[Federal Register Volume 61, Number 212 (Thursday, October 31, 1996)]
[Rules and Regulations]
[Pages 56126-56133]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27707]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 410

RIN 0960-AD99


Overpayment Appeal and Waiver Rights

AGENCY: Social Security Administration (SSA).

ACTION: Final rules.

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SUMMARY: In these final regulations we address the rights of 
individuals regarding overpayment and waiver

[[Page 56127]]

determinations in the Social Security and Black Lung benefits programs 
by stating policy established as a result of a series of court 
decisions, beginning with the 1974 court decision in Buffington, et al. 
v.  Weinberger and including the Supreme Court decision in Califano v. 
Yamasaki. The effect of these final regulations is to codify these 
additional rights for overpaid individuals established in these court 
decisions.

EFFECTIVE DATE: These final rules are effective December 2, 1996.

FOR FURTHER INFORMATION CONTACT: Lois Berg, Legal Assistant, 3-B-1 
Operations Building, 6401 Security Boulevard, Baltimore, MD 21235, 
(410) 965-1713 for information about these rules. For information on 
eligibility or claiming benefits, call our national toll-free number, 
1-800-772-1213.

SUPPLEMENTARY INFORMATION:

Background

    Section 204(b) of the Social Security Act (the Act) provides that 
the Commissioner of Social Security (the Commissioner) shall not 
recover an old-age, survivors, and disability insurance (OASDI) 
overpayment from any individual who is without fault in causing the 
overpayment if recovery from that individual would ``defeat the 
purpose'' of title II of the Act or be ``against equity and good 
conscience.'' Sections 205(a) and 702(a)(5) of the Act authorize the 
issuance of regulations regarding our overpayment recovery policies.
    Sections 411(b) and 426(a) of the Black Lung Benefits Act (30 
U.S.C. 921(b) and 936(a)), authorize the Commissioner to issue 
regulations to administer the provisions of the Black Lung benefits 
program. The provisions for recovery of an overpayment from an 
individual under the Black Lung benefits program (Part B) regulations 
generally parallel the regulations of the OASDI programs.
    On October 22, 1974, the U.S. District Court for the Western 
District of Washington in Buffington, et al. v. Weinberger, No. 734-
73C2, stopped SSA from recovering overpaid Social Security benefits 
without first giving each member of the plaintiff class adequate 
written notice of the overpayment determination and the right to a pre-
recoupment hearing.
    The court ordered that the written notice must include:
    1. A statement of the alleged overpayment, an explanation of the 
basis for the overpayment and SSA's proposed action to recover the 
overpayment;
    2. A statement of the individual's right to a pre-recoupment 
hearing;
    3. Instructions and forms for requesting a pre-recoupment hearing;
    4. An explanation that if the individual did not request a pre-
recoupment hearing within 30 days of the date of mailing of the 
overpayment notice, it would be presumed that the individual waived 
his/her right to the hearing and recovery of the alleged overpayment 
would begin;
    5. A statement of any other administrative relief available (i.e., 
reconsideration of the fact and/or amount of overpayment and waiver of 
recovery of the overpayment); and
    6. A statement that an SSA office would help the individual 
complete and submit forms for appeal or waiver requests.
    The court also ordered the following:
    1. SSA had to restore all benefits withheld from the named 
plaintiffs pending an opportunity for a pre-recoupment hearing.
    2. Each individual had to be given the opportunity to examine his/
her claims file at least 5 days prior to the date of the pre-recoupment 
hearing.
    3. The pre-recoupment hearing had to be conducted by an SSA 
employee who had no prior knowledge of the events leading to the 
overpayment determination and the decision to recover the overpayment.
    4. At the hearing, the individual had to be given the opportunity 
to:
     Appear personally, testify, and cross-examine any 
witnesses;
     Be represented by an attorney or other representative; and
     Submit documents for consideration at the hearing.
    The court did not require that a transcript be made of the hearing.
    5. After the hearing, SSA had to issue a written decision to the 
individual (and his/her representative, if any) specifying the findings 
of fact and conclusions in support of the decision and advising of the 
individual's right to appeal the decision.
    In accordance with the court order, SSA began to issue overpayment 
notices containing all of the aforementioned information and to offer 
pre-recoupment hearings to all class members.
    On June 20, 1979, the Supreme Court held in Califano v. Yamasaki, 
442 U.S. 682 (1979), that individuals who file a written request for 
waiver are entitled to the opportunity for a pre-recoupment oral 
hearing, but those who request only reconsideration are not so 
entitled. Thereafter, SSA applied revised overpayment notice and pre-
recoupment hearing procedures to all individuals determined to be 
overpaid under the title II or Black Lung benefit programs. On July 31, 
1981, the Buffington court required SSA to schedule pre-recoupment 
hearings automatically for individuals whose request for waiver of 
overpayment recovery could not be approved after initial paper review. 
On February 10, 1983, the Buffington court approved procedures 
developed by SSA in response to the 1981 decree whereby pre-recoupment 
hearings would be scheduled automatically but ordered SSA to schedule 
the hearings through a written notice to the claimant. The scheduling 
letter had to contain the date, time and place of the hearing; the 
procedure for reviewing the claims file before the hearing; the 
procedure for seeking a change in the scheduled date, time, and/or 
place; and all other information necessary to fully inform the claimant 
about the pre-recoupment hearing. SSA began to automatically schedule 
pre-recoupment hearings in writing in April 1983. The court also 
retained jurisdiction over the matter and prohibited any changes in the 
overpayment procedures it had approved without prior notification of 
plaintiffs' counsel and prior approval from the court.
    In its order of October 19, 1987, the Buffington court approved 
SSA's plan to transfer waiver decisionmaking authority for Retirement 
and Survivors Insurance overpayments from the processing centers to the 
field offices. SSA implemented this change in July 1988.
    On April 13, 1994, the Buffington court approved a stipulation 
modifying the court's injunction in this matter. Under the stipulation, 
plaintiffs agreed to withdraw counsel notification and court approval 
requirements for future changes to SSA overpayment policies. In return, 
SSA agreed to promulgate a Social Security Ruling (SSR) and then final 
regulations embodying the overpayment requirements set forth in 
Yamasaki, above. SSA published the SSR on July 11, 1994 (59 FR 35378), 
published proposed regulations on June 2, 1995 (60 FR 28767), and is 
now publishing final regulations to fulfill its commitments under the 
stipulation.

