Author: Attorney Desk Reference Manual
Last updated: December 2004

Generally
Waiver and Appeal Process
Amount of Recovery

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Generally

SSA defines an overpayment as an amount in excess of the amount actually due for any period.

The first questions are whether the recipient was in fact overpaid, and whether the calculation of the amount of the overpayment by SSA is correct.

Appeal v. Waiver

Appeal: If there was no overpayment or the overpayment is overstated, the recipient should file an appeal contesting the allegation of the overpayment.  Such as appeal must be filed within 65 days of the notice of overpayment, unless the recipient can show good cause for later filing.  Important Note: Filing a reconsideration or waiver within 30 days will prevent recoupment until an initial decision is made.

Waiver: Whether or not the recipient agrees that there was an overpayment, the recipient should request a waiver of collection of the overpayment by SSA if s/he can argue s/he did not cause the overpayment and does not have enough money to pay it back.  If a waiver is granted to the person overpaid, the debt is eliminated entirely.

For those disagreeing with the allegation of overpayment, or SSA's calculation of the amount of the overpayment, it is usually best to file an appeal and a request for waiver.  SSA must stop recovery of any benefits when a waiver is requested, until a decision is issued after a personal conference.  The personal conference is a hearing of sorts, described below.  If, however, an appeal only is filed, without a request for waiver, SSA may recoup benefits after it has conducted a paper reconsideration review.

RSDI Standard

Standard for Waiver of Title II Disability Overpayment (20 CFR §404.506):

• The recipient was without fault in creating the overpayment; and
• Recovery of the overpayment would either defeat the purpose of Title II of the Social Security Act or be against equity and good conscience.  The defeat the purpose standard focuses on whether the individual can afford to pay back the overpayment.  20 CFR § 404.508.

SSI Standard

Standard for Waiver of SSI Overpayment (20 CFR §416.550):

The recipient was without fault in creating the overpayment AND recovery of the overpayment would either:

• Defeat the purposes of Title XVI of the Social Security Act (this is presumed if the claimant is currently receiving SSI benefits - 20 CFR §416.553(b)); OR
• Be against equity or good conscience; OR
• Impede the efficient administration of Title XVI because of the small amount involved.

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Waiver and Appeal Process

Notice

When SSA discovers an overpayment, it must send a notice of overpayment that includes the following:

• The amount of the overpayment and a description of how and when it occurred;
• A request for a full, immediate refund;
• How the recipient's ongoing benefits will be affected if the recipient does not make full payment within 30 days of receipt of the notice;
• An explanation that the recipient can request a lesser withholding amount when SSA proposes to withhold the full amount of monthly benefits;
• An explanation of the right to request waiver, and the waiver process;
• An explanation of the right to request reconsideration of SSA's determination that an overpayment in fact occurred and/or the amount of the overpayment claimed;
• A statement that SSA office will help the person complete and submit the forms for appeal and/or waiver.
• A statement that the person who receives such a notice should notify SSA promptly if reconsideration, waiver, a lesser rate of withholding, repayment by installment or cross-program adjustment is wanted.

Included with the notice should be SSA pamphlet SSA-3105 "Important Information About Your Appeal and Waiver Rights," which includes a tear-off form to request appeal and/or waiver.

Aid Pending

If the individual who receives an overpayment notice appeals or requests waiver within 30 days of the date of the notice, SSA must take action to ensure that ongoing benefit payments are not interrupted.  However, any time a waiver is requested, SSA must stop adjustment or recovery from benefits.

When the individual requests waiver, s/he completes a waiver questionnaire to support the claim that s/he is without fault in causing the overpayment and that recovery of the overpayment would either cause financial hardship or would be contrary to the Social Security Act.  SSA (usually the local office) then reviews the questionnaire and the information it has and determines whether to approve waiver.

Reconsideration

File Review and Personal Conference

If SSA does not approve the waiver, it sends notice of the date, times and places for a file review and personal conference with a SSA representative.  At the file review, the individual, with or without a representative, has the right to review the claims file and applicable law with the SSA claims representative. It must be at least 5 days before the personal conference.  SSA will provide copies of file documents the recipient requests.

At the personal conference, the recipient is given the opportunity to:

• Appear personally (in fact, the person seeking review must appear personally) and testify, cross-examine and present arguments;
• Be represented by a lawyer or other person;
• Submit evidence in support of his or her claims.

The SSA decision-maker presiding at the personal conference must:

• Not have been previously involved with the issue under review, and tell this to the recipient;
• Base his or her decision solely on the evidence presented or reviewed at the conference, and tell this also to the recipient;
• Allow the individual and his or her representative to question each witness, and present evidence and arguments;
• Explain that a decision will be made and the recipient will be notified in writing;
• Explain the further appeal rights.

The notice of decision must set out the findings of fact and conclusions in support of the decision to approve or deny waiver, and contain an explanation of further appeal rights.

If SSA denies waiver after a personal conference, withholding of benefits begins even if the recipient seeks further appeal.

Under SSA's rules, if an individual fails to appear at a personal conference, a second conference is scheduled.  If the individual fails to appear at a second scheduled conference, the decision is based on the evidence in SSA's records.

ALJ Hearing

Although the decision after a personal conference is considered by SSA as an "initial decision" the next step in the appeal process is an ALJ hearing.  The individual has 60 days (plus a five day mailing grace period) to make the request for an ALJ hearing.

If the individual had rejected the offer of a personal conference and files an appeal, the first step is a paper review under the SSA reconsideration step.  The same 60 (65 with mailing) day deadline applies.  If reconsideration is denied, the individual may request a hearing before an ALJ.

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Amount of Recovery

SSI

SSA Recovery Rate is limited to the lesser of 10% of the individual's countable income or monthly SSI benefit (unless the individual willfully withheld information, committed fraud, or agrees to a greater monthly recoupment rate).

RSDI

SSA will take the entire monthly RSDI benefit unless the recipient enters into a repayment agreement which will pay off the overpayment within 3 years.  SSA may extend the 3 years in cases of severe hardship.

Other Methods of Recovery

• Retroactive Benefits Can Be Offset - Entire Title II underpayment can be used to offset a Title II overpayment.  Up to 50% of a SSI underpayment can be used to offset an SSI overpayment.
• Tax Refund Offset - can be used to recover SSI or Title II overpayments if the individual is no longer receiving these benefits, the overpayment occurred when the individual was over 18, and other attempts at collection have failed.
• Administrative Offset- other federal benefits can be offset to collect a Title 2 or SSI overpayment.  (Note: Title 2 benefits can also be reduced to collect other federal debts such as a Food Stamp overpayment or defaulted student loan.  The first $750 per month of any federal benefit is exempt.  After that, the amount withheld is the lesser of : (i) the amount owed; (ii)15% of the monthly benefit ; (iii) the amount by which the benefit payment exceeds $750.  31 U.S.C. 3716.)

Note: As a last resort, bankruptcy can discharge an overpayment, and prevent any additional recovery.

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