[Federal Register Volume 68, Number 214 (Wednesday, November 5, 2003)]
[Proposed Rules]
[Pages 62670-62688]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-27434]



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Part II





Social Security Administration





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20 CFR Parts 404, 408, and 416



Special Benefits for Certain World War II Veterans; Reporting 
Requirements, Suspension and Termination Events, Overpayments and 
Underpayments, Administrative Review Process, Claimant Representation, 
and Federal Administration of State Recognition Payments; Proposed Rule

  Federal Register / Vol. 68, No. 214 / Wednesday, November 5, 2003 / 
Proposed Rules  

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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404, 408, and 416

RIN 0960-AF72


Special Benefits for Certain World War II Veterans; Reporting 
Requirements, Suspension and Termination Events, Overpayments and 
Underpayments, Administrative Review Process, Claimant Representation, 
and Federal Administration of State Recognition Payments

AGENCY: Social Security Administration (SSA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: We propose to add six new subparts to part 408 of our 
regulations and reserve an additional subpart for future use. Part 408 
sets forth our rules applicable to claims for special veterans benefits 
(SVB) under title VIII of the Social Security Act (the Act). The title 
VIII program was effective in May 2000 and provides monthly benefits to 
certain World War II (WWII) veterans who previously were eligible for 
supplemental security income (SSI) payments under title XVI of the Act 
and reside outside the United States. In these proposed rules, we are 
setting forth six new subparts that would deal with the following 
topics: the events you must report to us after you apply for SVB, the 
circumstances that will affect your SVB entitlement, how we handle 
overpayments and underpayments under the SVB program, how the 
administrative review process works, your right to appoint someone to 
represent you in your dealings with us, and administration agreements 
we may enter into with a State under which we will pay supplemental 
recognition payments to you on the State's behalf.
    In addition, we propose to reserve for future use a subpart in part 
408 that would explain when we will pay your SVB to someone else on 
your behalf. We plan to issue those proposed rules at a later date.

DATES: To be sure your comments are considered, we must receive them by 
January 5, 2004.

ADDRESSES: You may give us your comments by: using our Internet site 
facility (i.e., Social Security Online) at http://policy.ssa.gov/pnpublic.nsf/LawRegs; e-mail to [email protected]; telefax to (410) 
965-2830; or letter to the Commissioner of Social Security, PO Box 
17703, Baltimore, MD 21235-7703. You may also deliver them to the 
Office of Regulations, Social Security Administration, 100 Altmeyer 
Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, between 8 
a.m. and 4:30 p.m. on regular business days. Comments are posted on our 
Internet site for your review, or you may inspect them physically on 
regular business days by making arrangements with the contact person 
shown in this preamble.

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.gpoaccess.gov/fr/index.html. It 
is also available on the Internet site for SSA (i.e., Social Security 
Online): http://policy.ssa.gov/pnpublic.nsf/LawRegs.

FOR FURTHER INFORMATION CONTACT: Robert J. Augustine, Social Insurance 
Specialist, Office of Regulations, Social Security Administration, 100 
Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, 
(410) 965-0020 or TTY (410) 966-5609 for information about these 
proposed rules. For information on eligibility or claiming benefits, 
call our national toll-free number, 1-800-772-1213 or TTY 1-800-325-
0778 or visit our Internet site, Social Security Online, at http://www.socialsecurity.gov/.

SUPPLEMENTARY INFORMATION:

Statutory Provisions

    Section 251 of the Foster Care Independence Act of 1999 (Pub. L. 
No. 106-169), enacted on December 14, 1999, added a new title VIII to 
the Act (Special Benefits for Certain World War II Veterans). Title 
VIII requires SSA to pay special veteran's benefits (SVB) to certain 
WWII veterans who reside outside the United States. Establishing SVB 
entitlement is a two-step process: first, you need to show that you 
meet certain qualifying requirements; once we determine that you 
qualify for SVB, you will be entitled to SVB payments after you begin 
residing outside the U.S.
    On April 4, 2003, we published final rules that set forth the rules 
we follow in determining whether you qualify for SVB, how you file for 
benefits, what evidence you must give us in connection with your claim 
and how we evaluate that evidence, and how we compute and pay SVB (67 
FR 55774). We now propose to add six subparts in part 408 that would 
provide additional guidelines for the title VIII program with respect 
to the topics discussed below, and reserve for future use a subpart on 
representative payment in the title VIII program.

Reporting Responsibilities Under the SVB Program

    Section 806 of the Act directs SSA to prescribe requirements 
related to the reporting of any events and changes in circumstances 
that may affect the amount of, your qualification for, or your 
continuing entitlement to receive SVB. Among the events and changes in 
circumstances that could affect the amount of, your qualification for, 
or your continuing entitlement to receive SVB and which therefore need 
to be reported to us are:
    [sbull] You change your mailing address or the address where you 
live.
    [sbull] You plan to return to the United States to live on a 
permanent basis or you plan to visit the United States for more than 
one full calendar month. To receive SVB, you must be residing outside 
the United States. If you return to the U.S. on a permanent basis, we 
need to stop your SVB payments effective with the first full calendar 
month you begin residing in the United States. Although SVB is payable 
if you return to the United States for a temporary visit of less than 
one calendar month, your benefits may be suspended if you remain in the 
United States for more than one full calendar month. There are 
exceptions if you are unable to return to your foreign residence 
because of circumstances beyond your control or you are in the United 
States to present evidence or testimony in the appeal of a claim under 
any of the programs we administer.
    [sbull] The amount of your other benefit income changes. Since the 
full SVB is reduced by the amount of any other benefit income you 
receive, a change in the amount of other benefit income you receive 
could result in an increase or decrease in the amount of the SVB we pay 
you.
    [sbull] You die or your representative payee dies. If you die, your 
SVB entitlement ends. If your representative payee dies, we need to 
locate a new payee to receive your SVB payments on your behalf.
    [sbull] Any of the SVB disqualifying events listed in section 804 
of the Act occurs. This includes removal or deportation from the United 
States; fleeing from the United States to avoid prosecution, or custody 
or confinement after conviction, under the laws of the United States or 
the jurisdiction in the United States from which you flee, for a crime 
or an attempt to commit a crime that is a felony or, in the State of 
New Jersey, is a high misdemeanor; violating a condition of probation 
or parole imposed under Federal or State law; or, in the case of an 
individual who is not

[[Page 62671]]

a citizen or national of the United States, taking up residence in a 
country to which payments are withheld by the Treasury Department 
(Treasury) under 31 U.S.C. 3329. If a disqualifying event occurs and we 
have not yet found you qualified for SVB, we will deny your SVB claim. 
If we found you met all the requirements for SVB when the disqualifying 
event occurs, we will suspend your SVB payments.

Suspension and Termination of SVB

    Section 810(d) of the Act authorizes the Commissioner of SSA to 
prescribe appropriate regulations for suspending SVB payments and 
terminating SVB entitlement. Once you are qualified for SVB, we will 
suspend your SVB payments if:
    [sbull] You are no longer residing outside the United States;
    [sbull] You fail to give us information we need in connection with 
your claim;
    [sbull] We are unable to locate you;
    [sbull] The amount of your other benefit income increases so that 
it exceeds the maximum SVB payable (75 percent of the SSI Federal 
Benefit Rate (FBR) payable to an individual);
    [sbull] You are removed (including deported) from the United States 
pursuant to section 237(a) or 212(a)(6)(A) of the Immigration and 
Nationality Act;
    [sbull] You are fleeing to avoid prosecution, or custody or 
confinement after conviction, under the laws of the United States or 
the jurisdiction in the United States from which you fled, for a crime 
or an attempt to commit a crime that is a felony under the laws of the 
place from which you fled, or in the case of the State of New Jersey, 
is a high misdemeanor;
    [sbull] You violate a condition of probation or parole imposed 
under Federal or State law; or
    [sbull] You are not a citizen or national of the United States and 
begin residing in a country to which payments to residents of that 
country are withheld by the Treasury Department under 31 U.S.C. 3329.
    We will terminate your SVB entitlement for any one of the following 
reasons:
    [sbull] Your benefit payments are suspended for 12 consecutive 
calendar months;
    [sbull] You file a written request that we terminate your 
entitlement; or
    [sbull] You die.

Overpayments and Underpayments

    Section 808 of the Act deals with overpayments and underpayments 
under the SVB program. With respect to overpayments, section 808 
authorizes the Commissioner to recover an SVB overpayment by reducing 
the amount of any future SVB payments you are due unless you refund the 
full amount of the overpayment to us. If we are unable to recover the 
overpayment by direct refund or benefit withholding (for example, 
because your SVB payments are in suspense), section 808 authorizes us 
to adjust the amount of any social security benefits you receive under 
title II of the Act. We will also notify the Secretary of the Treasury 
to withhold the overpayment from any Federal income tax refund you may 
be due in the future, as authorized under 31 U.S.C. 3720A. Section 
808(c) of the Act further stipulates that there will be no adjustment 
of benefits or other overpayment recovery if you were without fault in 
creating the overpayment and adjustment or recovery would defeat the 
purpose of title VIII or be against equity and good conscience. If you 
die and have an outstanding SVB overpayment, we will seek refund of the 
overpayment from your estate.
    With respect to underpayments, section 808 specifies that, if you 
are living at the time we take action on the underpayment, we will pay 
the amount due directly to you or to your representative payee, if one 
has been appointed. If you die before we make the payment to you, the 
amount due reverts to the general fund of the United States Treasury.

Determinations and the Administrative Review Process

    Section 809 of the Act gives you the right to request that we 
review our determinations about your qualification for or entitlement 
to or the amount of your SVB payments. We also give you the right to 
request review of certain other determinations we make that you 
disagree with. We refer to determinations on which you may request 
administrative review as ``initial determinations.'' Our administrative 
review process consists of several steps, which usually must be 
requested within certain time periods and in the following order:
    [sbull] Reconsideration;
    [sbull] Hearing before an administrative law judge (ALJ); and
    [sbull] Appeals Council (AC) review.

These are the same steps we provide for review of initial 
determinations under the titles II and XVI programs.