Current Regulations

    Our current regulations do not address the adequate notice, face-
to-face oral hearing, or appeal step issues noted above. However, SSA 
has been complying with the court orders described above through 
program instructions approved by the Buffington court.

[[Page 56128]]

Regulations Changes

    We are restating in regulations the policies enunciated in the 
court decisions and established in our program instructions. The final 
regulations provide that when an overpayment is discovered, we notify 
the individual immediately. The notice includes:
    1. The overpayment amount and how and when it occurred;
    2. A request for full, immediate refund, unless the overpayment can 
be withheld from the next month's benefit;
    3. The proposed adjustment of benefits if refund is not received 
within 30 days after the date of the notice and adjustment of benefits 
is available;
    4. An explanation of the availability of a different rate of 
withholding when full withholding is proposed, installment payments 
when refund is requested and adjustment is not currently available, 
and/or cross-program recovery when refund is requested and the 
individual is receiving another type of payment from SSA (language 
about cross-program recovery is not included in notices sent to 
individuals in jurisdictions where this recovery option is not 
available; currently, cross-program recovery is not available to 
residents of New York and Pennsylvania);
    5. An explanation of the right to request waiver of adjustment or 
recovery and the automatic scheduling of a file review and pre-
recoupment hearing (commonly referred to as a personal conference) if a 
request for waiver cannot be approved after initial paper review;
    6. An explanation of the right to request reconsideration of the 
fact and/or amount of the overpayment determination;
    7. Instructions about the availability of forms for requesting 
reconsideration and waiver;
    8. An explanation that if the individual does not request waiver or 
reconsideration within 30 days of the date of the overpayment notice, 
adjustment or recovery of the overpayment will begin;
    9. A statement that an SSA office will help the individual complete 
and submit forms for appeal or waiver requests; and
    10. A statement that the individual should notify SSA promptly if 
reconsideration, waiver, a lesser rate of withholding, repayment by 
installments or cross-program adjustment is wanted.
    Form SSA-3105 (Important Information About Your Appeal and Waiver 
Rights) is included with each overpayment notice. The SSA-3105 further 
explains the pre-recoupment review process and contains a tear-off form 
which the individual may complete and return to SSA if he/she wants 
reconsideration and/or waiver.
    The final regulations also provide that to ensure meaningful 
opportunity to contest the correctness of an overpayment determination 
and/or establish entitlement to waiver, the date on which full refund 
is due and, if appropriate, the date on which adjustment will begin 
must be at least 30 days after the date of the overpayment notice. If 
the individual responds within 30 days after the date of the 
overpayment notice, SSA must take action to ensure that benefit 
payments are not interrupted. Any time waiver is requested, SSA stops 
adjustment or recovery.
    When waiver is requested, the individual gives SSA information 
(usually on Form SSA-632-BK (Request for Waiver of Overpayment Recovery 
or Change in Repayment Rate)) to support his/her contention that he/she 
is without fault in causing the overpayment and that recovery would 
either cause financial hardship or be inequitable. That information, 
along with supporting documentation, is reviewed to determine if waiver 
can be approved.
    If waiver cannot be approved after this review, the individual is 
notified in writing and given the dates, times and place of the file 
review and personal conference; the procedure for reviewing the claims 
file prior to the personal conference; the procedure for seeking a 
change in the scheduled dates, times, and/or place; and all other 
information necessary to fully inform the individual about the personal 
conference. The file review is always scheduled at least 5 days before 
the personal conference.
    At the file review, the individual and the individual's 
representative have the right to review the claims file and applicable 
law and regulations with the decisionmaker or another SSA 
representative who is prepared to answer questions. We will provide 
copies of material related to the overpayment and/or waiver from the 
claims file or pertinent sections of the law or regulations that are 
requested by the individual or the individual's representative.
    Although the individual may be represented at the personal 
conference, he/she must also be present. This requirement is consistent 
with the Supreme Court's reasoning in Califano v. Yamasaki. In 
Yamasaki, the court concluded that written review could not satisfy 
SSA's obligation to make an accurate waiver determination because an 
evaluation of fault requires an evaluation of all pertinent 
circumstances, such as the recipient's intelligence, and physical and 
mental condition. The court said, ``We do not see how these can be 
evaluated absent personal contact between the recipient and the person 
who decides his case.'' Id. at 698.
    SSA will provide suitable private space for the personal 
conference. However, if the individual cannot come to the conference 
site for a legitimate reason (e.g., he/she is incapacitated), SSA 
personnel will travel as far as necessary to conduct the conference.
    At the personal conference, the individual is given the opportunity 
to:
    1. Appear personally, testify, cross-examine any witnesses, and 
make arguments;
    2. Be represented by an attorney or other representative, although 
the individual must be present at the conference; and
    3. Submit documents for consideration by the decisionmaker.
    At the personal conference, the decisionmaker:
    1. Tells the individual that the decisionmaker was not previously 
involved in the issue under review, that the waiver decision is solely 
the decisionmaker's, and that the waiver decision is based only on the 
evidence or information presented or reviewed at the conference;
    2. Ascertains the role and identity of everyone present;
    3. Indicates whether or not the individual reviewed the claims 
file;
    4. Explains the provisions of law and regulations applicable to the 
issue;
    5. Briefly summarizes the evidence already on file which will be 
considered;
    6. Ascertains from the individual whether the information presented 
is correct and whether he/she fully understands it;
    7. Allows the individual and the individual's representative, if 
any, to present the individual's case;
    8. Secures updated financial information and verification, if 
necessary;
    9. Allows each witness to present information and allows the 
individual and the individual's representative to question each 
witness;
    10. Ascertains whether there is any further evidence to be 
presented;
    11. Reminds the individual of any evidence promised by the 
individual which has not been presented;
    12. Lets the individual and the individual's representative, if 
any, present any proposed summary or closing statement;

