[Federal Register Volume 67, Number 107 (Tuesday, June 4, 2002)]
[Rules and Regulations]
[Pages 38381-38384]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-13902]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Part 416

RIN 0960-AF53


Collection of Supplemental Security Income Overpayments From 
Special Benefits for Certain World War II Veterans

AGENCY: Social Security Administration.

ACTION: Final rules.

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SUMMARY: We are revising our regulations to permit the Social Security 
Administration (SSA) to recover Supplemental Security Income (SSI) 
overpayments under title XVI of the Social Security Act (the Act) by 
adjusting the amount of Special Benefits for Certain World War II 
Veterans (SVB) payable under title VIII 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 any State 
supplementary payments that we administer. Also, the amount of SVB to 
be withheld in a month to recover the SSI overpayment will not exceed 
10 percent 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 SSI overpayment. If there was willful 
misrepresentation or concealment, the entire SVB amount will be 
withheld to recover the SSI overpayment. These revisions will permit 
SSA to recover SSI overpayments from SVB payable to the overpaid 
individual when SSI cash benefits are not payable.

EFFECTIVE DATE: These rules are effective on July 5, 2002.

FOR FURTHER INFORMATION CONTACT: Patricia Hora, Social Insurance 
Specialist, Office of Process and Innovation Management, 2109 West Low 
Rise Building, Social Security Administration, 6401 Security Boulevard, 
Baltimore, Maryland 21235-6401, [email protected], (410) 965-7183 or 
TTY (410) 966-5609 for information about these rules. For information 
on eligibility or filing for benefits, call our national toll-free 
numbers, 1-800-772-1213 or TTY 1-800-325-0778 or visit our Internet web 
site, SSA Online, at http://www.ssa.gov.

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. 
Social Security Online): http://www.ssa.gov/regulations/. Electronic 
copies of public comments may also be found on this site.

SUPPLEMENTARY INFORMATION: On December 14, 1999, Pub. L. 106-169, the 
``Foster Care Independence Act of 1999'' was enacted. Section 251(a) of 
Pub. L. 106-169 added title VIII to the Social Security Act, 
establishing a new benefit program--Special Benefits for Certain World 
War II Veterans. Under this program, if you are a World War II veteran 
who was eligible for SSI for December 1999 and for the month of 
application for SVB, and who meets other criteria specified in the law, 
you may be entitled to SVB for each month in which you reside outside 
the United States.
    Section 251(b) of Pub. L. 106-169 amended section 1147 of the Act. 
Prior to the enactment of Pub. L. 106-169, section 1147 of the Act 
(added by section 8 of Pub. L. 105-306) allowed SSA to recover SSI 
overpayments from you, if you were no longer receiving SSI cash 
payments, by reducing the amount of any benefits payable to you under 
title II of the Act. Final regulations on recovery of SSI overpayments 
from title II benefits were published on July 26, 2001, at 66 FR 38902. 
Section 251(b) of Pub. L. 106-169 amended section 1147 to allow 
recovery of SSI overpayments from title VIII benefits, as well as title 
II benefits, payable in a month. Throughout this preamble, this type of 
overpayment recovery is called ``cross-program recovery.'' With certain 
exceptions, the amount of the reduction permitted under cross-program 
recovery cannot exceed 10 percent of the benefits payable in a month.
    On July 26, 2001 we published a Notice of Proposed Rulemaking in 
the Federal Register at 66 FR 38963 and provided a 60-day period for 
interested individuals and organizations to comment on the proposed 
rules. We received one public comment from an individual. A summary of 
the comment and our response to it follows.
    Comment: The commenter believes we should not reduce an 
individual's SVB payments to recover an SSI overpayment unless there 
was willful concealment or misrepresentation on the part of the 
overpaid person. The commenter points out that the overpaid individual 
is an aged veteran who may not even understand why the overpayment 
occurred. The commenter argues that, rather than holding the veteran 
liable, we should make stronger efforts to eliminate payment errors 
within SSA.

