[Federal Register Volume 66, Number 144 (Thursday, July 26, 2001)]
[Rules and Regulations]
[Pages 38902-38907]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-18592]


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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: Final rules.

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SUMMARY: We are revising 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 revisions, we 
are modifying our regulations to permit SSA to recover SSI overpayments 
by adjusting the amount of social security benefits payable to the 
individual under title II of the Act. This collection practice is 
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 may 
not exceed 10 percent of the amount payable under title II unless the 
overpaid person requests us to withhold a different 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.

EFFECTIVE DATE: These regulations are effective August 27, 2001.

FOR FURTHER INFORMATION CONTACT: Patricia Hora, Social Insurance 
Specialist, Office of Process and Innovation Management, Social 
Security Administration, 6401 Security Boulevard, Baltimore, Maryland 
21235-6401, (410) 965-7183 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

[[Page 38903]]

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 Changes

    We are adding to our regulations new Sec. 416.572 setting forth our 
rules on cross-program recovery. This new section:
     Defines certain terms;
     Explains the conditions for imposing cross-program 
recovery;
     Explains the rights of the overpaid individual to request 
waiver of the overpayment and review of our determination that he or 
she still owes us the overpayment balance; and
     Explains the rules for determining the amount to be 
withheld from the individual's title II benefits.
    Specifically, in paragraph (a) of Sec. 416.572, we define the 
following terms:
     ``Cross-program recovery'' is 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'' is defined as the amount 
of title II benefits a person actually receives in a given month. Under 
our definition, ``benefits payable in a month'' includes any past due 
benefits a person receives, but does 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 definition also includes 
an example of how we determine the ``benefits payable in a month.''
     ``Not currently eligible for SSI cash benefits'' means 
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 Sec. 416.572, we 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 will end with the month in 
which SSI cash benefits resume. When SSI benefits become payable to the 
overpaid person, we will resume the monthly adjustment of SSI payments 
to collect the overpayment. We will 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 Sec. 416.572 lists the information that we will 
include in the notice we send to a person whose title II benefits are 
subject to cross-program recovery. The notice informs 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 will 
state that the person may ask us to review our determination that he or 
she still owes the overpayment balance. The notice will also advise the 
person he or she may request a waiver of the overpayment under section 
1631(b)(1)(B) of the Act and explain the circumstances under which we 
will waive the overpayment. The notice will inform the individual how 
to request a waiver. Unless the overpaid person or that person's spouse 
willfully misrepresented or concealed material information in 
connection with the overpayment, the notice will 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 Sec. 416.572 explains 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 impose cross-program recovery. If within the 30-day 
period the person asks us to waive the overpayment or 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 Sec. 416.572 explains that we will generally 
collect the overpayment at the rate of 10 percent of the title II 
benefits payable in any month. However, we will 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 an overpaid person requests withholding at a lesser 
rate than 10 percent, we will set a rate that will not deprive the 
individual of income required for ordinary and necessary living 
expenses as prescribed in Sec. 416.571 of our regulations. If there has 
been willful misrepresentation or concealment of material information 
in connection with the overpayment, we will recover the overpayment by 
withholding at the rate of 100 percent of the title II benefits 
payable. We will not collect at a lesser rate.

Other Revisions

    We are revising 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 are revising 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.

Public Comments

    On October 3, 2000, we published proposed rules in the Federal 
Register at 65 FR 58970 and provided a 60-day period for interested 
parties to comment. We received comments from 6 organizations. Because 
some of the