[[Page 56129]]

    13. Explains that a decision will be made and the individual will 
be notified in writing; and
    14. Explains further appeal rights in the event the decision is 
adverse to the individual.
    SSA issues a written decision to the individual (and his/her 
representative, if any) specifying the findings of fact and conclusions 
in support of the decision to approve or deny waiver and advising of 
the individual's right to appeal the decision. If waiver is denied, 
adjustment or recovery of the overpayment begins even if the individual 
appeals.
    If it appears that the waiver cannot be approved, and the 
individual declines a personal conference or fails to appear for a 
second scheduled personal conference, a decision regarding the waiver 
will be made based on the written evidence of record. Reconsideration 
is then the next step in the appeals process.
    The final regulations also state that although a personal 
conference decision on the waiver issue is an initial determination, 
when an individual is appealing an initial determination of waiver 
denial based on a personal conference, the first appeal step is an 
administrative law judge (ALJ) hearing, bypassing the reconsideration 
which generally follows initial determinations. We provide that the 
appeal goes directly to an ALJ hearing in this situation because a 
reconsideration is a review of the written evidence and would be less 
comprehensive in scope than the preceding personal conference. However, 
where an individual is appealing an initial determination of waiver 
denial based solely on a review of the written evidence rather than a 
personal conference (i.e., the individual chose to forego the personal 
conference) the first appeal step is a reconsideration.
    Additionally, an individual may concurrently appeal the substantive 
determination that the overpayment occurred and request waiver of 
recovery of the overpayment. The final regulations provide that when 
the substantive determination is upheld on reconsideration and the 
waiver is denied, even if it is denied solely on the basis of a review 
of the written evidence, the next step in the appeal process for both 
determinations is an ALJ hearing.
    In addition to revising the regulations to codify the policy 
established in these court decisions, we are also removing references 
to title XVIII from Secs. 404.502a and 404.506. These references 
address Medicare overpayment situations, which fall within the purview 
of the Health Care Financing Administration (HCFA). Before HCFA became 
a separate agency, SSA was responsible for both the Social Security 
cash benefit program and the Medicare program. Consequently, HCFA has 
historically relied on many of SSA's regulations that addressed similar 
situations under titles II and XVIII of the Act. The recoupment of 
overpayments has been one of these situations. However, because 
differences in the two programs have increased, HCFA has determined 
that modifications to the rules are necessary. As a result, HCFA is in 
the process of promulgating its own regulations with regard to Medicare 
overpayments. In the meantime, on September 19, 1996 (61 FR 63404), 
HCFA published a final rule that incorporated the substantive content 
of 20 CFR 404.502a and 404.506 into 42 CFR 405.357 and 404.358, 
respectively. Therefore, we are removing the references to title XVIII 
from the regulations text of these final regulations.