[[Page 38382]]

    Response: We are not adopting this comment. As indicated above, 
Congress specifically amended section 1147 of the Act to give SSA 
authority to use cross-program recovery to recover SSI overpayments 
from SVB payments. In recognition of the fact that the veteran is an 
elderly former SSI recipient, Congress limited to 10 percent the amount 
we may withhold from an individual's monthly SVB payment to recover an 
SSI overpayment. In addition, in the cross-program recovery notice that 
we will send to an overpaid individual, we will explain that he/she has 
both the right to request that we waive recovery of the overpayment and 
the right to request that we use a rate of withholding that is less 
than 10 percent of the monthly payment amount. We will waive recovery 
of an SSI overpayment in any case where the individual was without 
fault in causing the overpayment and recovery would either defeat the 
purpose of title XVI (i.e., deprive the individual of income or 
resources needed for ordinary and necessary living expenses) or be 
against equity and good conscience (e.g., the overpaid individual 
changed his or her position for the worse or relinquished a valuable 
right in reliance on the overpayment). We believe the final rules 
strike the proper balance between protecting the rights of the overpaid 
individual and satisfying our obligation to ensure the fiscal integrity 
of the SSI program.
    Regarding payment errors within SSA, we are pursuing several 
initiatives that address the causes of overpayments in the benefit 
programs we administer. We are hopeful that these initiatives will help 
to reduce the number of overpayments that occur.
    We are publishing these final rules with only minor changes from 
the proposed rule.

Explanation of Changes

    In order to implement cross-program recovery from SVB, we are 
modifying several provisions of Sec. 416.572. Paragraph (a) is revised 
as follows:
     We are revising the definition of ``cross-program 
recovery'' to include the process of collecting title XVI overpayments 
from SVB payable to you in a month.
     We are revising the definition of ``benefits payable in a 
month'' to include the amount of SVB you would actually receive in a 
given month. Under this definition, ``benefits payable in a month'' 
includes the monthly SVB amount and any past due SVB you receive, after 
any reduction by the amount of income for the month as required by 
section 805 of the Act (42 U.S.C. 1005). We have added to the 
definition an example to show how we determine SVB payable in a month.
     We changed the language of paragraph (a)(3), as published 
with the notice of proposed rulemaking, to conform it to the language 
of the final regulation published at 66 FR 38902, 38907.
    We are revising paragraph (b) of Sec. 416.572 to explain that we 
may use cross-program recovery to collect title XVI overpayments if you 
are not currently receiving SSI cash benefits and are receiving 
benefits under title II or title VIII of the Act. Therefore, if your 
title II and/or title VIII benefits are being adjusted to recover a 
title XVI overpayment and you again become eligible for SSI benefits, 
cross-program recovery will end with the month in which SSI cash 
benefits resume. We will begin collecting the remaining title XVI 
overpayment by monthly adjustment of SSI payments. We are also revising 
paragraph (b) to explain that:
     We will not start cross-program recovery from SVB if we 
already are adjusting SVB to recover an SVB overpayment, and
     We will not start cross-program recovery from title II 
benefits if we are already adjusting title II benefits to recover an 
SVB or title II overpayment.
    Adjustment of title VIII and title II benefits to recover SVB 
overpayments is authorized by section 808(a)(1) of the Act (42 U.S.C. 
1008(a)(1)).
    Paragraph (c) of Sec. 416.572 lists the information that we include 
in the notice sent to a person whose benefits are subject to cross-
program recovery. We are revising paragraph (c)(2) to add that the 
information will include the amount we will withhold from SVB payable 
in a month. The notice will state that you may ask us to review our 
determination that you still owe the overpayment balance and that you 
may ask us to waive collection of the overpayment balance. The notice 
will inform you how to request a waiver. Unless you or your spouse 
willfully misrepresented or concealed material information in 
connection with the overpayment, the notice also will state that you 
may request that we withhold from SVB a different amount than the 
amount stated in the notice.
    Paragraph (d) of Sec. 416.572 currently explains that we will begin 
to withhold no sooner than 30 days after the date of the notice. If you 
pay the entire overpayment balance within that 30-day period, we will 
not impose cross-program recovery. If within the 30-day period you ask 
us to review the determination that you still owe us the overpayment 
balance and/or request us to waive recovery of the overpayment balance, 
we will not begin cross-program recovery until we review the matter(s) 
and notify you of our decision(s). If within the 30-day period, you 
request that we withhold a different amount, we will not begin cross-
program recovery until we determine the amount we will withhold. These 
provisions apply when we pursue cross-program recovery to collect SSI 
overpayments from SVB payable under title VIII of the Act. No revisions 
to the regulatory text are needed.
    We are revising paragraph (e) of Sec. 416.572 to explain that when 
cross-program recovery is applied, we will collect the overpayment at a 
rate of 10 percent of the title II benefits and SVB payable in any 
month, respectively. However, we will collect at a rate of 100 percent 
of the title II benefits and SVB payable in any month if you (or your 
spouse) willfully misrepresented or concealed material information in 
connection with the overpayment.