[[Page 38904]]

comments received were quite detailed, we have condensed, summarized or 
paraphrased them in the discussion below. We address all of the 
significant issues raised by the commenters that are within the scope 
of the proposed rules. We have made revisions to the proposed rules to 
address some of the concerns of the commenters.
    Comment: Letters from three organizations recommended that we 
include language in the cross-program recovery notice advising 
individuals of their rights to request that we waive collection of the 
overpayment. One of these organizations expressed concern that SSA 
adopt procedural protections that meet the needs of these individuals 
(title II beneficiaries who previously received SSI and are disabled 
and/or elderly) and recommended that the final version of new 
Sec. 416.572(c) require inclusion of information about the availability 
of waiver under the procedures of 20 CFR Sec. 416.550 in the notice. 
Similarly, another organization recommended that SSA change new 
Sec. 416.572(c) to state that the written notice to individuals subject 
to cross-program recovery should include information about the 
availability of waiver. The third organization expressed concern that 
individuals likely to be affected by our new statutory authority to 
apply cross-program recovery may not realize that they may request 
waiver at any time.
    Response: After careful consideration, we have decided to include 
language about the availability of waiver in the written notice to 
individuals subject to cross-program recovery. We have changed new 
Sec. 416.572(c) and (d) to provide that (1) our written notice to an 
individual subject to cross-program recovery will explain that the 
individual may request waiver, and (2) if an individual requests waiver 
within 30 days from the date of the notice, we will not start 
withholding title II benefits before we review the matter and notify 
the individual of our decision.
    Comment: Two organizations sent comments relating to the overpaid 
individual's right to request that we collect the SSI overpayment from 
title II benefits at a rate that is lower than 10 percent of the title 
II benefits payable in a month. One organization recommended that the 
final regulation state that the individual may request a withholding 
rate of less than 10 percent under the same criteria applicable under 
20 CFR 416.571 when we adjust SSI benefits. The other organization 
recommended that the notice portion of the final regulation state that 
an individual may request a rate that is higher or lower than the 10 
percent figure and state the criteria that SSA would use to determine 
the rate.
    Response: With regard to the first recommendation, pertinent 
language of paragraph (e)(1)(i) of Sec. 416.572 states that we will 
collect the overpayment by withholding 10 percent of title II benefits 
unless the overpaid person ``request[s] and we approve a different rate 
of withholding.'' Paragraph (c)(4) of Sec. 416.572 provides that, in 
most cases, the notice on proposed cross-program recovery will state 
that the individual ``may request that we withhold a different amount * 
* *'' Paragraph (d)(3) provides that if within 30 days from the date of 
the notice the individual asks 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.'' The plain 
meaning of the terms ``different rate of withholding'' and ``different 
amount'' in these paragraphs encompasses an amount that is lower than 
10 percent of the benefit payable in a month and an amount that is 
higher than the 10 percent figure. Therefore, we saw no need to revise 
the language in these paragraphs. However, we have revised the language 
in paragraph (e)(2) in Sec. 416.572 to state that we will use the 
criteria in Sec. 416.571 to determine whether we will grant an 
