TN 8 (09-05)
SI 02260.025 Policy - SSI Overpayment Waiver - Against Equity and Good Conscience
A. Policy - Basic Rule
An SSI overpayment may be waived if:
The individual was without fault in creating the overpayment (see SI 02260.010), and
Recovery or adjustment of the overpayment is against equity and good conscience.
2. When Recovery is Against Equity and Good Conscience
Recovery is against equity and good conscience when:
A beneficiary, relying on benefit payments or notice that such payments would be made, relinquished a valuable right or changed his/her position for the worse; or
A contingently liable member of an eligible couple was living in a separate household from the overpaid person at the time the event causing the overpayment occurred and did not benefit from the event.
These terms have the same meanings for title II and title XVI.
To develop this waiver provision, complete an SSA-632-BK (see SI 02260.005). NOTE: Financial information (Section II of the SSA-632-BK) is not required for a finding that the individual “relinquished a valuable right” or “changed his/her financial position for the worse.” (GN 02250.150A.2.).
B. Policy - Rule for an Eligible Couple
When an eligible couple is overpaid, each member of the couple is generally liable for the amount of the overpayment incurred by both members of the couple. The eligible individual’s overpayment may be recovered from the eligible spouse, but only when the requirements in SI 02201.020B.3.c. are met. Occasionally, the event causing an overpayment may occur after the couple is separated, yet during the period the two members are still considered an eligible couple.
2. Couple Separation Rules
a. Effective October 1, 1990
Beginning October 1, 1990 an eligible couple became eligible individuals beginning with the month following the month of separation. Eligible couple status continues through the month of separation. An overpayment event in the month of separation would create an overpayment for both members of the couple, even if the event occurred after the couple separated.
b. Prior to October 1, 1990
Prior to October 1, 1990 an eligible couple who separated continued to be considered an eligible couple for six full months following the separation. (See SI 02005.031.) An overpayment event during the 6-month period would create an overpayment for both members of the couple, even if caused by an event occurring after the couple separated.
Both members of the couple are liable for overpayments that occur during the periods described in SI 02260.025B.2. However, it is against equity and good conscience to attempt recovery of that portion of the overpayment not received by the contingently-liable spouse if the overpayment event (e.g., receipt of income) occurred after separation but while they were an eligible couple.
For an overpayment caused by an event which occurs after the separation of an eligible couple but during a period of eligible couple status, take the following actions:
a. Attempt Collection from the Overpaid Member of the Couple First
If recovery is possible from each member of the couple individually, normal overpayment and waiver rules apply. As only one member of the separated couple may have been aware of the event that caused the overpayment, it is possible that one member of the couple may be found to be at fault, while the other member of the couple is without fault.
b. Attempt Collection from the Contingently-Liable Spouse
If recovery is not possible from one member of the separated couple, we may look to the other contingently-liable spouse for repayment. If the contingently-liable spouse is without fault and the overpayment event happened after separation, waive recovery of that portion of the overpayment that the liable spouse did not receive (i.e., the portion received by his/her spouse). Recovery of this amount is against equity and good conscience. For the amount of the overpayment that the contingently-liable spouse did receive, regular waiver rules would apply. See SI 02201.020B.3.
Mr. and Mrs. Washington, members of an eligible couple, separated on September 2, 2003. Mrs. Washington continued to receive SSI benefits as an eligible individual effective October 2003. Mr. Washington became ineligible effective October 2003 because the countable portion of his Title II benefits exceeded the individual FBR. On September 28, 2003, Mrs. Washington wins $4,000.00 in the lottery. Mrs. Washington fails to report her winnings.
In late 2004, we discover Mrs. Washington’s winnings as the result of an IRS interface. Mrs. Washington is overpaid because of the income in September 2003 and because of excess resources after that time. She is currently ineligible for benefits. Because Mr. and Mrs. Washington were an eligible couple in the month of September 2003, Mr. Washington is overpaid in the month of September 2003 and is also liable for the portion of the overpayment received by Mrs. Washington’s in that month.
Mrs. Washington fails to repay her overpayment. Because Mr. Washington is the contingently-liable spouse in the month of September 2003, we consider recovering the entire amount of the September 2003 overpayment from his Title II benefits using cross-program recovery procedures. Mr. Washington files a waiver request. After determining that he is without fault in causing the overpayment, we waive the portion of the overpayment received by Mrs. Washington because recovery from Mr. Washington is against equity and good conscience. Mrs. Washington remains liable for this overpayment.