Claimant Representation

    Titles II and XVI of the Act contain detailed provisions on 
claimant representation that give individuals the right to select 
another person (including an attorney) to represent them in their 
dealings with us and that regulate many aspects of that relationship. 
Though title VIII contains no specific provisions on claimant 
representation, we propose to extend to the SVB program by regulation 
many of the rules we follow on claimant representation in the SSI 
program. Specifically, we believe the SSI rules on the appointment, 
authority, conduct, and standards of responsibility of a representative 
should also apply to the SVB program. We also believe that the SSI 
rules we follow when a representative violates any of these 
requirements, rules, or standards should apply to a representative 
under the SVB program. However, we do not plan to extend to the title 
VIII program the SSI rules that apply to fees a representative may 
charge.

Federal Administration of State Recognition Payments

    Section 810A of the Act authorizes SSA to enter an agreement with 
any State (or one of its political subdivisions) that provides cash 
payments (referred to as State recognition payments) on a regular basis 
to individuals who are entitled to SVB under which SSA will make the 
payments on behalf of the State. Under section 810A, any State that 
enters into an agreement must pay to SSA an amount equal to the 
recognition payments made on its behalf as well as a separate fee to 
cover SSA's costs of administering the State program.

Explanation of New Subparts

    We are adding six new subparts to part 408 of our regulations and 
reserving an additional subpart for future use. Following is a list of 
the proposed subparts that includes a brief description of each 
proposed section in the subpart. We are also revising Sec.  408.101 to 
add these new subparts to the overview of part 408.

Subpart F--Reserved for Future Use

    We propose to reserve for future use subpart F in part 408 for our 
rules on representative payment of SVB. We plan to issue those proposed 
rules at a later date.

Subpart G--Reports Required

    This subpart would explain which events you must report to us after 
you file for SVB, what information your reports must include, and when 
your reports are due. Specifically:
    [sbull] Section 408.701 provides an overview of what subpart G is 
about.
    [sbull] Section 408.704 explains that you are responsible for 
making your own reports if you receive your own benefits.

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If you have a representative payee, you or your representative must 
make the required reports, unless you have been legally adjudged 
incompetent. In that case, your representative payee is responsible for 
making required reports to us.
    [sbull] Section 408.708 describes the events you must report to us.
    [sbull] Section 408.710 describes the information that you must 
include in your report. This includes the name and social security 
number of the person about whom you are making the report, the event 
you are reporting and the date the event occurred, and your name, if 
you are not the beneficiary.
    [sbull] Section 408.712 explains that you can make your report in 
writing, orally, or using other means of reporting (e.g., fax or e-
mail).
    [sbull] Section 408.714 explains that you should report an event as 
soon as a reportable event (described in Sec.  408.708) occurs or, in 
cases where we request a report, within 30 days of our written request. 
If you fail to make a required report within the prescribed period, we 
may suspend your benefit payments.

Subpart H--Suspension and Termination of SVB

    This subpart would explain the events that would cause us to 
suspend your SVB payments or terminate your SVB entitlement. 
Specifically:
    [sbull] Section 408.801 provides an overview of what subpart H is 
about.
    [sbull] Section 408.802 explains when suspension of your SVB 
payments is proper and when we will resume your payments.
    [sbull] Section 408.803 explains the circumstances under which we 
will suspend your SVB payments for failing to comply with our request 
for necessary information.
    [sbull] Section 408.806 explains the circumstances under which we 
will suspend your SVB payments because you are no longer residing 
outside the United States.
    [sbull] Section 408.808 explains the circumstances under which we 
will suspend your SVB payments because your other benefit income 
exceeds the maximum SVB payable.
    [sbull] Section 408.809 explains the circumstances under which we 
will suspend your SVB payments because you have been removed (including 
deported) from the United States under sections 237(a) or 212(a)(6)(A) 
of the Immigration and Nationality Act.
    [sbull] Section 408.810 explains the circumstances under which we 
will suspend your SVB payments if you are fleeing the United States to 
avoid criminal prosecution or custody or confinement after a U.S. 
conviction for certain crimes or if you violate a condition of 
probation or parole under Federal or State law.
    [sbull] Section 408.812 explains the circumstances under which we 
will suspend your SVB payments if you begin residing in a country to 
which payments are withheld by the Treasury Department under 31 U.S.C. 
3329. This section only applies to you if you are not a citizen or 
national of the United States.
    [sbull] Section 408.814 explains that you (or your representative 
payee) can request that your SVB entitlement be terminated. It also 
explains when your entitlement would end based on your request and the 
circumstances under which you would be required to repay benefits you 
have already received.
    [sbull] Section 408.816 explains that SVB entitlement ends with the 
month of death.
    [sbull] Section 408.818 explains that your SVB entitlement will 
terminate if your SVB payments have been in suspense for 12 consecutive 
months.
    [sbull] Section 408.820 explains that, whenever we plan to suspend 
or reduce your SVB payments or terminate your SVB entitlement, we will 
send you a notice of our intended action. The notice would explain your 
right to appeal that action and the time frames within which your 
appeal must be filed. The notice will also explain if you have a right 
to continue receiving benefits while you appeal the suspension, 
reduction or termination action, and your right to waive continued 
payment during your appeal.

Subpart I--Overpayments and Underpayments

    This subpart would set forth the rules we would follow when you 
receive more or less than you should have in SVB payments. These 
proposed rules are similar in many respects to the rules we currently 
follow in dealing with overpayments and underpayments under the titles 
II and XVI programs. Specifically:
    [sbull] Section 408.900 provides an overview of what is covered in 
subpart I.
    [sbull] Section 408.901 defines ``underpayment''--payment of less 
than the amount due for a given period.
    [sbull] Section 408.902 defines ``overpayment''--payment of more 
than the amount due for a given period.
    [sbull] Section 408.903 explains how we determine the amount that 
you are underpaid or overpaid. It also explains that there cannot be an 
underpayment for a period in which we paid more than the correct 
amount, even though we waived recovery of any overpayment for that 
period.
    [sbull] Section 408.904 explains that, if you are underpaid, the 
amount due will be paid to you in a separate payment or by increasing 
the amount of your monthly SVB payment. It also explains that, if you 
die before we pay you any part of an underpayment, the balance of the 
underpayment reverts to the U.S. Treasury.
    [sbull] Section 408.905 explains that we will withhold or adjust an 
underpayment due you for a period to reduce any overpayment to you for 
a different period.
    [sbull] Section 408.910 explains the circumstances under which we 
will waive adjustment or recovery of an overpayment. Specifically, we 
will waive adjustment or recovery if you were without fault in 
connection with the overpayment and recovery of the overpayment would 
defeat the purpose of the SVB program or be against equity and good 
conscience. These are the same criteria we use to determine whether we 
can waive recovery of an overpayment under the title II program.
    [sbull] Section 408.911 explains that, when we waive recovery of an 
overpayment, this frees you from having to repay the overpaid amount.
    [sbull] Section 408.912 explains how we determine whether you were 
without fault in creating an overpayment.
    [sbull] Section 408.913 explains how we determine whether recovery 
of an overpayment would defeat the purpose of the SVB program.
    [sbull] Section 408.914 explains the criteria we use to determine 
whether recovery of an overpayment would be against equity and good 
conscience.
    [sbull] Section 408.918 explains that when you receive more or less 
than the correct amount of SVB, we will send you a notice about the 
incorrect payment. If you are overpaid, the notice will tell you about 
recovery of the overpayment and of your rights to appeal the 
overpayment determination and to request that we waive recovery of the 
overpayment.
    [sbull] Section 408.920 explains that we will seek refund of the 
overpayment if we do not waive recovery. We will seek refund from your 
estate if you die before we recover the full amount of the overpayment.
    [sbull] Section 408.922 explains that, if you are overpaid, have 
not refunded the overpayment to us, and are receiving SVB payments, we 
will adjust your future payments to recover the overpayment.
    [sbull] Section 408.923 explains that, in adjusting your SVB 
payments to recover an overpayment, the amount that we

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will withhold is limited to 10 percent of the maximum SVB monthly 
payment amount. This section also explains that you have the right to 
request a higher or lower rate of withholding and explains how we 
determine an appropriate lower rate of withholding when you request a 
lower rate. If we find that you engaged in fraud, misrepresentation or 
concealment of material information in connection with the overpayment, 
we will not limit the amount we will withhold from SVB each month.
    [sbull] Section 408.930 explains that, if you received an SVB 
overpayment that you have not refunded to us and you are not currently 
receiving SVB payments, but are receiving title II benefits, we will 
adjust your title II benefits to recover the SVB overpayment. This 
section also explains the circumstances when we will not adjust your 
title II benefits.
    [sbull] Section 408.931 explains that the rate of withholding we 
will use to recover an SVB overpayment from your title II benefits is 
limited to 10 percent of title II benefits payable to you in a month 
except that we will withhold 100 percent of your benefits if you 
willfully misrepresented or concealed material information in 
connection with the overpayment. This section also explains that you 
may request a higher or lower rate of withholding.
    [sbull] Section 408.932 explains that we will send you a notice if 
we plan to adjust your title II benefits to recover an SVB overpayment. 
The notice will tell you (1) the amount of the overpayment that you 
owe, (2) the amount we plan to withhold from your title II benefits to 
recover the overpayment, (3) that you can ask us to review our 
determination that you still owe the amount stated in the notice, (4) 
that you may request a different rate of withholding, and (5) that you 
can request a waiver of recovery of the overpayment balance.
    [sbull] Section 408.933 explains when we will begin adjusting your 
title II benefits to recover an SVB overpayment. We will not take any 
action for 30 days after the date of the notice. If you request review, 
waiver or a different rate of adjustment during that 30-day period, we 
will take no action before we send you written notice of our decision 
on the matter.
    [sbull] Section 408.940 explains that, where an overpaid person 
does not refund an overpayment to us and is not currently receiving 
title II or SVB payments from which we can withhold the overpayment, we 
will refer the overpayment to the Department of the Treasury for 
withholding from any Federal income tax refund you may be due.
    [sbull] Section 408.941 explains that we will send you a notice 
before we refer an overpayment to Treasury for tax refund offset. The 
notice will (1) tell you the amount of the overpayment, (2) give you 60 
days within which to either repay the amount or ask that we waive it, 
(3) explain the conditions under which we will waive the overpayment, 
(4) explain that we will review any evidence you wish to present that 
the overpayment is not past due or legally enforceable, and (5) explain 
your right to inspect or copy our records related to the overpayment.
    [sbull] Section 408.942 explains that, before we refer an 
overpayment to Treasury for tax refund offset, you will have the chance 
to submit evidence that the debt is not past due or legally 
enforceable. After reviewing the evidence submitted, we will make 
findings.
    [sbull] Section 408.943 explains that we will issue written 
findings to you, your attorney or other representative concerning 
whether the overpayment is past due and legally enforceable. These 
written findings are the final agency action on these issues.
    [sbull] Section 408.944 explains that, if you tell us you wish to 
inspect or copy our records related to the overpayment, we will either 
notify you of the time and place you may do so or mail copies of the 
records to you.
    [sbull] Section 408.945 explains that if, within 60 days after the 
date of the notice, you present evidence that the overpayment is not 
past-due or legally enforceable or ask us to waive collection of the 
overpayment, we will not refer the overpayment to Treasury for offset 
until we issue written findings on the matter.
    [sbull] Section 408.946 explains that if a tax refund is 
insufficient to recover an overpayment in a given year, the case will 
remain with Treasury for recovery from future income tax refunds you 
may be due.
    [sbull] Section 408.950 explains that, when appropriate, we may 
accept a compromise settlement (payment of less than the full amount of 
the overpayment) to discharge the entire overpayment debt or we may 
suspend or terminate our efforts to collect the overpayment. We would 
consider taking one of these actions if we find that you or your estate 
do not have the ability to pay the full amount of the overpayment 
presently or in the future within a reasonable period of time or that 
the cost of collection is likely to exceed the amount of recovery. In 
deciding whether to take any of these actions, we would apply the rules 
that we apply concerning such actions for title II overpayments at 
Sec.  404.515(b)-(f) and other applicable rules, including the Federal 
Claims Collection Standards (FCCS) at 31 CFR parts 902 and 903, 
established under the authority of 31 U.S.C. 3711(a)(d). If we suspend 
or terminate collection, we may take collection action in the future in 
accordance with Federal law and the FCCS. Failure to make payment in 
the manner and within the time that we require in a compromise 
settlement will result in reinstatement of our claim for the full 
amount of the overpayment less any amounts paid.