individual's request that we withhold less than the 10 percent figure 
mentioned in the cross-program recovery notice. Under these criteria, 
we would consider the individual's income, resources and financial 
obligations. We would attempt to establish a rate of withholding that 
would not deprive the individual of income needed to meet ordinary and 
necessary living expenses.
    Comment: Two organizations asserted that there are problems in the 
administration of our programs that cause overpayments. Among the 
concerns are staffing in local offices, training for our employees, and 
documenting and acting on reports of changes potentially affecting 
eligibility or benefit amounts. One organization said we should correct 
the problems before developing new rules for and methods of collecting 
the overpayments.
    Response: We are not adopting the suggestion that we delay 
implementation of cross-program recovery. Overpayments of benefits 
occur for many reasons. We take our responsibility for stewardship of 
the programs that we administer very seriously. That is why we 
constantly track our payment accuracy and strive to minimize 
overpayments. In addition, we are pursuing several initiatives that 
address the causes of overpayments and other matters described by the 
organizations. Regardless of the reasons for overpayments, we are 
responsible for recovering as much of the overpaid money as possible 
consistent with the law.
    Comment: One organization stated that SSA should delay the start of 
cross-program recovery until 60 days after the written notice to the 
individual concerning the planned benefit reduction. The organization 
felt that the 30-day period which SSA plans to use is not enough time 
for the individual to contact SSA in order to repay the debt, ask for a 
review, ask for a different rate of withholding or request waiver.
    Response: We are not adopting the suggestion that we delay the 
reduction until 60 days after the written notice to the individual. We 
believe the 30-day period is adequate time for an individual to request 
review or ask for waiver or a different rate of withholding. Overpaid 
individuals do not have to submit all of the evidence within that 30-
day period. They need only make their requests during the 30 days. 
After the request, they can review our records and gather and submit 
evidence.
    SSA has been using this process for years in its efforts to collect 
overpayments. We believe that the process allows individuals adequate 
time to request review or waiver or lower withholding rates and to 
submit essential evidence.
    Comment: One organization stated that we should include in the 
notice described in Sec. 416.572(c) the same information about the 
overpaid amount that we include in the initial notice of overpayment. 
The organization states that the information should be included because 
it believes a person cannot adequately identify or question an 
overpayment without more information.
    Response: After considering the organization's comment, we decided 
not to adopt the suggestion. The new notice described in 
Sec. 416.572(c) will show the balance of the overpayment at the time we 
send the notice. The initial notice of overpayment previously sent to 
the overpaid person includes information such as the beginning balance 
of the overpayment, the general cause of the overpayment, and the 
monthly amounts received compared to the amounts that the person should 
have received during each month of the overpayment. We include the more 
detailed information in initial notices of overpayment because those 
notices give overpaid people the right to request appeal of the fact or 
amount of the overpayment. To exercise that right, overpaid people need 
to know specifically the

