[Federal Register Volume 65, Number 192 (Tuesday, October 3, 2000)]
[Proposed Rules]
[Pages 58970-58973]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-25184]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

RIN 0960-AF13


Collection of Supplemental Security Income (SSI) Overpayments 
From Social Security Benefits

AGENCY: Social Security Administration.

ACTION: Proposed rules.

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SUMMARY: We propose to revise our regulations dealing with the recovery 
of overpayments under the Supplemental Security Income (SSI) program 
under title XVI of the Social Security Act (the Act). Under the 
proposed revisions, we would modify our regulations to permit SSA to 
recover SSI overpayments by

[[Page 58971]]

adjusting the amount of social security benefits payable to the 
individual under title II of the Act. This collection practice would be 
limited to individuals who are not currently eligible to receive any 
cash payments under any provision of title XVI or State supplementary 
cash payments that we administer. Also, the amount of the title II 
benefits withheld in a month to recover the title XVI overpayment would 
not exceed 10 percent of the amount payable under title II unless the 
overpaid person requests us to withhold a higher amount or the overpaid 
person (or his or her spouse) willfully misrepresented or concealed 
material information in connection with the overpayment. In a case 
involving willful misrepresentation or concealment, the entire title II 
benefit amount will be withheld to recover the overpayment. These 
revisions would permit SSA to recover SSI overpayments from title II 
benefits payable to the overpaid individual when SSI cash benefits are 
not payable. These revisions are necessary to implement section 1147 of 
the Act.

DATES: To be sure your comments are considered, we must receive them no 
later than December 4, 2000.

ADDRESSES: Comments should be submitted in writing to the Commissioner 
of Social Security, P.O. Box 1585, Baltimore, Maryland 21235-1585, sent 
by telefax to (410) 966-2830, sent by e-mail to [email protected] or 
delivered to the Office of Process and Innovation Management, Social 
Security Administration, 2109 West Low Rise Building, 6401 Security 
Boulevard, Baltimore, Maryland 21235-6401.

FOR FURTHER INFORMATION CONTACT: Robert Augustine, Social Insurance 
Specialist, Office of Process and Innovation Management, Social 
Security Administration, 6401 Security Boulevard, Baltimore, Maryland 
21235-6401, (410) 966-5121 or TTY (410) 966-5609 for information about 
these rules. For information on eligibility or claiming benefits, call 
our national toll-free number, 1-800-772-1213 or TTY 1-800-325-0778.

SUPPLEMENTARY INFORMATION: Under the law in effect prior to the 
enactment of Pub. L. 105-306 on October 28, 1998, if an individual 
received an SSI overpayment and failed to refund the full overpayment 
amount, SSA was authorized to recover the overpayment by adjusting 
future SSI payments due the recipient or his or her eligible spouse. If 
the overpaid person was not receiving SSI payments but was entitled to 
benefits under title II of the Act, he or she generally could elect 
voluntarily to have the overpayment recovered by adjusting the title II 
benefits. If an overpaid individual was no longer entitled to SSI 
payments, we could refer the overpayment to the Department of the 
Treasury for offset against any Federal tax refund due that individual.
    Section 8 of Pub. L. 105-306 added new section 1147 to the Act, 
permitting SSA to use an additional collection tool to recover SSI 
overpayments. Under section 1147, SSA may recover SSI overpayments by 
adjusting the amount of any benefits payable to the overpaid individual 
under title II of the Act, without the consent of the individual. 
Throughout the remainder of this preamble, this type of overpayment 
recovery is referred to as ``cross-program recovery.''
    Section 1147 limits the use of cross-program recovery to SSI 
overpayments made to individuals who are not currently eligible to 
receive cash payments, including State supplementary payments, under 
title XVI or under section 212(b) of Pub. L. 93-66. Also, section 1147 
limits the amount of the SSI overpayment that may be recovered in any 
month through cross-program recovery to 10 percent of the benefit 
amount payable under title II in any month, unless the overpaid person 
requests that SSA withhold a higher amount or unless the overpaid 
person or his or her spouse willfully misrepresented or concealed 
material information in connection with the overpayment. If there is 
willful misrepresentation or concealment, section 1147 permits SSA to 
recover the overpayment by withholding 100 percent of the title II 
benefit payable.