Subpart J--Determinations and the Administrative Review Process

    This subpart would set forth our rules on administrative review of 
SVB initial determinations. Again, as with our rules in subpart I on 
overpayments, these rules follow closely our rules on administrative 
review of titles II and XVI initial determinations. Regarding the 
expedited appeals process, administrative law judge hearings, Appeals 
Council review of ALJ hearings or dismissals, Court remand cases, and 
time limits for reopening a final determination we previously made, the 
proposed rules provide cross-references to the appropriate SSI rules 
while noting any exceptions in those rules that are applicable to the 
title VIII program. Specifically:
    [sbull] Section 408.1000 provides an overview of the administrative 
review process.
    [sbull] Section 408.1001 defines certain terms used in subpart J.
    [sbull] Section 408.1002 explains that initial determinations are 
the determinations we make that are subject to administrative and 
judicial review.
    [sbull] Section 408.1003 lists administrative decisions we make 
that are initial determinations.
    [sbull] Section 408.1004 lists administrative actions that are not 
initial determinations. Although we may review these actions, they are 
not subject to the administrative and judicial review process.
    [sbull] Section 408.1005 explains that we will mail you a notice 
whenever we make an initial determination in your case. The notice will 
tell you what our determination is, our reasons for making the 
determination, and your right to request a reconsideration of the 
determination.
    [sbull] Section 408.1006 explains that an initial determination is 
binding unless you request a reconsideration within the stated time 
period or we revise it.
    [sbull] Section 408.1007 explains that reconsideration is the first 
step in the administrative review process if you are dissatisfied with 
the initial determination.

[[Page 62674]]

    [sbull] Section 408.1009 explains that you must file a request for 
reconsideration within 60 days after you receive our notice of initial 
determination. This section also explains that you may ask for more 
time to request a reconsideration if you had good cause for missing the 
60-day deadline.
    [sbull] Section 408.1011 explains the standards we follow in 
determining whether you had good cause for missing the 60-day deadline 
to request a review.
    [sbull] Section 408.1013 explains that, in requesting a review of 
our initial determination, you can ask for a case review or, in cases 
involving suspension, reduction, or termination of your SVB payments, 
an informal or formal conference. If you request a case review, you 
will be given the opportunity to review the evidence in our files and 
then present oral and written evidence to us. If you are permitted to 
request an informal conference, you will also have the opportunity to 
present witnesses. If you are permitted to request a formal conference, 
you will also be given the opportunity to request us to subpoena 
adverse witnesses and relevant documents and to cross-examine adverse 
witnesses.
    [sbull] Section 408.1014 explains that, if you request a review of 
our initial determination on your application to receive SVB, you may 
elect only a case review.
    [sbull] Section 408.1015 explains that, if we notify you that we 
plan to suspend, reduce or terminate your SVB payments, you have the 
choice of a case review, an informal conference, or a formal 
conference.
    [sbull] Section 408.1016 explains the rules we follow if you 
request a formal or informal conference.
    [sbull] Section 408.1020 explains how we make a reconsidered 
determination and that the person who makes it will have no prior 
involvement with the initial determination.
    [sbull] Section 408.1021 explains that a reconsidered determination 
is binding unless you request the next stage of the administrative 
review process within the stated time.
    [sbull] Section 408.1022 explains that we will send you a notice of 
our reconsidered determination that explains the reasons for our 
determination and your further appeal rights.
    [sbull] Section 408.1030 provides a cross-reference to the SSI 
rules in Sec. Sec.  416.1423-416.1428 that explain when you may use the 
expedited appeals process (EAP). Under the EAP, you may go directly to 
a Federal District Court without first completing the administrative 
review process if the only factor preventing a determination that is 
favorable to you is a provision of the law you believe is 
unconstitutional.
    [sbull] Section 408.1040 provides a cross-reference to the SSI 
rules in Sec. Sec.  416.1429-416.1440 that describe hearings before an 
ALJ and explain when you may request an ALJ hearing. As explained in 
Sec.  416.1436, we hold ALJ hearings in the 50 States, the District of 
Columbia and the Northern Mariana Islands.
    [sbull] Section 408.1045 provides a cross-reference to the SSI 
rules in Sec. Sec.  416.1444-416.1461 that describe additional 
procedures that apply when you request a hearing before an ALJ.
    [sbull] Section 408.1050 provides a cross-reference to the SSI 
rules in Sec. Sec.  416.1467-416.1482 that describe procedures before 
the Appeals Council and explain when you may request Appeals Council 
review of an ALJ decision.
    [sbull] Section 408.1060 provides a cross-reference to the SSI 
rules in Sec. Sec.  416.1483-416.1485 that explain what happens if a 
Federal Court remands your case back to SSA for further review.
    [sbull] Section 408.1070 provides a cross-reference to the SSI 
rules in Sec. Sec.  416.1487-416.1494 that explain the circumstances 
under which we will reopen and revise a final determination we 
previously made on your request for review.

Subpart K--Representation of Parties

    As explained above, we believe that a number of the SSI provisions 
on representation of parties should also apply under the SVB program. 
Section 408.1101, therefore, explains that, for purposes of claimant 
representation under the SVB program, we would follow the rules in 
Sec. Sec.  416.1500-416.1505, 416.1507-416.1515 and 416.1540-416.1599 
of our SSI rules.

Subpart L--Federal Administration of State Recognition Payments

    This subpart would set forth our rules on Federal administration of 
a State's recognition payment program. Specifically:
    [sbull] Section 408.1201 explains what State recognition payments 
are.
    [sbull] Section 408.1205 explains that a State may enter into an 
agreement with SSA under which SSA will administer the State's 
recognition payment program by determining your eligibility for the 
payments and by making recognition payments on the State's behalf.
    [sbull] Section 408.1210 explains that a Federal-State agreement 
must, at a minimum, specify who is eligible for recognition payments; 
what fees the State must pay to SSA to administer the program; how long 
the agreement is valid; and how the agreement can be modified or 
terminated.
    [sbull] Section 408.1215 explains how you establish eligibility for 
State recognition payments. Under this section, your application for 
SVB under subpart C of this part is also an application for any 
Federally administered State recognition payments for which you may be 
eligible. We determine your eligibility for and the amount of your 
recognition payments using the rules in subparts A through K of part 
408 of our regulations.
    [sbull] Section 408.1220 explains that we pay State recognition 
payments on a monthly basis and include them with your SVB monthly 
payment.
    [sbull] Section 408.1225 explains that if you receive an 
overpayment of State recognition payments, we will adjust future 
recognition payments to which you are entitled. Under this section, the 
rules we follow on recovery (or waiver) of SVB overpayments (see 
Sec. Sec.  408.910 through 408.941) also apply to State recognition 
payments.
    [sbull] Section 408.1226 explains that, if you are underpaid, we 
will pay the underpayment directly to you.
    [sbull] Section 408.1230 explains that you can waive your right to 
State recognition payments by making a written request.
    [sbull] Section 408.1235 explains that a State must transfer to SSA 
each month the amounts of its estimated recognition payments and 
administrative fees on the established transfer date. This section also 
provides for SSA to account for the funds it receives from the State 
and permits the State to audit the payments we make under the 
agreement.

Conforming Changes on Overpayments

    As indicated above, Sec.  408.930 of these proposed rules would 
reflect the authority in section 808(a)(1)(B) of the Act to adjust your 
title II benefits to recover a title VIII overpayment. To conform to 
this change, we are also revising our title II rules at Sec.  
404.401(c) to explain that we may adjust your title II benefits to 
recover a title VIII overpayment. We are also revising Sec.  416.570 to 
indicate that we will not adjust your SSI benefits to recover an SVB 
overpayment unless you specifically request us to do so.

Clarity of These Regulations

    Executive Order 12866, as amended by Executive Order 13258, 
requires each agency to write all rules in plain language. In addition 
to your substantive comments on these proposed rules, we invite your

[[Page 62675]]

comments on how to make these proposed rules easier to understand.
    For example:
    [sbull] Have we organized the material to suit your needs?
    [sbull] Are the requirements in the rules clearly stated?
    [sbull] Do the rules contain technical language or jargon that is 
unclear?
    [sbull] Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the rules easier to understand?
    [sbull] Would more (but shorter) sections be better?
    [sbull] Could we improve clarity by adding tables, lists, or 
diagrams?
    [sbull] What else could we do to make the rules easier to 
understand?

Regulatory Procedures

Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these proposed rules do not meet the criteria for a 
significant regulatory action under Executive Order 12866, as amended 
by Executive Order 13258. Thus, they were not subject to OMB review.

Regulatory Flexibility Act

    We certify that these proposed rules will not have a significant 
impact on a substantial number of small entities since they affect only 
individuals claiming benefits under title VIII of the Act. Therefore, a 
regulatory flexibility analysis, as provided for in the Regulatory 
Flexibility Act, as amended, is not required.