[[Page 38905]]

overpayment amount, when they incurred the overpayment, how the 
overpayment was calculated, and why the overpayment occurred.
    The notice described in Sec. 416.572(c) is sent to the overpaid 
person after the right to appeal the fact or the original amount of the 
overpayment has expired. Since the person's appeal rights on these 
matters have expired, the detailed information about the overpayment is 
not required in the new notice regarding cross-program recovery. Under 
the new regulation, the overpaid individual would have the right to 
have us review whether he or she still owes all or part of the 
overpayment balance. For example, the individual may have evidence that 
he or she refunded all or part of the balance or that we previously 
waived collection. We believe that the new notice of cross-program 
recovery gives sufficient information about the overpayment for the 
individual to determine whether to ask for such review.
    In addition, it is our long-held policy to provide the detailed 
information on the amount of the initial overpayment balance and the 
cause of the overpayment in the initial notice of overpayment. We do 
not repeat that information with each subsequent overpayment-related 
notice we send. In subsequent notices to overpaid persons, we invite 
them to ask for more information about the overpayment if they want to 
know more detail. To facilitate the process of providing more 
information to overpaid persons, we provide them in our subsequent 
notices (including the new notice described in Sec. 416.572(c)) with a 
variety of contact information, such as the Agency's national toll-free 
telephone number and the address and telephone number of the local 
office that is closest to them. When overpaid persons ask for more 
information, we provide them with the details contained in our records, 
including why the overpayment occurred, when it occurred, and how we 
calculate the overpayment.
    Comment: One organization commented that the 100 percent 
withholding rate should not be imposed without SSA's final 
determination that the debt was the result of fraud or willful 
misrepresentation. The organization stated that this is necessary to 
protect vulnerable people from unjustified penalties.
    Response: In determining to collect the SSI overpayment from title 
II benefits without regard to the 10 percent limitation under section 
1147(a)(2) of the Act, we will apply the same procedures that we apply 
when we collect SSI overpayments from SSI benefits under section 
1631(b) of the Act. We will make an initial finding on willful 
concealment or misrepresentation. Then, we will send to the individual 
thought to be guilty of those acts written notification of our finding 
and our intention to withhold all of the individual's title II benefits 
until we collect the SSI overpayment balance. The notice will explain 
that the person may request a reconsideration of the initial 
determination. If the individual does not request reconsideration of 
our finding in a timely manner, the initial determination becomes our 
final determination and we will begin to impose the 100 percent 
withholding rate. If the individual requests reconsideration in a 
timely manner, we will not begin 100 percent withholding while we 
review the matter. If the individual requests reconsideration in a 
timely manner and we decide that our initial finding was correct, we 
will begin withholding at the 100 percent rate after we send the 
individual written notice of our reconsideration determination.
    Comment: An organization urged us to include in the notice 
provisions of Sec. 416.572(c) the elements required by the order issued 
by the Federal District Court for the Southern District of New York in 
the case of Ellender v. Schweiker, 575 F. Supp. 590 (1983), as modified 
November 21, 2000. The organization stated its view that this action 
was necessary to comply with the modified court order.
    Response: For the reasons that follow, we are not adopting this 
recommendation. The court order in the Ellender case does not apply 
nationwide. It applies only to a narrow class comprised of individuals 
who meet all of the following criteria: they resided in New York State 
on October 26, 1982; they were entitled to title II benefits on that 
date; they were former SSI recipients, but not current SSI recipients, 
on that date. Moreover, we do not agree that the court order, as 
modified November 21, 2000, requires that we include in the regulation 
the notice elements listed in the order. The order requires that we 
include a statement in ``instructions and directives issued by the 
Social Security Administration to its staff, including the Office of 
Hearings and Appeals'', that these elements be included in notices sent 
to Ellender class members regarding recovery of SSI overpayments from 
title II benefits. We are preparing such a statement for our 
instructions in the Program Operations Manual System and the Hearings, 
Appeals and Litigation Law Manual (HALLEX), and we believe that 
inclusion of the statement in those instructions is enough to satisfy 
the court order. We are also taking steps to ensure that cross-program 
recovery notices that do not contain the elements listed in the 
Ellender court order are not sent to Ellender class members.
    Comment: One organization suggested that SSA use focus groups to 
ensure that the new written notice it proposes to use for cross-program 
recovery is understandable to individuals who receive it. The 
organization is concerned that the individuals will not understand the 
effect of the notices or their appeal rights.
    Response: In developing the cross-program recovery notice, we have 
attempted to use, wherever possible, language that had previously been 
cleared within SSA and, in many cases, had already been tested using 
focus groups. In addition, any new language developed specifically for 
this notice was developed using the same notice standards (including 
plain-language) we use in developing all our notices. Therefore, we are 
not delaying implementation of cross-program recovery in order to 
further focus-test the language in the cross-program recovery notice.
    Comment: One organization commented that SSA should include in its 
regulation a new section to provide notice of the right to request 
waiver and review (with an explanation of the difference between waiver 
and review) to individuals who were overpaid SSI, were subject to 
cross-program recovery, and who subsequently become eligible again for 
SSI payments.
    Response: We are not adopting this recommendation. Under our 
current policies, we notify an individual that he or she is entitled to 
SSI benefits. That notice would state the amount of the benefits and 
explain any adjustment to the benefit amount, including adjustment to 
collect any outstanding overpayment balance. The notice informs the 
individual that he or she may appeal the determination but does not 
discuss waiver of collection of the overpayment.
    We do not intend to add information on waiver to this type of 
notice. The individual would already have been notified several times 
about the right to request waiver. The initial notice of overpayment 
discusses waiver. If we select the debt for the Treasury Offset 
Program, we would send a pre-offset notice which explains waiver, as 
required by 31 U.S.C. 3720A. Under the provisions of new 
Sec. 416.572(c) of the regulations, an individual who was subject to 
cross-program recovery would also have been given information about