Comments on Notice of Proposed Rulemaking (NPRM)

    On June 2, 1995, we published proposed rules in the Federal 
Register at 60 FR 28767 with a 60-day comment period. We received three 
letters with comments. Following are summaries of those comments and 
our responses to them.
    Comment: The final rules should also make comparable changes to the 
title XVI overpayment/waiver regulations.
    Response: Many title XVI overpayment/waiver policies are the same 
as those in title II. As a result of the comments, we will begin a 
separate NPRM to make conforming changes to the title XVI regulations 
where the procedures are already the same. We will also evaluate the 
need for any additional changes in the title XVI overpayment/waiver 
procedures. If we determine additional changes are needed, we will 
address them in the separate NPRM.
    Comment: Additional improvements not specifically addressed in the 
Buffington court order should be made to SSA's overpayment notices, and 
these changes should be codified in the final rules.
    Response: All of the notice requirements ordered by the court in 
Buffington are addressed in the final rules. In addition, SSA has an 
ongoing initiative to improve the quality of our notices, and our goal 
is to examine and revise overpayment notices as necessary to meet 
changing public needs. As part of this initiative, we solicited 
comments from advocacy groups and made interim improvements to the 
language. The National Senior Citizens Law Center and the Legal 
Services for the Elderly, who were two of the commenters on the 
proposed rules, were among those groups whose comments were used to 
improve the notices. However, as a result of the longstanding court 
injunction in Buffington which said we could not change overpayment/
waiver policy without court approval, the changes were never 
implemented. Now that the injunction has been modified, we have focus-
tested the revised language and plan for further improvements.
    As we work on the notices improvement initiative, we will 
thoroughly consider all comments concerning the overpayment notices 
that we received on the NPRM. However, any changes we adopt as a result 
of these comments will be in the actual notices or in our operating 
instructions, rather than in regulations. It is not appropriate for the 
regulations to prescribe individual notice content at the level of 
specificity advocated in the comments. Including in the regulations 
overly restrictive provisions on notice content would eliminate our 
flexibility in addressing other public concerns about the notices.
    Comment: The regulations should explain circumstances where the 
personal conference can address whether an overpayment exists, as 
contrasted with whether the overpayment can be waived.
    Response: The regulations do not impose restrictions on matters 
that can be addressed at a personal conference. If SSA employees have 
any confusion on this point, clarification through program instructions 
would be a more appropriate remedy.
    Comment: If the claimant does not clearly indicate which option he 
or she wishes to pursue, it will be presumed that the claimant wishes 
to challenge the overpayment.
    Response: Adopting this comment could disadvantage the claimant. If 
the presumption is that only the fact of overpayment is being 
challenged (i.e., a request for reconsideration of the overpayment 
determination), recovery efforts stop until a reconsideration 
determination is made. If the determination is unfavorable to the 
claimant, recovery efforts resume, even if the person appeals that 
determination. When only reconsideration is requested, there is no 
right to a personal conference with recovery delayed until the 
determination is made. That right only attaches to a waiver request.
    Comment: The regulations should state that SSA will refund all 
withheld benefits if waiver is approved.

[[Page 56130]]

    Response: SSA policy is to pay any improperly withheld benefits if 
waiver is approved. However, this does not mean full repayment is 
proper every time waiver is approved. For example, waiver may be denied 
because, although the person was without fault in causing the 
overpayment, recovery would not cause financial hardship. Recovery 
begins. Subsequently, the person's financial situation changes for the 
worse and waiver is again requested. Waiver is approved effective with 
the date we determine the financial situation changed. Monies withheld 
before that date were withheld properly and will not be repaid. SSA 
policy also requires stopping recovery as of the month waiver is 
requested. If SSA does not stop recovery timely, any money withheld as 
of the date of the waiver request will be paid back.
    Comment: The regulations should provide for the record of the 
personal conference to be made available to the claimant.
    Response: As stated in Secs. 404.506(d) and 410.561a(d), the 
claimant has the right to review the claims file before the personal 
conference. However, no transcript is made of the personal conference, 
and no court has required one. The person is given a written record in 
the form of the waiver determination. The new regulations at 
Secs. 404.506(g) and 410.561a(g) provide that the written decision will 
include findings of fact and conclusions in support of the decision. 
Current program instructions explain that this determination will 
specify all the evidence considered and the rationale for the 
determination reached. This rationale must include any rebuttal of the 
person's arguments. We believe the regulations, as drafted, along with 
these program instructions provide sufficient safeguards while 
retaining adequate agency flexibility.
    Comment: The regulations should explain that any adjustment or 
recovery that occurs before issuance of the notice of overpayment, or 
after a claimant requests waiver or appeals the overpayment notice, 
will be refunded promptly to the claimant.
    Response: SSA does not begin overpayment adjustment or recovery 
efforts until at least 30 days after the overpayment notice is sent. 
However, we do have the right to refigure the overpayment amount before 
we issue the overpayment notice. This policy was upheld in the Supreme 
Court decision in Everhart, et al. v. Sullivan, 494 U.S. 83 (1990). If, 
through error, benefits are improperly withheld, SSA policy is to pay 
the benefits. To reemphasize this policy to all field employees who 
deal with the overpayment and waiver processes, we will be sure that 
program instructions clearly state that the money should be paid 
promptly. However, we do not believe that it is appropriate to put this 
in the regulations.
    Comment: The regulations should mention the right of claimants to 
subpoena witnesses at a personal conference or, if they need to, 
escalate a matter to the administrative hearing level.
    Response: Claimants may have witnesses testify at the personal 
conference. If it becomes necessary to subpoena witnesses, SSA 
procedures provide for escalating the matter to an ALJ hearing. We are 
not changing the regulations to reflect this at this time because we 
are looking into the feasibility of giving subpoena power to the 
personal conference decisionmaker in the field office.
    Comment: The regulations should mention SSA's policy to permit a 
claimant to request waiver and appeal of the overpayment concurrently 
or in any sequence.
    Response: The commenter indicated that the policy should be stated 
in the regulations because ``many agency employees appear to believe 
that it is necessary for an overpayment appeal to be fully resolved 
before any request for waiver can be processed or adjudicated.'' We do 
not agree that ``many agency employees'' are confused about this 
policy, which is currently in program instructions (section GN 
02201.011 of the Program Operations Manual System (POMS)). However, we 
will reemphasize this policy to all field employees who deal with the 
overpayment and waiver processes the next time we issue this chapter of 
the POMS or sooner, if necessary.
    The following comments concern matters outside the scope of, and 
therefore are not addressed in, these final regulations.
    1. The regulations should clarify the relationship between the 30-
day rule, 60-day rule, and 10-day rule concerning overpayments.
    2. The regulations should mention the claimants' right to receive 
notice of the opportunity to decline cross-program recovery. (We note, 
however, that this principle is already established at 20 C.F.R. 
416.570.)
    3. The regulations should explain how representative payees will be 
treated.
    4. The regulations should explain claimants' rights with respect to 
underpayments and netted overpayments.
    For the reasons discussed above, we have not changed the text of 
the proposed rules to reflect the public comments. We have, however, 
revised the introductory paragraph in Sec. 410.561, as shown in the 
proposed rules, to add a phrase which is currently in that section of 
the regulations and which was inadvertently omitted from the proposed 
rules. Section 410.561 will then agree with Sec. 404.502a, which is a 
corresponding section of the regulations. With this one exception, we 
are publishing the proposed regulations unchanged as final regulations.