Paperwork Reduction Act

    These proposed rules contain reporting requirements as shown in the 
table below. Where the public reporting burden is accounted for in 
Information Collection Requests for the various forms that the public 
uses to submit the information to SSA, a 1-hour placeholder burden is 
being assigned to the specific reporting requirement(s) contained in 
these rules.

----------------------------------------------------------------------------------------------------------------
                                                                                         Average
                                                             Number of    Frequency    burden per     Estimated
                        Section No.                         respondents  of response    response     annual hour
                                                                                         (hrs.)        burden
----------------------------------------------------------------------------------------------------------------
Sec.   408.704-.714.......................................            1            1          1             1
Sec.   408.802(b).........................................            5            1           .25          1.25
Sec.   408.814............................................            5            1           .25          1.25
Sec.   408.820(c).........................................            5            1           .25          1.25
Sec.   408.923(b).........................................            1            1          1             1
Sec.   408.931(b) and Sec.   408.932(d)...................            1            1          1             1
Sec.   408.932(c).........................................            2            1           .25           .50
Sec.   408.932(e).........................................            2            1           .25           .50
Sec.   408.941(b) and Sec.   408.942......................            2            1           .25           .50
Sec.   408.944(a).........................................            2            1           .50          1
Sec.   408.1000(a)........................................            1            1          1             1
Sec.  Sec.   408.1007; 408.1009(a)-(b)....................            1            1          1             1
Sec.   408.1009(c)........................................            1            1          1             1
Sec.   408.1210(c)-(d)....................................            1            1          2             2
Sec.   408.1215...........................................           10            1           .25          2.50
Sec.   408.1230...........................................           20            1           .25          5.00
----------------------------------------------------------------------------------------------------------------

    An Information Collection Request has been submitted to OMB for 
clearance. We are soliciting comments on the 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. Comments should be submitted to 
the Office of Management and Budget at the following fax number and to 
the Social Security Administration at the following address or fax 
number: Office of Management and Budget, Attn: Desk Officer for SSA, 
Fax: 202-395-6974. Social Security Administration, Attn: SSA Reports 
Clearance Officer, 1338 Annex Building, 6401 Security Boulevard, 
Baltimore, MD 21235-6401, Fax Number: 410-965-6400.
    Comments can be received for between 30 and 60 days after 
publication of this notice and will be most useful if received by SSA 
within 30 days of publication.

(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; 96.020, Special Benefits for Certain 
World War II Veterans)

List of Subjects

20 CFR Part 404

    Administrative practice and procedure; Death benefits; Blind, 
Disability benefits; Old-age, Survivors and disability insurance; 
Reporting and recordkeeping requirements, Social Security.

20 CFR Part 408

    Administrative practice and procedure; Aged; Reporting and 
recordkeeping requirements, Social security; Special veterans benefits; 
Veterans.

20 CFR Part 416

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

    Dated: October 24, 2003.
Jo Anne B. Barnhart,
Commissioner of Social Security.
    For the reasons set out in the preamble, we propose to amend 
Chapter III of Title 20 of the 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 amended 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), 808 and 1129A 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), 1008 and 1320a-8a).

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

[[Page 62676]]

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 titles VIII or XVI 
of the Act. For the title II rules on adjustment to your benefits, see 
subpart F of this part. For the rules on adjusting your benefits to 
recover title VIII overpayments, see Sec.  408.930 of this chapter. For 
the rules on adjusting your benefits to recover title XVI overpayments, 
see Sec.  416.572 of this chapter.
* * * * *

PART 408--SPECIAL BENEFITS FOR CERTAIN WORLD WAR II VETERANS

    3. The authority citation for subpart A continues to read as 
follows:

    Authority: Secs. 702(a)(5) and 801-813 of the Social Security 
Act (42 U.S.C. 902(a)(5) and 1001-1013).

    4. Section 408.101 is amended by adding new paragraphs (f) through 
(l) to read as follows:


Sec.  408.101  What is this subpart about?

* * * * *
    (f) Subpart F is reserved for future use.
    (g) Subpart G contains the provisions on your requirement to report 
certain events to us.
    (h) Subpart H contains the provisions on suspension and termination 
of title VIII entitlement.
    (i) Subpart I contains the provisions on underpayments and 
overpayments.
    (j) Subpart J contains the provisions on determinations and the 
administrative review process.
    (k) Subpart K contains the provisions on claimant representation.
    (l) Subpart L contains the provisions on Federal administration of 
State recognition payments.
    5. Subparts F, G, H, I, J, K, and L are added to part 408 to read 
as follows:
* * * * *
Subpart F--[Reserved]
Subpart G--Reporting Requirements
Sec.
408.701 What is this subpart about?
408.704 Who must make reports?
408.708 What events must you report to us?
408.710 What must your report include?
408.712 How should you make your report?
408.714 When are reports due?
Subpart H--Suspensions and Terminations
408.801 What is this subpart about?
408.802 When will we suspend your SVB payments?
408.803 What happens to your SVB payments if you fail to comply with 
our request for information?
408.806 What happens to your SVB payments if you are no longer 
residing outside the United States?
408.808 What happens to your SVB payments if you begin receiving 
additional benefit income?
408.809 What happens to your SVB payments if you are removed or 
deported from the United States?
408.810 What happens to your SVB payments if you are fleeing from 
the United States to avoid criminal prosecution, or custody or 
confinement after conviction, for certain crimes, or if you violate 
a condition of probation or parole?
408.812 What happens to your SVB payments if you are not a citizen 
or national of the United States and you begin residing in a country 
to which the Treasury Department restricts payments?
408.814 Can you request termination of your SVB entitlement?
408.816 When does SVB entitlement end due to death?
408.818 When does SVB entitlement end if your benefits have been in 
suspense for 12 consecutive months?
408.820 Will we send you a notice of intended action affecting your 
SVB payment status?
Subpart I--Underpayments and Overpayments

General Rules

408.900 What is this subpart about?
408.901 What is an underpayment?
408.902 What is an overpayment?
408.903 How do we determine the amount of an underpayment or 
overpayment?
408.904 How will you receive an underpayment?
408.905 Will you receive an underpayment if an overpayment already 
exists on your record?

Waiver of Recovery of SVB Overpayments

408.910 When will we waive recovery of an SVB overpayment?
408.911 What happens when we waive recovery of an SVB overpayment?
408.912 When are you without fault regarding an overpayment?
408.913 When would overpayment recovery defeat the purpose of the 
title VIII program?
408.914 When would overpayment recovery be against equity and good 
conscience?

Notices

408.918 What notices will you receive if you are overpaid or 
underpaid?

Refund of Overpayments

408.920 When will we seek refund of an SVB overpayment?

Adjustment of SVB

408.922 When will we adjust your SVB payments to recover an SVB 
overpayment?
408.923 Is there a limit on the amount we will withhold from your 
SVB payments to recover an overpayment?

Adjustment of Title II Benefits

408.930 When will we adjust your title II benefits to recover an SVB 
overpayment?
408.931 How much will we withhold from your title II benefits to 
recover an SVB overpayment?
408.932 Will you receive a notice of our intention to adjust your 
title II benefits to recover an SVB overpayment?
408.933 When will we begin adjusting your title II benefits to 
recover an SVB overpayment?

Tax Refund Offset

408.940 When will we refer an SVB overpayment to the Department of 
the Treasury for tax refund offset?
408.941 Will we notify you before we refer an SVB overpayment for 
tax refund offset?
408.942 Will you have a chance to present evidence showing that the 
overpayment is not past due or is not legally enforceable?
408.943 What happens after we make our determination on your request 
for review or your request for waiver?
408.944 How can you review our records related to an SVB 
overpayment?
408.945 When will we suspend tax refund offset?
408.946 What happens if your tax refund is insufficient to cover the 
amount of your SVB overpayment?

Compromise Settlements

408.950 Will we accept a compromise settlement of an overpayment 
debt or suspend or terminate collection of an overpayment?
Subpart J--Determinations and the Administrative Review Process

Introduction, Definitions, and Initial Determinations

408.1000 What is this subpart about?
408.1001 Definitions.
408.1002 What is an initial determination?
408.1003 Which administrative actions are initial determinations?
408.1004 Which administrative actions are not initial 
determinations?
408.1005 Will we mail you a notice of the initial determination?
408.1006 What is the effect of an initial determination?

Reconsideration

408.1007 What is reconsideration?
408.1009 How do you request reconsideration?
408.1011 How do we determine whether you had good cause for missing 
the deadline to request review?
408.1013 What are the methods for reconsideration?
408.1014 What procedures apply if you request reconsideration of an 
initial determination on your application for SVB?
408.1015 What procedures apply if you request a reconsideration of 
an initial

[[Page 62677]]

determination that results in suspension, reduction, or termination 
of your SVB?
408.1016 What happens if you request a conference?
408.1020 How do we make our reconsidered determination?
408.1021 How does the reconsidered determination affect you?
408.1022 How will we notify you of our reconsidered determination?

Expedited Appeals Process

408.1030 When can you use the expedited appeals process?

Hearing Before an Administrative Law Judge

408.1040 When you can request a hearing before an administrative law 
judge (ALJ)?

Administrative Law Judge Hearing Procedures

408.1045 What procedures apply if you request an ALJ hearing?

Appeals Council Review

408.1050 When can you request Appeals Council review of an ALJ 
hearing decision or dismissal of a hearing request?

Court Remand Cases

408.1060 What happens if a Federal court remands your case to the 
Commissioner?

Reopening and Revising Determinations and Decisions

408.1070 When will we reopen a final determination?
Subpart K--Representation of Parties
408.1101 Can you appoint someone to represent you?
Subpart L--Federal Administration of State Recognition Payments
408.1201 What are State recognition payments?
408.1205 How can a State have SSA administer its State recognition 
payment program?
408.1210 What are the essential elements of an administration 
agreement?
408.1215 How do you establish eligibility for Federally administered 
State recognition payments?
408.1220 How do we pay Federally administered State recognition 
payments?
408.1225 What happens if you receive an overpayment?
408.1226 What happens if you are underpaid?
408.1230 Can you waive State recognition payments?
408.1235 How does the State transfer funds to SSA to administer its 
recognition payment program?
* * * * *

Subpart F--[Reserved]

Subpart G--Reporting Requirements

    Authority: Secs. 702(a)(5), 802, 803, 804, 806, 807, and 810 of 
the Social Security Act (42 U.S.C. 902(a)(5), 1002, 1003, 1004, 
1006, 1007, and 1010).