Explanation of Proposed Changes

    We propose to add to our regulations new Sec. 416.572 setting forth 
our rules on cross-program recovery. This new section would:
     Define certain terms;
     Explain the conditions for imposing cross-program 
recovery;
     Explain the rights of the overpaid individual to request 
review of our determination that he or she still owes us the 
overpayment balance; and
     Explain the rules for determining the amount to be 
withheld from the individual's title II benefits.
    Specifically, in paragraph (a) of proposed Sec. 416.572, we would 
define the following terms:
     ``Cross-program recovery'' would be defined as the process 
we will use to collect SSI overpayments by adjusting title II benefits 
payable in a month.
     ``Benefits payable in a month'' would be defined as the 
amount of title II benefits a person would actually receive in a given 
month. Under our proposed definition, ``benefits payable in a month'' 
would include any past due benefits a person would receive, but would 
not include any amounts withheld from the person's benefits under the 
deductions or reductions listed in Sec. 404.401(a) or (b) of our 
regulations. The proposed definition also includes an example of how we 
determine the ``benefits payable in a month.''
     ``Not currently eligible for SSI cash benefits'' would 
mean that a person is receiving no cash payments, including State 
supplementary payments, under title XVI of the Act or under section 
212(b) of Pub. L. 93-66.
    In paragraph (b) of proposed Sec. 416.572, we would explain that we 
may use cross-program recovery to collect SSI overpayments if the 
overpaid person is not currently receiving SSI cash benefits and is 
receiving benefits under title II of the Act. Thus, if a person whose 
title II benefits are being adjusted to recover an SSI overpayment 
again becomes eligible for SSI benefits, cross-program recovery would 
end with the month in which SSI cash benefits resume. When SSI benefits 
become payable to the overpaid person, we would resume the monthly 
adjustment of SSI payments to collect the overpayment. We would not 
start cross-program recovery if the overpaid person is refunding the 
title XVI overpayment by regular monthly installments or we are 
recovering a title II overpayment by withholding that person's title II 
benefits.
    Paragraph (c) of proposed Sec. 416.572 would list the information 
that we would include in the notice we would send to a person whose 
title II benefits would be subject to cross-program recovery. The 
notice would inform the person that he or she owes a specific SSI 
overpayment balance, that we will be using cross-program recovery to 
collect that balance and that we will withhold a specific amount from 
the title II benefits. The notice would state that the person may ask 
us to review our determination that he or she still owes the 
overpayment balance. Unless the overpaid person or that person's spouse 
willfully misrepresented or concealed material information in 
connection with the overpayment, the notice would also state that the 
person may request that we withhold from the title II benefits a 
different amount than the amount stated in the notice.
    Paragraph (d) of proposed Sec. 416.572 would explain that we will 
begin to withhold no sooner than 30 days after the date of the notice. 
If the individual pays the entire overpayment balance within that 30-
day period, we will not

[[Page 58972]]

impose cross-program recovery. If within the 30-day period the person 
asks us to review the determination that he or she still owes us the 
overpayment balance, we will not begin cross-program recovery until we 
review the matter and notify the person of our decision. If within the 
30-day period, the person requests that we withhold a different amount, 
we will not begin cross-program recovery until we determine the amount 
we will withhold.
    Paragraph (e) of proposed Sec. 416.572 would explain that we will 
generally collect the overpayment at the rate of 10 percent of the 
title II benefits payable in any month. However, we would collect at a 
different rate if the person requests, and we approve, a different rate 
of withholding or if the overpaid person (or his or her spouse) 
willfully misrepresented or concealed material information in 
connection with the overpayment. If there has been willful 
misrepresentation or concealment of material information in connection 
with the overpayment, we would recover the overpayment by withholding 
at the rate of 100 percent of the title II benefits payable. We would 
not collect at a lesser rate.

Other Revisions

    We propose to revise Sec. 404.401(c) to explain that we may adjust 
a person's title II benefits to recover an SSI overpayment using cross-
program recovery.
    We propose to revise Sec. 416.570 to eliminate the reference to 
voluntary withholding of an SSI overpayment from title II benefits. 
Under section 1147 of the Act, we now have authority to use cross-
program recovery to recover title XVI overpayments without the consent 
of the overpaid person.