Regulatory Procedures

Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these final regulations do not meet the criteria 
for a significant regulatory action under Executive Order 12866. Thus, 
they were not subject to OMB review.

Paperwork Reduction Act of 1980

    These final regulations impose no new reporting or recordkeeping 
requirements which are subject to review by OMB.

Regulatory Flexibility Act

    We certify that these final regulations will not have a significant 
economic impact on a substantial number of small entities because they 
affect only individuals. Therefore, a regulatory flexibility analysis 
as provided in Public Law 96-354, the Regulatory Flexibility Act, is 
not required.

(Catalog of Federal Domestic Assistance: Program Nos. 96.001, Social 
Security--Disability Insurance; 96.002, Social Security--Retirement 
Insurance; 96.003, Social Security--Special Benefits for Persons 
Aged 72 and Over; 96.004, Social Security--Survivors Insurance; and 
96.005, Special Benefits for Disabled Coal Miners)

List of Subjects

20 CFR Part 404

    Administrative practice and procedure; Death benefits; Old-Age, 
Survivors, and Disability Insurance; Reporting and recordkeeping 
requirements.

20 CFR Part 410

    Administrative practice and procedure; Black lung benefits; Death 
benefits; Disability benefits; Miners; Reporting and recordkeeping 
requirements.

    Dated: October 8, 1996.
Shirley S. Chater,
Commissioner of Social Security.

    For the reasons set out in the preamble, parts 404 and 410 of 
chapter

[[Page 56131]]

III of title 20 of the Code of Federal Regulations are amended as 
follows.

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE 
(1950-  )

Subpart F--[Amended]

    1. The authority citation for subpart F of part 404 continues to 
read as follows:

    Authority: Secs. 204(a)-(d), 205(a), and 702(a)(5) of the Social 
Security Act (42 U.S.C. 404(a)-(d), 405(a), and 902(a)(5)); 31 
U.S.C. 3720A.

    2. Section 404.502a is revised to read as follows:


Sec. 404.502a  Notice of right to waiver consideration.

    Whenever an initial determination is made that more than the 
correct amount of payment has been made, and we seek adjustment or 
recovery of the overpayment, the individual from whom we are seeking 
adjustment or recovery is immediately notified. The notice includes:
    (a) The overpayment amount and how and when it occurred;
    (b) A request for full, immediate refund, unless the overpayment 
can be withheld from the next month's benefit;
    (c) The proposed adjustment of benefits if refund is not received 
within 30 days after the date of the notice and adjustment of benefits 
is available;
    (d) An explanation of the availability of a different rate of 
withholding when full withholding is proposed, installment payments 
when refund is requested and adjustment is not currently available, 
and/or cross-program recovery when refund is requested and the 
individual is receiving another type of payment from SSA (language 
about cross-program recovery is not included in notices sent to 
individuals in jurisdictions where this recovery option is not 
available);
    (e) An explanation of the right to request waiver of adjustment or 
recovery and the automatic scheduling of a file review and pre-
recoupment hearing (commonly referred to as a personal conference) if a 
request for waiver cannot be approved after initial paper review;
    (f) An explanation of the right to request reconsideration of the 
fact and/or amount of the overpayment determination;
    (g) Instructions about the availability of forms for requesting 
reconsideration and waiver;
    (h) An explanation that if the individual does not request waiver 
or reconsideration within 30 days of the date of the overpayment 
notice, adjustment or recovery of the overpayment will begin;
    (i) A statement that an SSA office will help the individual 
complete and submit forms for appeal or waiver requests; and
    (j) A statement that the individual receiving the notice should 
notify SSA promptly if reconsideration, waiver, a lesser rate of 
withholding, repayment by installments or cross-program adjustment is 
wanted.
    3. Section 404.506 is revised to read as follows:


Sec. 404.506  When waiver may be applied and how to process the 
request.