Sec.  408.701  What is this subpart about?

    To achieve efficient administration of the Special Veterans Benefit 
(SVB) program, we require you (or your representative) to report 
certain events to us. It is important for us to know about these events 
because they may affect your right to receive SVB or the amount of your 
benefits. This subpart tells you what events you must report; what your 
reports must include; how you should make your report; and when reports 
are due.


Sec.  408.704  Who must make reports?

    (a) If you receive your own benefits, you are responsible for 
making required reports to us.
    (b) If you have a representative payee, and you have not been 
legally adjudged incompetent, either you or your representative payee 
must make the required reports.
    (c) If you have a representative payee and you have been legally 
adjudged incompetent, you are not responsible for making reports to us; 
however, your representative payee is responsible for making required 
reports to us.


Sec.  408.708  What events must you report to us?

    This section describes the events that you must report to us. They 
are--
    (a) A change of address or residence. You must report to us any 
change in your mailing address and any change in your residence, i.e., 
the address where you live.
    (b) A change in your other benefit income. You must report to us 
any increase or decrease in your other benefit income as described in 
Sec.  408.220.
    (c) Certain deaths. (1) If you are a representative payee, you must 
report the death of the entitled individual.
    (2) If you have a representative payee, you must report the death 
of your representative payee.
    (d) Entry into the United States. You must report to us if you 
enter the United States to visit or live even if you have no intention 
of abandoning your residence outside the United States.
    (e) Removal (including deportation) from the United States. You 
must report to us if you are removed (including deported) from the 
United States under section 237(a) or 212(a)(6)(A) of the Immigration 
and Nationality Act.
    (f) Fleeing to avoid criminal prosecution or custody or confinement 
after conviction, or violating probation or parole. You must report to 
us that you are--
    (1) Fleeing to avoid prosecution, under the laws of the United 
States or the jurisdiction within the United States from which you 
flee, for a crime, or an attempt to commit a crime, which is a felony 
under the laws of the place from which you flee (or which, in the case 
of the State of New Jersey, is a high misdemeanor under the laws of 
that State);
    (2) Fleeing to avoid custody or confinement after conviction under 
the laws of the United States or the jurisdiction within the United 
States from which you flee, for a crime, or an attempt to commit a 
crime, which is a felony under the laws of the place from which you 
flee (or which, in the case of the State of New Jersey, is a high 
misdemeanor under the laws of that State); or
    (3) Violating a condition of probation or parole imposed under 
Federal or State law.


Sec.  408.710  What must your report include?

    When you make a report, you must tell us--
    (a) The name and social security number of the person to whom the 
report applies;
    (b) The event you are reporting and the date it happened; and
    (c) Your name if you are not the person to whom the report applies.


Sec.  408.712  How should you make your report?

    You should make your report in any of the ways described in this 
section.
    (a) Written reports. You may write a report on your own paper or on 
a printed form supplied by us. You may mail a written report or bring 
it to one of our offices.
    (b) Oral reports. You may report to us by telephone, or you may 
come to one of our offices and tell one of our employees what you are 
reporting.
    (c) Other methods of reporting. You may use any other suitable 
method of reporting for example, a telegram or a cable.


Sec.  408.714  When are reports due?

    (a) A reportable event happens. You should report to us as soon as 
an event listed in Sec.  408.708 happens.
    (b) We request a report. We may request a report from you if we 
need information to determine continuing entitlement or the correct 
amount of your SVB payments. If you do not make the report within 30 
days of our written request, we may determine that you may not continue 
to receive SVB. We will suspend your benefits effective with the month 
following the month in which we determine that you are not entitled to 
receive SVB because of your failure to give us necessary information 
(see Sec.  408.803).

[[Page 62678]]

Subpart H--Suspensions and Terminations

    Authority: Secs. 702(a)(5) and 810(d) of the Social Security Act 
(42 U.S.C. 902(a)(5) and 1010(d)).


Sec.  408.801  What is this subpart about?

    This subpart explains the circumstances that will result in 
suspension of your SVB payments or termination of your SVB entitlement.

Suspension


Sec.  408.802  When will we suspend your SVB payments?

    (a) When suspension is proper. Suspension of SVB payments is 
required when you no longer meet the SVB qualification requirements 
(see subpart B of this part) and termination in accordance with 
Sec. Sec.  408.814 through 408.818 does not apply. (This subpart does 
not cover suspension of payments for administrative reasons, as, for 
example, when mail is returned as undeliverable by the Postal Service 
and we do not have a valid mailing address for you or when your 
representative payee dies and a search is underway for a substitute 
representative payee.)
    (b) Effect of suspension. When we correctly suspend your SVB 
payments, we will not resume them until you again meet all 
qualification requirements except the filing of a new application. If 
you request reinstatement, you are required to submit the evidence 
necessary to establish that you again meet all requirements for 
eligibility under this part. Your SVB payments will be reinstated 
effective with the first month in which you meet all requirements for 
eligibility except the filing of a new application.


Sec.  408.803  What happens to your SVB payments if you fail to comply 
with our request for information?

    (a) Effective date of suspension. We will suspend your SVB payments 
effective with the month following the month in which we determine in 
accordance with Sec.  408.714(b) that you may no longer receive SVB 
payments because you failed to comply with our request for necessary 
information.
    (b) Resumption of payments. When we have information to establish 
that SVB is again payable, your benefit payments will be reinstated for 
any previous month for which you continue to meet the requirements of 
Sec.  408.202.
    (c) When we will not suspend your payments. We will not suspend 
your payments for failing to comply with our request for information 
for any month we can determine your eligibility for or the amount of 
your payment based on information on record. If we cannot determine 
your eligibility or the amount of your payment based on the information 
on record, we will send you a notice of suspension of payment because 
you failed to comply with our request for information in accordance 
with Sec. Sec.  408.820 and 408.1005.


Sec.  408.806  What happens to your SVB payments if you are no longer 
residing outside the United States?

    (a) Suspension effective date. We will suspend your SVB payments 
effective the first full calendar month you are no longer residing 
outside the United States.
    (b) Resumption of payments. If otherwise payable, we will resume 
your SVB payments effective with the first full calendar month you are 
again residing outside the United States.


Sec.  408.808  What happens to your SVB payments if you begin receiving 
additional benefit income?

    (a) Suspension effective date. We will suspend your SVB payments 
for any month your other benefit income (as described in Sec.  
408.220(a)) exceeds the maximum SVB amount payable for a month (see 
Sec.  408.505(a)).
    (b) Resumption of payments. If otherwise payable, we will resume 
your SVB payments effective with the first month your other benefit 
income is less than the maximum SVB amount payable for a month.


Sec.  408.809  What happens to your SVB payments if you are removed 
(including deported) from the United States?

    (a) Suspension effective date. We will suspend your SVB payments 
effective with the month after the month in which we receive notice 
from the Immigration and Naturalization Service that you have been 
removed (including deported) from the United States under section 
237(a) or 212(a)(6)(A) of the Immigration and Nationality Act.
    (b) Resumption of payments. If otherwise payable, we will resume 
your SVB effective with the first month after the month of your removal 
that you were granted the status of a lawful permanent resident of the 
United States.


Sec.  408.810  What happens to your SVB payments if you are fleeing to 
avoid criminal prosecution or custody or confinement after conviction, 
or because you violate a condition of probation or parole?

    (a) Basis for suspension. You may not receive SVB for any month 
during which you are--
    (1) Fleeing to avoid prosecution under the laws of the United 
States or the jurisdiction within the United States from which you flee 
for a crime, or attempt to commit a crime, that is a felony under the 
laws of the place from which you flee (or that, in the case of the 
State of New Jersey, is a high misdemeanor under the laws of that 
State); or
    (2) Fleeing to avoid custody or confinement after conviction under 
the laws of the United States or the jurisdiction within the United 
States from which you flee, for a crime, or an attempt to commit a 
crime, that is a felony under the laws of the place from which you flee 
(or that, in the case of the State of New Jersey, is a high misdemeanor 
under the laws of that State); or
    (3) Violating a condition of probation or parole imposed under 
Federal or State law.
    (b) Suspension effective date. Suspension of SVB payments because 
you are a fugitive as described in paragraph (a)(1) or (a)(2) of this 
section or a probation or parole violator as described in paragraph 
(a)(3) of this section is effective with the first day of whichever of 
the following months is earlier--
    (1) The month in which a warrant or order for your arrest or 
apprehension, an order requiring your appearance before a court or 
other appropriate tribunal (e.g., a parole board), or similar order is 
issued by a court or other duly authorized tribunal in the United 
States on the basis of an appropriate finding that you--
    (i) Are fleeing, or have fled, to avoid prosecution as described in 
paragraph (a)(1) of this section;
    (ii) Are fleeing, or have fled, to avoid custody or confinement 
after conviction as described in paragraph (a)(2) of this section;
    (iii) Are violating, or have violated, a condition of your 
probation or parole as described in paragraph (a)(3) of this section; 
or
    (2) The first month during which you fled to avoid such 
prosecution, fled to avoid such custody or confinement after 
conviction, or violated a condition of your probation or parole, if 
indicated in such warrant or order, or in a decision by a court or 
other appropriate tribunal in the United States.
    (c) Resumption of payments. If otherwise payable, we will resume 
your SVB payments beginning with the first month throughout which you 
are determined to be no longer fleeing to avoid prosecution, fleeing to 
avoid custody or confinement after conviction, or violating a condition 
of your probation or parole.

[[Page 62679]]

Sec.  408.812  What happens to your SVB payments if you are not a 
citizen or national of the United States and you begin residing in a 
Treasury-restricted country?

    (a) Suspension effective date. If you are not a citizen or national 
of the United States, we will suspend your SVB payments effective with 
the first full calendar month you are residing in a country to which 
the Treasury Department restricts payments under 31 U.S.C. 3329.
    (b) Resumption of payments. If benefits are otherwise payable, they 
will be resumed effective with the first day of the first month in 
which you are not residing in a Treasury-restricted country.

Termination


Sec.  408.814  Can you request termination of your SVB entitlement?