[[Page 38906]]

waiver in the new written notice about our intent to collect the SSI 
debt from title II benefits. We believe these multiple notifications of 
the right to request waiver are sufficient. If an individual does 
request waiver when he or she becomes eligible for SSI, we would make 
our determination under section 1631(b)(1) of the Social Security Act, 
the regulations set out in 20 CFR Sec. Sec. 416.550-416.556 and the 
procedures adopted to implement them.
    Comment: One organization asserted that SSA should revise 
Sec. 416.572(e) to allow individuals found guilty of willful 
misrepresentation or concealment of material information in connection 
with the overpayment to request a rate of withholding of less than 100 
percent. The organization felt the person should be afforded the 
opportunity to prove that a 100 percent withholding would be a hardship 
because it would deprive him or her of ordinary and necessary living 
expenses.
    Response: We are not adopting this suggestion. When an individual 
is found guilty of willful misrepresentation or concealment of material 
information in connection with the overpayment, section 1147(a)(2)(A) 
of the Social Security Act permits us to collect by withholding up to 
100 percent of the benefits payable in a month until we collect the 
entire overpayment. We have a stewardship responsibility to ensure that 
the programs we administer are run efficiently and effectively, to 
recover overpayments and to prevent and deter fraud. Our longstanding 
policy is to collect debts arising from willful misrepresentation or 
concealment at the rate of 100 percent withholding. We believe that the 
100 percent withholding is an appropriate penalty for such conduct and 
demonstrates to anyone who is contemplating such conduct that the 
consequences will be significant. In addition, we believe that allowing 
someone who obtains benefits through fraudulent acts to repay the debt 
over an extended period is not appropriate public policy.

Regulatory Procedures

Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these final regulations meet the criteria for a 
significant regulatory action under Executive Order (E.O.) 12866. Thus, 
the regulations were reviewed by OMB. However, the estimated amounts of 
the savings or costs involved do not cross the threshold for an 
economically significant regulation as defined in E.O. 12866. The 
estimated 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 final 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 final regulations will impose no new reporting or 
recordkeeping requirements requiring OMB clearance. In fact, these 
final rules would decrease the paperwork burden on the public by 833 
burden hours per year. This is because, under the final rules, overpaid 
persons will no longer complete Form SSA-730-U2 (Request To Have 
Supplemental Security Income Overpayment Withheld From My Social 
Security Benefits), OMB Control Number 0960-0549, 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; 96.002, Social Security-Retirement 
Insurance; 96.004, Social Security-Survivors 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: May 7, 2001.
Larry G. Massanari,
Acting Commissioner of Social Security.

    For the reasons set forth in the preamble, we are amending 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 to correct errors in 
payments 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 (PRIVATE)

    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.

    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

[[Page 38907]]

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. So, if we 
were recovering 10 percent of that month's benefit, we would be 
recovering $200. The monthly benefit payable for subsequent months 
is $1000. So, if we were recovering 10 percent of that month's 
benefit, we would be recovering $100. If $200 would be deducted from 
the person's title II benefits in a later month because of excess 
earnings as described in Sec. Sec. 404.415 and 404.416 of this 
chapter, the benefit payable in that month for purposes of cross-
program recovery would be $800. So, if we were recovering 10 percent 
of that month's benefit, we would be recovering $80.

    (3) Not currently eligible for SSI cash benefits. This means that a 
person is not receiving any cash payment, including State supplementary 
payments that we administer, 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;
    (4) You may request that we withhold a different amount (the notice 
will not include this information if paragraph (e)(3) of this section 
applies); and
    (5) You may ask us to waive collection of this overpayment balance.
    (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)(3) of this section applies.
    (4) If within that 30-day period you ask us to waive recovery of 
the overpayment balance, we will not begin cross-program recovery 
before we review the matter and notify you of our decision in writing. 
See Secs. 416.550 through 416.556.
    (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) In determining whether to grant your request that we withhold 
at a lower rate than 10 percent of the title II benefits payable in a 
month, we will use the criteria applied under Sec. 416.571 to similar 
requests about withholding from title XVI benefits.
    (3) 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. 01-18592 Filed 7-25-01; 8:45 am]
BILLING CODE 4191-02-P