    (a) Section 204(b) of the Act provides that there shall be no 
adjustment or recovery in any case where an overpayment under title II 
has been made to an individual who is without fault if adjustment or 
recovery would either defeat the purpose of title II of the Act, or be 
against equity and good conscience.
    (b) If an individual requests waiver of adjustment or recovery of a 
title II overpayment within 30 days after receiving a notice of 
overpayment that contains the information in Sec. 404.502a, no 
adjustment or recovery action will be taken until after the initial 
waiver determination is made. If the individual requests waiver more 
than 30 days after receiving the notice of overpayment, SSA will stop 
any adjustment or recovery actions until after the initial waiver 
determination is made.
    (c) When waiver is requested, the individual gives SSA information 
to support his/her contention that he/she is without fault in causing 
the overpayment (see Sec. 404.507) and that adjustment or recovery 
would either defeat the purpose of title II of the Act (see 
Sec. 404.508) or be against equity and good conscience (see 
Sec. 404.509). That information, along with supporting documentation, 
is reviewed to determine if waiver can be approved. If waiver cannot be 
approved after this review, the individual is notified in writing and 
given the dates, times and place of the file review and personal 
conference; the procedure for reviewing the claims file prior to the 
personal conference; the procedure for seeking a change in the 
scheduled dates, times, and/or place; and all other information 
necessary to fully inform the individual about the personal conference. 
The file review is always scheduled at least 5 days before the personal 
conference.
    (d) At the file review, the individual and the individual's 
representative have the right to review the claims file and applicable 
law and regulations with the decisionmaker or another SSA 
representative who is prepared to answer questions. We will provide 
copies of material related to the overpayment and/or waiver from the 
claims file or pertinent sections of the law or regulations that are 
requested by the individual or the individual's representative.
    (e) At the personal conference, the individual is given the 
opportunity to:
    (1) Appear personally, testify, cross-examine any witnesses, and 
make arguments;
    (2) Be represented by an attorney or other representative (see 
Sec. 404.1700), although the individual must be present at the 
conference; and
    (3) Submit documents for consideration by the decisionmaker.
    (f) At the personal conference, the decisionmaker:
    (1) Tells the individual that the decisionmaker was not previously 
involved in the issue under review, that the waiver decision is solely 
the decisionmaker's, and that the waiver decision is based only on the 
evidence or information presented or reviewed at the conference;
    (2) Ascertains the role and identity of everyone present;
    (3) Indicates whether or not the individual reviewed the claims 
file;
    (4) Explains the provisions of law and regulations applicable to 
the issue;
    (5) Briefly summarizes the evidence already in file which will be 
considered;
    (6) Ascertains from the individual whether the information 
presented is correct and whether he/she fully understands it;
    (7) Allows the individual and the individual's representative, if 
any, to present the individual's case;
    (8) Secures updated financial information and verification, if 
necessary;
    (9) Allows each witness to present information and allows the 
individual and the individual's representative to question each 
witness;
    (10) Ascertains whether there is any further evidence to be 
presented;
    (11) Reminds the individual of any evidence promised by the 
individual which has not been presented;
    (12) Lets the individual and the individual's representative, if 
any, present any proposed summary or closing statement;
    (13) Explains that a decision will be made and the individual will 
be notified in writing; and
    (14) Explains repayment options and further appeal rights in the 
event the decision is adverse to the individual.
    (g) SSA issues a written decision to the individual (and his/her 
representative, if any) specifying the

[[Page 56132]]

findings of fact and conclusions in support of the decision to approve 
or deny waiver and advising of the individual's right to appeal the 
decision. If waiver is denied, adjustment or recovery of the 
overpayment begins even if the individual appeals.
    (h) If it appears that the waiver cannot be approved, and the 
individual declines a personal conference or fails to appear for a 
second scheduled personal conference, a decision regarding the waiver 
will be made based on the written evidence of record. Reconsideration 
is then the next step in the appeals process (but see 
Sec. 404.930(a)(7)).

Subpart J--[Amended]

    4. The authority citation for subpart J of part 404 continues to 
read as follows:

    Authority: Secs. 201(j), 205(a), (b), (d)-(h), and (j), 221, 
225, and 702(a)(5) of the Social Security Act (42 U.S.C. 401(j), 
405(a), (b), (d)-(h), and (j), 421, 425, and 902(a)(5)); 31 U.S.C. 
3720A; sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42 U.S.C. 405 note); 
secs. 5, 6(c)-(e) and 15, Pub. L. 98-460, 98 Stat. 1802 (42 U.S.C. 
421 note).