    You, your legal guardian, or your representative payee may 
voluntarily terminate your SVB entitlement by filing a written request 
for termination. If your representative payee requests termination, it 
must be shown that no hardship would result to you if the request is 
processed. When a termination request is filed, your SVB entitlement 
ends effective with the month following the month you file your request 
with us unless you specify some other month. However, we will not 
terminate your entitlement for any month for which payment has been or 
will be made unless you repay (or there is an assurance you will repay) 
any amounts paid for those months. When we process a voluntary request 
for termination of your SVB entitlement, we will send you a notice of 
our determination in accordance with Sec.  408.1005. Once terminated, 
your entitlement can be reestablished only if you file a new 
application, except as provided by Sec.  408.1009.


Sec.  408.816  When does SVB entitlement end due to death?

    Your SVB entitlement ends with the month in which you die. Payments 
are terminated effective with the month after the month of death.


Sec.  408.818  When does SVB entitlement terminate if your benefit 
payments have been in suspense for 12 consecutive months?

    We will terminate your SVB entitlement following 12 consecutive 
months of benefit suspension for any reason beginning with the first 
month you were no longer entitled to SVB. We will count the 12-month 
suspension period from the start of the first month that you are no 
longer entitled to SVB (see Sec.  408.802(a)). This termination is 
effective with the first day of the 13th month after the suspension 
began.


Sec.  408.820  Will we send you a notice of intended action affecting 
your SVB payment status?

    (a) Advance written notice requirement. Before we suspend, reduce 
(see subpart E of this part), or terminate your SVB payments, we will 
send you a written notice explaining our intention to do so, except 
where we have factual information confirming your death, e.g., as 
specified in Sec.  404.704(b) of this chapter, or a report by a 
surviving spouse, a legal guardian, a parent or other close relative, 
or a landlord.
    (b) Continuation of payment pending an appeal. The written notice 
of our intent to suspend, reduce, or terminate payments will give you 
60 days after the date you receive the notice to request the 
appropriate appellate review. If your benefit payments are reduced or 
suspended and you file an appeal within 10 days after you receive the 
notice, payments will be continued or reinstated at the previously 
established payment level (subject to the effects of intervening events 
on the payment which are not appealed within 10 days of receipt of a 
required advance notice or which do not require advance notice, e.g., 
an increase in the benefit amount) until a decision on your initial 
appeal is issued, unless you specifically waive in writing your right 
to continuation of payment at the previously established level in 
accordance with paragraph (c) of this section. Where the request for 
the appropriate appellate review is filed more than 10 days after the 
notice is received but within the 60-day period specified in Sec.  
408.1009 of this part, you have no right to continuation or 
reinstatement of payment at the previously established level unless you 
establish good cause under the criteria specified in Sec.  408.1011 of 
this part for failure to appeal within 10 days after receipt of the 
notice. For purposes of this paragraph, we will presume you received 
our notice of intent to suspend, reduce, or terminate payments 5 days 
after the date on the face of the notice, unless there is a reasonable 
showing to the contrary.
    (c) Waiver of right to continued payment. In order to avoid the 
possibility of an overpayment of benefits, you may waive continuation 
of payment at the previously established level (subject to intervening 
events which would have increased the benefit for the month in which 
the incorrect payment was made, in which case the higher amount shall 
be paid), after you receive a full explanation of your rights. Your 
request for waiver of continuation of payment must be in writing, state 
that waiver action is being initiated solely at your request, and state 
that you understand your right to receive continued payment at the 
previously established level.

Subpart I--Underpayments and Overpayments

    Authority: Secs. 702(a)(5) and 808 of the Social Security Act 
(42 U.S.C. 902(a)(5) and 1008).

General Rules


Sec.  408.900  What is this subpart about?

    This subpart explains what happens when you receive less or more 
than the correct amount of SVB than you are entitled to receive. 
Sections 408.901 through 408.903 define overpayment and underpayment 
and describe how we determine the amount of the overpayment or 
underpayment. When you receive less than the correct amount of SVB 
(which we refer to as an underpayment), we will take the actions 
described in Sec. Sec.  408.904 and 408.905. Waiver of recovery of 
overpayments (payments of more than the correct amount) is discussed in 
Sec. Sec.  408.910 through 408.914, and the methods we use to recover 
overpayments are discussed in Sec. Sec.  408.920 through 408.946. In 
Sec.  408.950, we explain when we will accept a compromise settlement 
of an overpayment or suspend or terminate collection of an overpayment.


Sec.  408.901  What is an underpayment?

    (a) An underpayment can occur only with respect to a period for 
which you filed an application for benefits and met all conditions of 
eligibility for benefits.
    (b) An underpayment is:
    (1) Nonpayment, where payment was due but was not made; or
    (2) Payment of less than the amount due for a period. For purposes 
of this section, payment has been made when certified by the Social 
Security Administration to the Department of the Treasury. Payment is 
not considered to have been made where payment has not been received by 
the designated payee, or where payment was returned.
    (c) For purposes of this section, payment has been made when 
certified by the Social Security Administration to the Department of 
the Treasury. Payment is not considered to have been made where payment 
has not been received by the designated payee, or where payment was 
returned.


Sec.  408.902  What is an overpayment?

    As used in this subpart, the term overpayment means payment of more

[[Page 62680]]

than the amount due for any period. For purposes of this section, 
payment has been made when certified by the Social Security 
Administration to the Department of the Treasury. Payment is not 
considered to have been made where payment has not been received by the 
designated payee, or where payment was returned.


Sec.  408.903  How do we determine the amount of an underpayment or 
overpayment?

    (a) General. The amount of an underpayment or overpayment is the 
difference between the amount you are paid and the amount you are due 
for a given period. An underpayment or overpayment period begins with 
the first month for which there is a difference between the amount paid 
and the amount actually due for that month. The period ends with the 
month in which we make the initial determination of the overpayment or 
underpayment. With respect to the period established, there can be no 
underpayment to you if we paid you more than the correct amount of SVB, 
even though we waived recovery of any overpayment to you for that 
period under the provisions of Sec. Sec.  408.910 through 408.914. A 
later initial determination of an overpayment will require no change 
with respect to a prior determination of overpayment or to the period 
relating to such prior determination to the extent that the basis of 
the prior overpayment remains the same.
    (b) Limited delay in payment of an underpayment. Where we have 
detected a potential overpayment but we have not made a determination 
of the overpayment (see Sec.  408.918(a)), we will not delay making a 
determination of underpayment and paying you unless we can make an 
overpayment determination before the close of the month following the 
month in which we discovered the potential underpayment.
    (c) Delay in payment of underpayment to ineligible individual. If 
you are no longer entitled to SVB, we will delay a determination and 
payment of an underpayment that is otherwise due you so that we can 
resolve all overpayments, incorrect payments, and adjustments.


Sec.  408.904  How will you receive an underpayment?

    We will pay you the amount of any underpayment due you in a 
separate payment or by increasing the amount of your monthly payment. 
If you die before we pay you all or any part of an underpayment, the 
balance of the underpayment reverts to the general fund of the U.S. 
Treasury.


Sec.  408.905  Will we withhold or adjust an underpayment to reduce an 
overpayment if that overpayment occurred in a different period?

    We will withhold or adjust any underpayment due you to reduce any 
overpayment to you that we determine for a different period, unless we 
have waived recovery of the overpayment under the provisions of 
Sec. Sec.  408.910 through 408.914.

Waiver of Recovery of SVB Overpayments


Sec.  408.910  When will we waive recovery of an SVB overpayment?

    We will waive recovery of an overpayment when:
    (a) You are without fault in connection with the overpayment, and
    (b) Recovery of such overpayment would either:
    (1) Defeat the purpose of the title VIII program, or
    (2) Be against equity and good conscience.


Sec.  408.911  What happens when we waive recovery of an SVB 
overpayment?

    Waiver of recovery of an overpayment from you (or, after your 
death, from your estate) frees you and your estate from the obligation 
to repay the amount of the overpayment covered by the waiver. Example: 
You filed for waiver of recovery of a $600 overpayment. We found that 
you are eligible for waiver of recovery of $260 of that amount. Only 
$340 of the overpayment would be recoverable from you or your estate.


Sec.  408.912  When are you without fault regarding an overpayment?

    (a) General-when fault is relevant. If you request waiver of 
recovery of an overpayment, we must determine whether you were without 
fault. You are not relieved of liability and are not without fault 
solely because we may have been at fault in making the overpayment.
    (b) The factors we consider to determine whether you were without 
fault. When we determine whether you were without fault, we consider 
all the pertinent circumstances relating to the overpayment. We 
consider your understanding of your obligation to give us information 
affecting your payments, your agreement to report events, your 
knowledge of the occurrence of events that should have been reported, 
the efforts you made to comply with the reporting requirements, the 
opportunities you had to comply with the reporting requirements, your 
ability to comply with the reporting requirements (e.g., your age, 
comprehension, memory, physical and mental condition), and your 
understanding of the obligation to return payments that were not due. 
In determining whether you are without fault based on these factors, we 
will take into account any physical, mental, educational, or language 
limitations (including any lack of facility with the English language) 
you may have. We will determine that you were at fault if, after 
considering all of the circumstances, we find that the overpayment 
resulted from one of the following:
    (1) Your failure to furnish information which you knew or should 
have known was material;
    (2) An incorrect statement you made which you knew or should have 
known was incorrect (this includes furnishing your opinion or 
conclusion when you were asked for facts), or
    (3) You did not return a payment, which you knew, or could have 
been expected to know, was incorrect.


Sec.  408.913  When would overpayment recovery defeat the purpose of 
the title VIII program?

    We will waive recovery of an overpayment when you are without fault 
(as defined in Sec.  408.912) and recovery of the overpayment would 
defeat the purpose of the title VIII program. Recovery of an 
overpayment would defeat the purpose of the title VIII program to the 
extent that our recovery action would deprive you of income and 
resources you need to meet your ordinary and necessary living expenses 
as described in Sec.  404.508(a) of this chapter.


Sec.  408.914  When would overpayment recovery be against equity and 
good conscience?

    We will waive recovery of an overpayment when you are without fault 
(as defined in Sec.  408.912) and recovery would be against equity and 
good conscience. Recovery would be against equity and good conscience 
if you changed your position for the worse or gave up a valuable right 
in reliance on our notice that payment would be made or because of the 
incorrect payment itself.
    Example: Upon our notice that you are eligible for SVB payments, 
you signed a lease on an apartment renting for $15 a month more than 
the one you previously occupied. You were subsequently found ineligible 
for SVB and no benefits are payable. In this case, recovery of the 
overpayment would be considered ``against equity and good conscience.''

