TN 17 (08-16)
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 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 position for the worse:
1. 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 the recipient declines or divests something that the recipient would have pursued were it not for receipt of the overpaid SSI funds.
a. 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.
b. 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.
2. 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 funds because the recipient reasonably relied on the amount of payments, including the overpaid monies, to the detriment of the recipient. To establish a change in position for the worse, the recipient must show that the recipient spent the SSI payments in a way that the recipient would not have but for the receipt of the overpaid funds, not simply that the recipient has spent the amount received.
a. Example 1 of change of position for the worse
James purchased a residence because he could afford the mortgage based on his SSI payment amount at the time. James relied on the amount of the SSI payment, including the overpaid monies, to meet his financial commitment and is unable to withdraw from the purchase commitment without incurring significant financial loss, and possible civil action. In this scenario, James changed his position for the worse as he purchased the residence based on his SSI payment amount at the time of the purchase. SSA subsequently corrected James’ payment amount and would reduce it further if we collect the debt.
b. Example 2 of change of position for the worse
Ron received SSI payments as a disabled child. After Ron attained age 18, SSA determined he was no longer disabled. Ron appealed the disability cessation determination and requested benefit continuation. Ron then enrolled in a technical school. Six months later, SSA upheld the disability cessation determination, resulting in an overpayment to Ron caused by benefit continuation. Ron requested we waive recovery of the overpayment. We determined overpayment recovery is against equity and good conscience because Ron changed his position for the worse by enrolling in technical school, and he depending on his SSI payments to pay tuition.
c. Example 3 of change of position for the worse
Sam received SSI payments as a disabled child. After turning 18, he rented a room in the home of another person for $500.00 per month. We conducted a continuing disability review (CDR) and determined that Sam’s disability had ceased. Sam filed an appeal and requested payment continuation. Six months later, we upheld our disability cessation determination, resulting in an overpayment to Sam, caused only by benefit continuation. Sam filed a waiver request. He changed his position for the worse because he relied on his monthly SSI payment amount to pay rent for the duration of the lease. Sam is unable to withdraw from the purchase commitment without incurring significant financial loss, and possible civil action.
3. Considerations when determining if the recipient relinquished a valuable right or changed his or her position for the worse:
Due to receipt or notification of the prior SSI payment amount, did the recipient miss an opportunity the recipient would not have missed if the payment amount were lower?
Due to receipt or notification of the prior SSI payment amount, did the recipient acquire something that the recipient would not have acquired if the payment amount were 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 the recipient’s spouse receive SSI payments during the same period and an overpayment results, each spouse is individually responsible (liable) for repayment of both overpayments. 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 membership at a fitness club or gym;
The recipient will have to send the recipient’s 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