C. Policy - Excess Resources Rules
Waiver policy for SSI overpayments created because of excess resources involves the standard waiver rules (see Rule 1 in SI 02260.025C.1.) and two unique waiver rules that are only applicable to overpayments which are the result of excess resources (see Rule 2 in SI 02260.025C.2. and Rule 3 in SI 02260.025C.3.). If an overpayment is caused solely by excess resources, find “at fault” only if the individual “willfully and knowingly” failed to report excess resources as explained in SI 02260.035A.2. All or part of an SSI overpayment due to excess resources can be waived if one or more of the following waiver rules apply. These rules should be applied in the sequence presented.
1. Rule 1
The individual is without fault and recovery of the full amount of the overpayment would:
defeat the purpose of SSI (SI 02260.020); or
be against equity and good conscience due to having relinquished a valuable right or having changed a financial position for the worse (SI 02260.025A.2.); or
impede effective or efficient administration of SSI (SI 02260.030).
2. Rule 2
The individual is without fault and countable resources in any month of the period of overpayment exceed the resource limit by $50.00 or less. In this instance, waive the overpayment for all months in which resources did not exceed the limit by more than $50.00. (See SI 02260.035).
3. Rule 3
The individual is without fault and it is against equity and good conscience to recover the full amount of the overpayment because the total overpayment in months (not including months where Rule 2 resulted in a waiver) is greater than the amount by which the resources exceeded the resource limit. This is explained in SI 02260.025D.
D. Procedure - Excess Resource Overpayment
After determining that the individual is without fault (SI 02260.015), use the following steps in making a waiver determination:
Determine if the entire overpayment can be waived using Rule 1 in SI 02260.025C.1. If the overpayment can be waived in full, stop here. If not, continue with step 2.
Determine total countable resources at the first moment of each month of the overpayment period (see SI 02201.005B.3.).
Subtract the applicable resource limit from the countable resources to determine the amount of the excess resources for each month of the overpayment period.
For any month in which the amount of excess resources is $50.00 or less, waive the overpayment for that month per Rule 2 in SI 02260.025C.2. If the claimant never exceeded the resource limit by more than $50.00 during all months in the overpayment period, waive the entire overpayment and stop here. Otherwise, proceed to step 5 to consider waiver for the balance of the overpayment.
For the remaining months in which the amount of the excess resources is more than $50.00, determine which single month in the overpayment period had the largest difference between the countable resources and the resource limit applicable to that month.
If the total overpayment balance in such months is greater than the maximum amount of the excess resources determined in step 5, subtract the amount in step 5 from the overpayment balance and waive the difference. Repayment of this difference is determined to be against equity and good conscience, since the overpaid recipient who is without fault is not required to repay more than the maximum amount his resources exceeded the resource limit.
If the total overpayment balance in step 6 is less than the result from step 5, waiver under Rule 3 does not apply.
EXAMPLE: Mr. Smith sells his excluded automobile on September 10, 2004, and the proceeds of this sale cause his resources to exceed the resource limit beginning October 1, 2004. During a redetermination in February 2005, a determination is made that Mr. Smith has been overpaid during the 5-month period October 2004 through February 2005. Beginning March 2005, he is suspended for excess resources. The following chart shows his monthly SSI payments and countable resources during this period:
Mr. Smith receives an automated overpayment notice explaining that he has been overpaid $2,300.00 for the period 10/04 through 02/05. He requests waiver of his overpayment and is determined to be without fault in causing the overpayment. We determine that Mr. Smith is able to repay. In addition, he did not relinquish a valuable right or change his financial position for the worse. As a result, waiver of the entire overpayment using Rule 1 in SI 02260.025C.1. is not permitted. However, the $1,000 overpaid for the months of January and February is waived using the $50.00 waiver rule in SI 02260.035. (See Rule 2 in SI 02260.025C.2.) The remaining overpayment amount of $1,300 (paid in 10/04 through 12/04) is compared to the single month in the overpayment period which has the biggest difference between countable resources and the resource limit (i.e., $1,100 in 11/04). Thus, $200 of the total remaining $1,300 overpayment for 10/04 through 12/04 is waived under this provision. For the entire overpayment period of 10/04 through 02/05, $1,200 of the $2,300 overpayment is waived and $1100 will be recovered.
NOTE: Any overpayment waiver greater than $2,000 requires supervisory approval.