[[Page 62681]]

Notices


Sec.  408.918  What notices will you receive if you are overpaid or 
underpaid?

    (a) Notice of overpayment or underpayment determination. Whenever 
we determine that you were overpaid or underpaid for a given period, as 
defined in Sec.  408.903, we will send you a written notice of the 
correct and incorrect amounts you received for each month in the 
period, even if part or all of the underpayment must be withheld in 
accordance with Sec.  408.905. The notice of overpayment will advise 
you about recovery of the overpayment, as explained in Sec. Sec.  
408.920-408.923, and your rights to appeal the determination and to 
request waiver of recovery of the overpayment under the provisions of 
Sec.  408.910.
    (b) Notice of waiver determination. Written notice of an initial 
determination regarding waiver of recovery will be mailed to you in 
accordance with Sec.  408.1005 unless you were not given notice of the 
overpayment in accordance with paragraph (a) of this section.

Refund of Overpayments


Sec.  408.920  When will we seek refund of an SVB overpayment?

    We will seek refund of an SVB overpayment in every case in which we 
have not waived recovery. An overpayment may be refunded by you or by 
anyone on your behalf. If you are receiving SVB currently and you have 
not refunded the overpayment, adjustment as set forth in Sec.  408.922 
will be proposed. If you die before we recover the full overpayment, we 
will seek refund of the balance from your estate.

Adjustment of SVB


Sec.  408.922  When will we adjust your SVB payments to recover an 
overpayment?

    If you do not refund your overpayment to us, and waiver of recovery 
is not applicable, we will adjust any SVB payments due you to recover 
the overpayment. Adjustment will generally be accomplished by 
withholding each month the amount set forth in Sec.  408.923 from the 
benefit payable to you.


Sec.  408.923  Is there a limit on the amount we will withhold from 
your SVB payments to recover an overpayment?

    (a) Amount of the withholding limit. Except as provided in 
paragraphs (b) and (c) of this section, the amount we will withhold 
from your monthly SVB payment to recover an overpayment is limited to 
the lesser of (1) the amount of your Federal SVB payment or
    (2) an amount equal to 10 percent of the maximum SVB monthly 
payment amount as defined in Sec.  408.505(a).
    (b) Your right to request a different rate of withholding. When we 
notify you of the rate we propose to withhold from your monthly SVB 
payment, we will give you the opportunity to request a higher or lower 
rate of withholding than that proposed. If you request a rate of 
withholding that is lower than the one established under paragraph (a) 
of this section, we will set a rate that is appropriate to your 
financial condition after we evaluate all the pertinent facts. An 
appropriate rate is one that will not deprive you of income required 
for ordinary and necessary living expenses. We will evaluate your 
income, resources, and expenses as described in Sec.  404.508 of this 
chapter.
    (c) Fraud, misrepresentation or concealment of material 
information. If we determine that there was fraud, willful 
misrepresentation, or concealment of material information by you in 
connection with the overpayment, the limits in paragraph (a)(2) of this 
section do not apply and we will not lower the rate of withholding 
under paragraph (b) of this section. Concealment of material 
information means an intentional, knowing, and purposeful delay in 
making or in failing to make a report that will affect your SVB payment 
amount and/or eligibility. It does not include a mere omission on your 
part; it is an affirmative act to conceal.

Adjustment of Title II Benefits


Sec.  408.930  When will we adjust your title II benefits to recover an 
SVB overpayment?

    (a) General rule. Except as provided in paragraph (c) of this 
section, we will adjust your title II benefits payable in a month to 
recover the SVB overpayment if you are not currently eligible to 
receive SVB payments and you are receiving title II benefits.
    (b) Benefits payable in a month. For purposes of this section, 
benefits payable in a month means the actual amount of title II 
benefits you 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.
    (c) When we will not adjust your title II benefits. We will not 
adjust your title II benefits to recover an SVB overpayment if:
    (1) You are refunding your SVB overpayment by regular monthly 
installments, or
    (2) We are recovering a title II overpayment by adjusting your 
title II benefits.
    (3) We are recovering a title XVI overpayment by adjusting your 
title II benefits under Sec.  416.572 of this chapter.


Sec.  408.931  How much will we withhold from your title II benefits to 
recover an SVB overpayment?

    (a) Amount of withholding. Except as provided in paragraphs (b) and 
(c) of this section, any recovery of an SVB overpayment from title II 
benefits in any month is limited to 10 percent of the title II benefit 
payable to you in that month.
    (b) Your right to request a different rate of withholding. When we 
notify you of the proposed rate of withholding, we will give you the 
opportunity to request a higher or lower rate of withholding than that 
proposed. If you request a lower rate of withholding, we will set a 
rate in accordance with the rules in Sec.  408.923(b).
    (c) When we will withhold the full amount of your title II 
benefits. We will withhold the full amount of title II benefits payable 
to you in a month if you willfully misrepresented or concealed material 
information in connection with the overpayment as described in Sec.  
408.923(c).


Sec.  408.932  Will you receive a notice of our intention to adjust 
your title II benefits to recover an SVB overpayment?

    Before we collect an SVB overpayment by adjusting your title II 
benefits, we will send you a written notice that tells you the 
following information:
    (a) We have determined that you owe a specific overpayment balance 
that can be collected by adjusting your title II benefits;
    (b) We will withhold the amount described in Sec.  408.931;
    (c) You may ask us to review this determination that you still owe 
this overpayment balance;
    (d) You may request that we withhold a different amount (this 
notice will not include this paragraph when Sec.  408.931(c) applies); 
and
    (e) You may ask us to waive collection of this overpayment balance.


Sec.  408.933  When will we begin adjusting your title II benefits to 
recover an SVB overpayment?

    We will begin adjusting your title II benefits no sooner than 30 
calendar days after the date of the notice described in Sec.  408.932.
    (a) If within that 30-day period you pay us the full overpayment 
balance stated in the notice, we will not begin adjusting your title II 
benefits.
    (b) If within that 30-day period you ask us to review our 
determination that you still owe us this overpayment

[[Page 62682]]

balance, we will not begin adjusting your title II benefits before we 
review the matter and notify you of our decision in writing.
    (c) 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 
adjusting your title II benefits until we determine the amount we will 
withhold. This paragraph does not apply when Sec.  408.931(c) applies.
    (d) If within that 30-day period you ask us to waive recovery of 
the overpayment balance, we will not begin adjusting your title II 
benefits before we review the matter and notify you of our decision in 
writing. See Sec. Sec.  408.910-408.914.

Tax Refund Offset


Sec.  408.940  When will we refer an SVB overpayment to the Department 
of the Treasury for tax refund offset?

    (a) General. The standards we will apply and the procedures we will 
follow before requesting the Department of the Treasury to offset 
income tax refunds due taxpayers who have an outstanding overpayment 
are set forth in Sec. Sec.  408.940 through 408.946 of this subpart. 
These standards and procedures are authorized by 31 U.S.C. 3720A, as 
implemented through Department of the Treasury regulations at 31 CFR 
285.2.
    (b) We will use the Department of the Treasury tax refund offset 
procedure to collect overpayments that are certain in amount, past due 
and legally enforceable and eligible for tax refund offset under 
regulations issued by the Secretary of the Treasury. We will use these 
procedures to collect overpayments from you only when you are not 
currently entitled to monthly SVB under title VIII of the Act. We will 
refer an overpayment to the Secretary of the Treasury for offset 
against tax refunds no later than 10 years after our right to collect 
the overpayment first accrued.


Sec.  408.941  Will we notify you before we refer an SVB overpayment 
for tax refund offset?

    We will make a request for collection by reduction of Federal 
income tax refunds only after we determine that you owe an overpayment 
that is past due and provide you with 60-calendar days written notice. 
Our notice of intent to collect an overpayment through Federal income 
tax refund offset will state:
    (a) The amount of the overpayment;
    (b) That unless, within 60 calendar days from the date of our 
notice, you repay the overpayment, send evidence to us at the address 
given in our notice that the overpayment is not past due or not legally 
enforceable, or ask us to waive collection of the overpayment under 
Sec.  408.910, we intend to seek collection of the overpayment by 
requesting that the Department of the Treasury reduce any amounts 
payable to you as refunds of Federal income taxes by an amount equal to 
the amount of the overpayment;
    (c) The conditions under which we will waive recovery of an 
overpayment under section 808(c) of the Act;
    (d) That we will review any evidence presented that the overpayment 
is not past due or not legally enforceable;
    (e) That you have the right to inspect and copy our records related 
to the overpayment as determined by us and you will be informed as to 
where and when the inspection and copying can be done after we receive 
notice from you requesting inspection and copying.


Sec.  408.942  Will you have a chance to present evidence showing that 
the overpayment is not past due or is not legally enforceable?

    (a) Notification. If you receive a notice as described in Sec.  
408.941 of this subpart, you have the right to present evidence that 
all or part of the overpayment is not past due or not legally 
enforceable. To exercise this right, you must notify us and present 
evidence regarding the overpayment within 60 calendar days from the 
date of our notice.
    (b) Submission of evidence. You may submit evidence showing that 
all or part of the debt is not past due or not legally enforceable as 
provided in paragraph (a) of this section. Failure to submit the 
notification and evidence within 60 calendar days will result in 
referral of the overpayment to the Department of the Treasury, unless, 
within this 60-day time period, you ask us to waive collection of the 
overpayment under Sec.  408.910 and we have not yet determined whether 
we can grant the waiver request. If you ask us to waive collection of 
the overpayment, we may ask you to submit evidence to support your 
request.
    (c) Review of the evidence. If you submit evidence on a timely 
basis, we will consider all available evidence related to the 
overpayment. We will make findings based on a review of the written 
record, unless we determine that the question of indebtedness cannot be 
resolved by a review of the documentary evidence.
    (d) Written findings. We will issue our written findings including 
supporting rationale to you, your attorney or other representative. The 
findings will be the final Agency action with respect to the past-due 
status and enforceability of the overpayment.


Sec.  408.943  What happens after we make our determination on your 
request for review or your request for waiver?

    (a) If we make a determination that all or part of the overpayment 
is past due and legally enforceable and/or your waiver request cannot 
be granted, we will refer the overpayment to the Department of the 
Treasury for recovery from any Federal income tax refund due you. We 
will not suspend our referral of the overpayment to the Department of 
the Treasury under Sec.  408.945 of this subpart pending any further 
administrative review of the waiver determination that you may seek.
    (b) We will not refer the overpayment to the Department of the 
Treasury if we reverse our prior finding that the overpayment is past 
due and legally enforceable or, upon consideration of a waiver request, 
we determine that waiver of recovery of the overpayment is appropriate.