Other Revisions

    We are revising the language of Sec. 416.570 to state that we will 
not adjust title XVI benefits to recover SVB overpayments without a 
specific request from the SSI beneficiary. Without the consent of the 
overpaid person, we have no authority to recover SVB overpayments from 
SSI payments.

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 251(b)(7) of Pub. L. 106-169 are negligible, 
less than $2.5 million over the next 10 years. The administrative 
impact is also negligible.

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 rules contain reporting requirements at sections 
416.570 and

[[Page 38383]]

416.572(e). The public reporting burden is accounted for in the 
Information Collection Requests for the forms that the public uses to 
submit the information to SSA. Consequently, a 1-hour placeholder 
burden is being assigned to the specific reporting requirements 
contained in these rules. We are seeking clearance of the burden 
referenced in these rules because the rules were not considered during 
the clearance of the forms. An Information Collection Request has been 
submitted to OMB. While these rules will be effective 30 days from 
publication, these burdens will not be effective until cleared by OMB. 
We are soliciting comments on the accuracy of the agency's burden 
estimate; the need for the information; its practical utility; ways to 
enhance its quality, utility and clarity; and on ways to minimize the 
burden on respondents, including the use of automated collection 
techniques or other forms of information technology. We will publish a 
notice in the Federal Register upon OMB approval of the information 
collection requirements. Comments should be submitted to the OMB desk 
officer for SSA within 30 days of publication of these final rules at 
the following address: Office of Management and Budget, Attn: Desk 
Officer for SSA, New Executive Office Building, Room 10230, 
725 17th St., NW., Washington, DC 20530.

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

List of Subjects in 20 CFR Part 416:

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

    Dated: March 27, 2002.
Jo Anne B. Barnhart,
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 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND 
DISABLED

    1. The authority citation for Subpart E of Part 416 continues 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.


    2. 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, title VIII or title 
XVIII of the Act will be recovered by adjusting SSI benefits.
* * * * *

    3. Section 416.572 is amended by revising the heading and 
paragraphs (a), (b), (c)(2), and (e) to read as follows:


Sec. 416.572  Are title II benefits and title VIII 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 and title VIII of the Act.
    (2) Benefits payable in a month. For purposes of this section, 
benefits payable in a month means the amount of title II or title VIII 
benefits that you would actually receive in that month. For title II 
benefits, 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. For title VIII benefits, it includes your monthly benefit 
and any past due benefits after any reduction by the amount of income 
for the month as required by section 805 of the Act.

    Title II 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 amount, 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 Secs. 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.
    Title VIII Example: A person qualifies for monthly title VIII 
benefits of $384. The person is receiving a monthly pension payment 
of $150 from his employer. The title VIII benefit payable in a 
particular month would be reduced by $150 under section 805 of the 
Act (42 U.S.C. 1005). The title VIII benefit payable and subject to 
withholding in that month for purposes of cross-program recovery 
would be $234. So, if we were recovering 10 percent of that month's 
benefit, we would be recovering $23.40.

    (3) Not currently eligible for SSI cash benefits. This means that 
you are 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) Except as provided in paragraphs (b)(2) through (4) of this 
section, 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 or title VIII benefits.
    (2) We will not start cross-program recovery against your title II 
or title VIII benefits if you are refunding your title XVI overpayment 
by regular monthly installments.
    (3) We will not start cross-program recovery against your title II 
benefits if we are adjusting your title II benefits to recover a title 
II overpayment under Sec. 404.502 of this chapter or a title VIII 
overpayment under section 808(a)(1) of the Act (42 U.S.C. 1008(a)(1)).
    (4) We will not start cross-program recovery against your title 
VIII benefits if we are adjusting your title VIII benefits to recover a 
title VIII overpayment under section 808(a)(1) of the Act (42 U.S.C. 
1008(a)(1)).
    (c) * * *
    (2) We will withhold a specific amount from the title II benefits 
and/or title VIII benefits payable to you in a month (see paragraph (e) 
of this section);
* * * * *
    (e) Rate of withholding.
    (1) We will collect the overpayment at the rate of 10 percent of 
the title II benefits and title VIII 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 or title VIII 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

[[Page 38384]]

overpayment at the rate of 100 percent of the title II benefits and 
title VIII 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. 02-13902 Filed 6-3-02; 8:45 am]
BILLING CODE 4191-02-P