Clarity of This Regulation

    Executive Order (E.O.) 12866 and the President's memorandum of June 
1, 1998, require each agency to write all rules in plain language. In 
addition to your substantive comments on these proposed rules, we 
invite your comments on how to make these proposed rules easier to 
understand.
    For example:
     Have we organized the material to suit your needs?
     Are the requirements in the rules clearly stated?
     Do the rules contain technical language or jargon that is 
unclear?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the rules easier to understand?
     Would more (but shorter) sections be better?
     Could we improve clarity by adding tables, lists, or 
diagrams?
     What else could we do to make the rules easier to 
understand?

Electronic Version

    The electronic file of this document is available on the date of 
publication in the Federal Register on the Internet site for the 
Government Printing Office: http://www.access.gpo.gov/su__docs/aces/
aces140.html. It is also available on the Internet site for SSA (i.e., 
SSA Online): http://www.ssa.gov/.

Regulatory Procedures

Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these proposed regulations meet the criteria for a 
significant regulatory action under Executive Order 12866. Thus, they 
are subject to OMB review. However, the amounts of the savings or costs 
involved do not cross the threshold for an economically significant 
regulation as defined in E.O. 12866. The program savings from increased 
collections as a result of implementation of section 8 of Pub. L. 105-
306 are $15 million in each of fiscal years (FY) 2001 through 2003; $40 
million in FY 2004; and $30 million in FY 2005 for a total increase of 
$115 million over 5 years. The administrative savings estimate for FYs 
2001 through 2005 is less than $5 million.

Regulatory Flexibility Act

    We certify that these proposed rules will not have a significant 
economic impact on a substantial number of small entities because they 
affect only individuals. Thus, a regulatory flexibility analysis as 
provided in the Regulatory Flexibility Act, as amended, is not 
required.

Paperwork Reduction Act

    These proposed regulations would impose no new reporting or 
recordkeeping requirements requiring OMB clearance. In fact, these 
proposed rules would decrease the paperwork burden on the public by 833 
burden hours per year. This is because, under the proposed rules, the 
public would no longer complete Form SSA-730-U2 (Request To Have 
Supplemental Security Income Overpayment Withheld From My Social 
Security Benefits) which provides SSA with the overpaid person's 
request that SSA collect a title XVI overpayment from the person's 
title II benefits.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social 
Security-Disability Insurance; 96.006, Supplemental Security Income)

List of Subjects

20 CFR Part 404

    Administrative practice and procedure, Blind, Disability benefits, 
Old-Age, Survivors and Disability Insurance, Reporting and 
recordkeeping requirements, Social Security.

20 CFR Part 416

    Administrative practice and procedure, Aged, Blind, Disability 
benefits, Public assistance programs, Reporting and recordkeeping 
requirements, Supplemental Security Income (SSI).

    Dated: June 9, 2000.
Kenneth S. Apfel,
Commissioner of Social Security.

    For the reasons set forth in the preamble, we propose to amend 
subpart E of part 404 and subpart E of part 416 of Chapter III of Title 
20, Code of Federal Regulations as follows:

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

    1. The authority citation for subpart E of part 404 is revised to 
read as follows:

    Authority: Secs. 202, 203, 204(a) and (e), 205(a) and (c), 
222(b), 223(e), 224, 225, 702(a)(5) and 1147 of the Social Security 
Act (42 U.S.C. 402, 403, 404(a) and (e), 405(a) and (c), 422(b), 
423(e), 424a, 425, 902(a)(5) and 1320b-17).

    2. Section 404.401 is amended by revising paragraph (c) to read as 
follows:


Sec. 404.401  Deduction, reduction, and nonpayment of monthly benefits 
or lump-sum death payments.

* * * * *
    (c) Adjustments. We may adjust your benefits if you receive more or 
less than the correct amount due under title II of the Act. We may also 
adjust your benefits if you received more than the correct amount due 
under title XVI of the Act. For the title II rules on adjustments to 
your benefits, see subpart F of this part. For the rules on adjusting 
your benefits to recover title XVI overpayments, see Sec. 416.572 of 
this chapter.
* * * * *

PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND 
DISABLED

    3. The authority citation for subpart E of part 416 is revised to 
read as follows:

    Authority: Secs. 702(a)(5), 1147, 1601, 1602, 1611(c) and (e), 
and 1631(a)-(d) and (g) of the Social Security Act (42 U.S.C. 
902(a)(5), 1320b-17, 1381, 1381a, 1382(c) and (e), and 1383(a)-(d) 
and (g)); 31 U.S.C. 3720A.