    5. Section 404.907 is revised to read as follows:


Sec. 404.907  Reconsideration--general.

    If you are dissatisfied with the initial determination, 
reconsideration is the first step in the administrative review process 
that we provide, except that we provide the opportunity for a hearing 
before an administrative law judge as the first step for those 
situations described in Sec. 404.930(a)(6) and (a)(7), where you appeal 
an initial determination denying your request for waiver of adjustment 
or recovery of an overpayment (see Sec. 404.506). If you are 
dissatisfied with our reconsidered determination, you may request a 
hearing before an administrative law judge.
    6. Section 404.930 is amended by removing the word ``or'' at the 
end of (a)(4) and the period at the end of (a)(5) and adding a 
semicolon in its place and adding (a)(6) and (a)(7) as follows:


Sec. 404.930  Availability of a hearing before an administrative law 
judge.

    (a) * * *
    (6) An initial determination denying waiver of adjustment or 
recovery of an overpayment based on a personal conference (see 
Sec. 404.506); or
    (7) An initial determination denying waiver of adjustment or 
recovery of an overpayment based on a review of the written evidence of 
record (see Sec. 404.506), and the determination was made concurrent 
with, or subsequent to, our reconsideration determination regarding the 
underlying overpayment but before an administrative law judge holds a 
hearing.
* * * * *

 PART 410--FEDERAL COAL MINE HEALTH AND SAFETY ACT OF 1969, TITLE 
IV--BLACK LUNG BENEFITS (1969- )

Subpart E--[Amended]

    7. The authority citation for subpart E of part 410 is revised to 
read as follows:

    Authority: Secs. 411(a), 412(a) and (b), 413(b), 426(a), and 508 
of the Federal Coal Mine Health and Safety Act of 1977, as amended 
(30 U.S.C. 921(a), 922(a) and (b), 923(b), 936(a), and 957).
    Section 410.565 also issued under 31 U.S.C. 952.

    8. Section 410.561 is revised to read as follows:


Sec. 410.561  Notice of right to waiver consideration.

    Whenever an initial determination is made that more than the 
correct amount of payment has been made, and we seek adjustment or 
recovery of the overpayment, the individual from whom we are seeking 
adjustment or recovery is immediately notified. The notice includes:
    (a) The overpayment amount and how and when it occurred;
    (b) A request for full, immediate refund, unless the overpayment 
can be withheld from the next month's benefit;
    (c) The proposed adjustment of benefits if refund is not received 
within 30 days after the date of the notice and adjustment of benefits 
is available;
    (d) An explanation of the availability of a different rate of 
withholding when full withholding is proposed, installment payments 
when refund is requested and adjustment is not currently available, 
and/or cross-program recovery when refund is requested and the 
individual is receiving another type of payment from SSA (language 
about cross-program recovery is not included in notices sent to 
individuals in jurisdictions where this recovery option is not 
available);
    (e) An explanation of the right to request waiver of adjustment or 
recovery and the automatic scheduling of a file review and pre-
recoupment hearing (commonly referred to as a personal conference) if a 
request for waiver cannot be approved after initial paper review;
    (f) An explanation of the right to request reconsideration of the 
fact and/or amount of the overpayment determination;
    (g) Instructions about the availability of forms for requesting 
reconsideration and waiver;
    (h) An explanation that if the individual does not request waiver 
or reconsideration within 30 days of the date of the overpayment 
notice, adjustment or recovery of the overpayment will begin;
    (i) A statement that an SSA office will help the individual 
complete and submit forms for appeal or waiver requests; and
    (j) A statement that the individual receiving the notice should 
notify SSA promptly if reconsideration, waiver, a lesser rate of 
withholding, repayment by installments or cross-program adjustment is 
wanted.
    9. Section 410.561a is revised to read as follows:


Sec. 410.561a  When waiver may be applied and how to process the 
request.

    (a) There shall be no adjustment or recovery in any case where an 
overpayment under part B of title IV of the Act has been made to an 
individual who is without fault if adjustment or recovery would either 
defeat the purpose of title IV of the Act, or be against equity and 
good conscience.
    (b) If an individual requests waiver of adjustment or recovery of 
an overpayment made under Part B of title IV within 30 days after 
receiving a notice of overpayment that contains the information in 
Sec. 410.561, no adjustment or recovery action will be taken until 
after the initial waiver determination is made. If the individual 
requests waiver more than 30 days after receiving the notice of 
overpayment, SSA will stop any adjustment or recovery actions until 
after the initial waiver determination is made.
    (c) When waiver is requested, the individual gives SSA information 
to support his/her contention that he/she is without fault in causing 
the overpayment (see Sec. 410.561b), and that adjustment or recovery 
would either defeat the purposes of this subpart (see Sec. 410.561c) or 
be against equity and good conscience (see Sec. 410.561d). That 
information, along with supporting documentation, is reviewed to 
determine if waiver can be approved. If waiver cannot be approved after 
this review, the individual is notified in writing and given the dates, 
times and place of the file review and personal conference; the 
procedure for reviewing the claims file prior to the personal 
conference; the procedure for seeking a change in the scheduled dates, 
times, and/or place; and all other information necessary to fully 
inform the individual about the personal conference. The file

