not otherwise have acquired if the benefit amount was lower?
Will criminal or civil actions result if the recipient is unable to maintain a financial obligation (e.g. mortgage, loan etc)?
To develop this waiver provision and obtain instructions for completing form SSA-632-BK (Request for Waiver or Overpayment Recovery or Change in Repayment Rate), see SI 02260.005.
NOTE: Financial information, in Section II of the SSA-632-BK is not required for a finding that the individual “relinquished a valuable right” or “changed his or her financial position for the worse.” For more information on when recovery is against equity and good conscience, see GN 02250.150.
C. Against equity and good conscience for SSI eligible couples
1. A contingently liable spouse
When a recipient and his or her spouse receive SSI payments during the same period and an overpayment results, each spouse is individually responsible (liable) for repayment of his or her own overpayment as well as for the other spouse’s overpayment. Both members of a couple are liable for overpayments that occur during the month of separation. However, if a spouse did not benefit from the overpayment, it is against equity and good conscience to attempt recovery of that portion of the overpayment not received by the contingently liable spouse when the overpayment event occurred after separation but while they were an eligible couple.
2. Repayment by a contingently liable spouse
If recovery is not possible from the spouse who caused the overpayment, hold the contingently liable spouse responsible for repayment. If the contingently liable spouse is without fault and the overpayment happened after separation, waive recovery of the portion of the overpayment that the contingently liable spouse did not receive.
Regular waiver rules apply for the amount of the overpayment that the contingently liable spouse did receive. For basic requirements concerning SSI overpayment waivers, see SI 02260.001. For information regarding overpayment waiver for an SSI couple, see SI 02201.022A.3.
See the following examples where we may determine that overpayment recovery is against equity and good conscience. These examples are just for consideration and they may not fit every case:
We notified Mr. Brown that he was eligible for SSI payments. He signed a lease on an apartment that will require him to pay more rent than he previously paid. Upon further review, we discovered that Mr. Brown should not have received SSI and now he is overpaid.
Mr. Brown filed a request for a waiver. We determined he was without fault in causing the overpayment.
We may grant a waiver. Recovery of Mr. Brown’s overpayment would be against equity and good conscience.
Justification: Mr. Brown relied on SSI payments and changed his financial position for the worse.
Mr. and Mrs. Washington received SSI as an eligible couple. The Washington’s began living apart on September 2, 2013. On September 28, 2013, Mrs. Washington won $4,000 in the lottery and failed to report her winnings to us.
In 2014, through an IRS interface, we discovered that Mrs. Washington won $4,000. We overpaid Mrs. Washington for the month of September 2013. In addition, she has excess resources and is ineligible for continuing SSI payments starting in October 2013.
Mr. Washington received an SSI overpayment notice based upon Mrs. Washington’s September 2013 lottery winnings.
Mr. Washington filed a waiver request. We determined he was without fault in causing the overpayment.
We may grant Mr. Washington’s waiver request. Recovery of the overpayment is against equity and good conscience.
Justification: Mr. Washington was living in a separate household from Mrs. Washington when she won the lottery. He did not receive the lottery money.
John receives SSI payments. He chose not to take advantage of a private charity and relied on his SSI payments to support himself. We later notified him that he was overpaid SSI benefits because we did not timely process his pay slips and post the verified earnings to his record in time to preclude him from being overpaid.
John filed a request for a waiver. We determined he was without fault in causing the overpayment.
We may waive John’s overpayment. Recovery of his overpayment is against equity and good conscience.
Justification: John relinquished a valuable right to receive assistance from a charitable organization because he relied on his SSI payments to support himself.
Mr. and Mrs. Smith separated on July 3, 2013. On July 15, 2013, Mr. Smith started working, which resulted in an overpayment. Mr. and Mrs. Smith are both liable for repayment, as they were an eligible couple in the month of July 2013.
Mrs. Smith filed a waiver request. We determined she was without fault in causing the overpayment.
We may grant Mrs. Smith’s waiver request. Recovery is against equity and good conscience.
Justification: Mrs. Smith was living in a separate household when Mr. Smith started working.
D. Examples of when the criteria for against equity and good conscience are not met
The following are some examples of situations where the recipient does not meet the criteria for against equity and good conscience:
The recipient will not be able to continue his or her membership at a fitness club or gym;
The recipient will have to send his or her minor child to public school, instead of a private school, which requires tuition;
The recipient will not be able to continue ordering clothing and household goods from an online retailer;
The recipient made a non-refundable deposit on an expensive vacation.
GN 02250.150 Against Equity and Good Conscience
SI 02260.001 Basic Requirements Concerning SSI Overpayment Waiver
SI 02260.005 Completing the SSA-632-BK (Request for Waiver of Overpayment or Change in Repayment Rate)
SI 02201.022 SSI Responsibility – Eligible Couple Cases