[[Page 58973]]


    4. Section 416.570 is amended by revising the third sentence to 
read as follows:


Sec. 416.570  Adjustment-general rule.

    * * * Absent a specific request from the person from whom recovery 
is sought, no overpayment made under title II or XVIII of the Act will 
be recovered by adjusting SSI benefits. * * *
    5. Section 416.572 is added to read as follows:


Sec. 416.572  Are title II benefits subject to adjustment to recover 
title XVI overpayments?

    (a) Definitions--(1) Cross-program recovery. Cross-program recovery 
is the process that we will use to collect title XVI overpayments from 
benefits payable to you in a month under title II of the Social 
Security Act.
    (2) Benefits payable in a month. For purposes of this section, 
benefits payable in a month means the amount of title II benefits you 
would actually receive in that month. It includes your monthly benefit 
and any past due benefits after any reductions or deductions listed in 
Sec. 404.401(a) and (b) of this chapter.

    Example: A person is entitled to monthly title II benefits of 
$1000. The first benefit payment the person would receive includes 
past-due benefits of $1000. The amount of benefits payable in that 
month for purposes of cross-program recovery is $2000. The monthly 
benefit payable for subsequent months is $1000. If $200 would be 
deducted from the person's title II benefits in a later month 
because of excess earnings as described in Secs. 404.415 and 404.416 
of this chapter, the benefit payable in that month for purposes of 
cross-program recovery would be $800.

    (3) Not currently eligible for SSI cash benefits. This means that a 
person is not receiving any cash payment, including State supplementary 
payments, under any provision of title XVI of the Act or under section 
212(b) of Pub. L. 93-66 (42 U.S.C. 1382 note).
    (b) When we may collect title XVI overpayments using cross-program 
recovery. (1) We may use cross-program recovery to collect a title XVI 
overpayment you owe if:
    (i) You are not currently eligible for SSI cash benefits, and
    (ii) You are receiving title II benefits.
    (2) We will not start cross-program recovery if:
    (i) You are refunding your title XVI overpayment by regular monthly 
installments, or
    (ii) We are recovering a title II overpayment by adjusting your 
title II benefits under Sec. 404.502 of this chapter.
    (c) Notice you will receive. Before we collect an overpayment from 
you using cross-program recovery, we will send you a written notice 
that tells you the following information:
    (1) We have determined that you owe a specific overpayment balance 
that can be collected by cross-program recovery;
    (2) We will withhold a specific amount from the title II benefits 
payable to you in a month (see paragraph (e) of this section);
    (3) You may ask us to review this determination that you still owe 
this overpayment balance; and
    (4) You may request that we withhold a different amount (the notice 
will not include this information if paragraph (e)(2) of this section 
applies).
    (d) When we will begin cross-program recovery. We will begin 
collecting the overpayment balance by cross-program recovery no sooner 
than 30 calendar days after the date of the notice described in 
paragraph (c) of this section.
    (1) If within that 30-day period you pay us the full overpayment 
balance stated in the notice, we will not begin cross-program recovery.
    (2) If within that 30-day period you ask us to review our 
determination that you still owe us this overpayment balance, we will 
not begin cross-program recovery before we review the matter and notify 
you of our decision in writing.
    (3) If within that 30-day period you ask us to withhold a different 
amount than the amount stated in the notice, we will not begin cross-
program recovery until we determine the amount we will withhold. This 
paragraph does not apply when paragraph (e)(2) of this section applies.
    (e) Rate of withholding. (1) We will collect the overpayment at the 
rate of 10 percent of the title II benefits payable to you in any 
month, unless:
    (i) You request and we approve a different rate of withholding, or
    (ii) You or your spouse willfully misrepresented or concealed 
material information in connection with the overpayment.
    (2) If you or your spouse willfully misrepresented or concealed 
material information in connection with the overpayment, we will 
collect the overpayment at the rate of 100 percent of the title II 
benefits payable in any month. We will not collect at a lesser rate. 
(See Sec. 416.571 for what we mean by concealment of material 
information.)

[FR Doc. 00-25184 Filed 10-2-00; 8:45 am]
BILLING CODE 4191-02-U