[[Page 56133]]

review is always scheduled at least 5 days before the personal 
conference.
    (d) At the file review, the individual and the individual's 
representative have the right to review the claims file and applicable 
law and regulations with the decisionmaker or another SSA 
representative who is prepared to answer questions. We will provide 
copies of material related to the overpayment and/or waiver from the 
claims file or pertinent sections of the law or regulations that are 
requested by the individual or the individual's representative.
    (e) At the personal conference, the individual is given the 
opportunity to:
    (1) Appear personally, testify, cross-examine any witnesses, and 
make arguments;
    (2) Be represented by an attorney or other representative (see 
Sec. 410.684), although the individual must be present at the 
conference; and
    (3) Submit documents for consideration by the decisionmaker.
    (f) At the personal conference, the decisionmaker:
    (1) Tells the individual that the decisionmaker was not previously 
involved in the issue under review, that the waiver decision is solely 
the decisionmaker's, and that the waiver decision is based only on the 
evidence or information presented or reviewed at the conference;
    (2) Ascertains the role and identity of everyone present;
    (3) Indicates whether or not the individual reviewed the claims 
file;
    (4) Explains the provisions of law and regulations applicable to 
the issue;
    (5) Briefly summarizes the evidence already in file which will be 
considered;
    (6) Ascertains from the individual whether the information 
presented is correct and whether he/she fully understands it;
    (7) Allows the individual and the individual's representative, if 
any, to present the individual's case;
    (8) Secures updated financial information and verification, if 
necessary;
    (9) Allows each witness to present information and allows the 
individual and the individual's representative to question each 
witness;
    (10) Ascertains whether there is any further evidence to be 
presented;
    (11) Reminds the individual of any evidence promised by the 
individual which has not been presented;
    (12) Lets the individual and the individual's representative, if 
any, present any proposed summary or closing statement;
    (13) Explains that a decision will be made and the individual will 
be notified in writing; and
    (14) Explains repayment options and further appeal rights in the 
event the decision is adverse to the individual.
    (g) SSA issues a written decision to the individual (and his/her 
representative, if any) specifying the findings of fact and conclusions 
in support of the decision to approve or deny waiver and advising of 
the individual's right to appeal the decision. If waiver is denied, 
adjustment or recovery of the overpayment begins even if the individual 
appeals.
    (h) If it appears that the waiver cannot be approved, and the 
individual declines a personal conference or fails to appear for a 
second scheduled personal conference, a decision regarding the waiver 
will be made based on the written evidence of record. Reconsideration 
is then the next step in the appeals process (but see Sec. 410.630(c)).

Subpart F--[Amended]

    10. The authority citation for subpart F of part 410 is revised to 
read as follows:

    Authority: Secs. 413(b), 426(a), 507, and 508 of the Federal 
Coal Mine Health and Safety Act of 1977, as amended (30 U.S.C. 
923(b), 936(a), 956, and 957).

    11. Section 410.623 is revised to read as follows:


Sec. 410.623  Reconsideration; right to reconsideration.

    (a) We shall reconsider an initial determination if a written 
request for reconsideration is filed, as provided in Sec. 410.624, by 
or for the party to the initial determination (see Sec. 410.610). We 
shall also reconsider an initial determination if a written request for 
reconsideration is filed, as provided in Sec. 410.624, by an individual 
as a widow, child, parent, brother, sister, or representative of a 
decedent's estate, who makes a showing in writing that his or her 
rights with respect to benefits may be prejudiced by such 
determination.
    (b) Reconsideration is the first step in the administrative review 
process that we provide for an individual dissatisfied with the initial 
determination, except that we provide the opportunity for a hearing 
before an administrative law judge as the first step for those 
situations described in Sec. 410.630(b) and (c), where an individual 
appeals an initial determination denying waiver of adjustment or 
recovery of an overpayment (see Sec. 410.561a).
    12. Section 410.630 is revised to read as follows:


Sec. 410.630  Hearing; right to hearing.

    An individual referred to in Secs. 410.632 or 410.633 who has filed 
a written request for a hearing under the provisions in Sec. 410.631 
has a right to a hearing if:
    (a) An initial determination and reconsideration of the 
determination have been made by the Social Security Administration 
concerning a matter designated in Sec. 410.610;
    (b) An initial determination denying waiver of adjustment of 
recovery of an overpayment based on a personal conference has been made 
by the Social Security Administration (see Sec. 410.561a); or
    (c) An initial determination denying waiver of adjustment or 
recovery of an overpayment based on a review of the written evidence of 
record has been made by the Social Security Administration (see 
Sec. 410.561a) and the determination was made concurrent with, or 
subsequent to, our reconsideration determination regarding the 
underlying overpayment but before an administrative law judge holds a 
hearing.

[FR Doc. 96-27707 Filed 10-30-96; 8:45 am]
BILLING CODE 4190-29-P