Sec.  408.944  How can you review our records related to an SVB 
overpayment?

    (a) What you must do. If you intend to inspect or copy our records 
related to the overpayment, you must notify us stating your intention 
to inspect or copy.
    (b) What we will do. If you notify us that you intend to inspect or 
copy our records related to the overpayment as described in paragraph 
(a) of this section, we will notify you of the location and time when 
you may do so. We may also, at our discretion, mail copies of the 
overpayment-related records to you.


Sec.  408.945  When will we suspend tax refund offset?

    If, within 60 days of the date of the notice described in Sec.  
408.941 of this subpart, you notify us that you are exercising a right 
described in Sec.  408.942(a) of this subpart and submit evidence 
pursuant to Sec.  408.942(b) of this subpart or request a waiver under 
Sec.  408.910 of this subpart, we will suspend any notice to the 
Department of the Treasury until we have issued written findings that 
affirm that an overpayment is past due and legally enforceable and, if 
applicable, make a determination that a waiver request cannot be 
granted.


Sec.  408.946  What happens if your tax refund is insufficient to cover 
the amount of your SVB overpayment?

    If your tax refund is insufficient to recover an overpayment in a 
given year, the case will remain with the Department of the Treasury 
for succeeding years, assuming that all criteria for certification are 
met at that time.

[[Page 62683]]

Compromise Settlements


Sec.  408.950  Will we accept a compromise settlement of an overpayment 
debt or suspend or terminate collection of an overpayment? 
[FEDREG][VOL]*[/VOL][NO]*[/NO][DATE]*[/
DATE][PRORULES][PRORULE][PREAMB][AGENCY]*[/AGENCY][SUBJECT]*[/
SUBJECT][/PREAMB][SUPLINF][HED]*[/HED]

    (a) General. If we find that you do not, or your estate does not, 
have the present or future ability to pay the full amount of the 
overpayment within a reasonable time or the cost of collection is 
likely to exceed the amount of recovery, we may take any of the 
following actions, as appropriate.
    (1) We may accept a compromise settlement (payment of less than the 
full amount of the overpayment) to discharge the entire overpayment 
debt.
    (2) We may suspend our efforts to collect the overpayment.
    (3) We may terminate our efforts to collect the overpayment.
    (b) Rules we apply. In deciding whether to take any of the actions 
described in paragraph (a) of this section, we will apply the rules in 
Sec.  404.515(b), (c), (d), (e), and (f) of this chapter and other 
applicable rules, including the Federal Claims Collection Standards (31 
CFR parts 902 and 903).
    (c) Effect of compromise, suspension or termination. When we 
suspend or terminate collection of the overpayment debt, we may take 
collection action in the future in accordance with provisions of the 
Social Security Act, other laws, and the standards set forth in 31 CFR 
chapter IX. A compromise settlement satisfies the obligation to repay 
the overpayment if you or your estate comply with the terms of the 
settlement. Failure to make payment in the manner and within the time 
that we require in the settlement will result in reinstatement of our 
claim for the full amount of the overpayment less any amounts paid.

Subpart J--Determinations and the Administrative Review Process

    Authority: Secs. 702(a)(5) and 809 of the Social Security Act 
(42 U.S.C. 902(a)(5) and 1009).

Introduction, Definitions, and Initial Determinations


Sec.  408.1000  What is this subpart about?

    (a) Explanation of the administrative review process. This subpart 
explains the procedures we follow in determining your appeal rights 
under title VIII of the Social Security Act. The regulations describe 
the process of administrative review and explain your right to judicial 
review after you have taken all the necessary administrative steps. The 
administrative review process consists of several steps, which usually 
must be requested within certain time periods and in the following 
order:
    (1) Initial determination. This is a determination we make about 
whether you qualify for and can become entitled to SVB or whether your 
SVB entitlement can continue. It can also be about any other matter, as 
discussed in Sec.  408.1003, that gives you a right to further review.
    (2) Reconsideration. If you are dissatisfied with an initial 
determination, you may ask us to reconsider it.
    (3) Hearing before an administrative law judge. If you are 
dissatisfied with the reconsideration determination, you may request a 
hearing before an administrative law judge.
    (4) Appeals Council review. If you are dissatisfied with the 
decision of the administrative law judge, you may request that the 
Appeals Council review the decision.
    (5) Federal court review. When you have completed the steps of the 
administrative review process listed in paragraphs (a)(1) through 
(a)(4) of this section, we will have made our final decision. If you 
are dissatisfied with our final decision, you may request judicial 
review by filing an action in a Federal district court.
    (6) Expedited appeals process. At some time after your initial 
determination has been reviewed, if you have no dispute with our 
findings of fact and our application and interpretation of the 
controlling laws, but you believe that a part of the law is 
unconstitutional, you may use the expedited appeals process. This 
process permits you to go directly to a Federal district court so that 
the constitutional issue may be resolved.
    (b) Nature of the administrative review process. In making a 
determination or decision in your case, we conduct the administrative 
review process in an informal, nonadversary manner. In each step of the 
review process, you may present any information you feel is helpful to 
your case. Subject to the limitations on Appeals Council consideration 
of additional evidence, we will consider at each step of the review 
process any information you present as well as all the information in 
our records. You may present the information yourself or have someone 
represent you, including an attorney. If you are dissatisfied with our 
decision in the review process, but do not take the next step within 
the stated time period, you will lose your right to further 
administrative review and your right to judicial review, unless you can 
show us that there was good cause for your failure to make a timely 
request for review.


Sec.  408.1001  Definitions.

    As used in this subpart:
    Date you receive notice means 5 days after the date on the notice, 
unless you show us that you did not receive it within the 5-day period.
    Decision means the decision made by an administrative law judge or 
the Appeals Council.
    Determination means the initial determination or the reconsidered 
determination.
    Mass change means a State-initiated change in the level(s) of 
federally administered State recognition payments applicable to all 
recipients of such payments due, for example, to State legislative or 
executive action.
    Remand means to return a case for further review.
    SVB, for purposes of this subpart, includes qualification for SVB, 
entitlement to SVB and payments of SVB.
    Vacate means to set aside a previous action.
    Waive means to give up a right knowingly and voluntarily.
    We, us, or our refers to the Social Security Administration.
    You or your refers to any person claiming or receiving SVB.


Sec.  408.1002  What is an initial determination?

    Initial determinations are the determinations we make that are 
subject to administrative and judicial review. The initial 
determination will state the important facts and give the reasons for 
our conclusions.


Sec.  408.1003  Which administrative actions are initial 
determinations?

    Initial determinations regarding SVB include, but are not limited 
to, determinations about--
    (a) Whether you qualify for SVB;
    (b) Whether you are entitled to receive SVB payments on the basis 
of your residence outside the United States;
    (c) The amount of your SVB payments;
    (d) Suspension or reduction of your SVB payments;
    (e) Termination of your SVB entitlement;
    (f) Whether an overpayment of benefits must be repaid to us;
    (e) Whether payments will be made, on your behalf, to a 
representative payee, unless you are legally incompetent;
    (f) Who will act as your payee if we determine that representative 
payment will be made;

[[Page 62684]]

    (g) A claim for benefits under Sec.  408.351 based on alleged 
misinformation; and
    (h) Our calculation of the amount of change in your federally 
administered State recognition payment amount (i.e., a reduction, 
suspension, or termination) which results from a mass change as defined 
in Sec.  408.1001.


Sec.  408.1004  Which administrative actions are not initial 
determinations?

    Administrative actions that are not initial determinations may be 
reviewed by us, but they are not subject to the administrative review 
process provided by this subpart and they are not subject to judicial 
review. These actions include, but are not limited to, an action 
about--
    (a) Denial of a request to be made your representative payee;
    (b) Denial of your request to use the expedited appeals process;
    (c) Denial of your request to reopen a determination or a decision;
    (d) Disqualifying or suspending a person from acting as your 
representative in a proceeding before us;
    (e) Denial of your request to extend the time period for requesting 
review of a determination or a decision;
    (f) Denial of your request to readjudicate your claim and apply an 
Acquiescence Ruling;
    (g) Declining under Sec.  408.351(f) to make a determination on a 
claim for benefits based on alleged misinformation because one or more 
of the conditions specified in Sec.  408.351(f) are not met;
    (h) Findings on whether we can collect an overpayment by using the 
Federal income tax refund offset procedure. (See Sec.  408.943).
    (i) The determination to reduce, suspend, or terminate your 
federally administered State recognition payments due to a State-
initiated mass change, as defined in Sec.  408.1001, in the levels of 
such payments, except as provided in Sec.  408.1003(h).


Sec.  408.1005  Will we mail you a notice of the initial determination?

    (a) We will mail a written notice of the initial determination to 
you at your last known address. Generally, we will not send a notice if 
your benefits are stopped because of your death, or if the initial 
determination is a redetermination that your eligibility for benefits 
and the amount of your benefits have not changed.
    (b) The notice that we send will tell you--
    (1) What our initial determination is;
    (2) The reasons for our determination; and
    (3) What rights you have to a reconsideration of the determination.
    (c) If our initial determination is that we must suspend, reduce 
your SVB payments or terminate your SVB entitlement, the notice will 
also tell you that you have a right to a reconsideration before the 
determination takes effect (see Sec.  408.820).


Sec.  408.1006  What is the effect of an initial determination?

    An initial determination is binding unless you request a 
reconsideration within the stated time period, or we revise the initial 
determination.

Reconsideration


Sec.  408.1007  What is reconsideration?

    Reconsideration is the first step in the administrative review 
process that we provide if you are dissatisfied with the initial 
determination. If you are dissatisfied with our reconsideration 
determination, you may request a hearing before an administrative law 
judge.


Sec.  408.1009  How do you request reconsideration?

    (a) When you must file your request. We will reconsider an initial 
determination if you file a written request within 60 days after the 
date you receive notice of the initial determination (or within the 
extended time period if we extend the time as provided in paragraph (c) 
of this section).
    (b) Where to file your request. You can file your request for 
reconsideration at:
    (1) Any of our offices;
    (2) The Veterans Affairs Regional Office in the Philippines;
    (3) An office of the Railroad Retirement Board if you have 10 or 
more years of service in the railroad industry; or
    (4) A competent authority or agency of a country with which the 
United States has a totalization agreement (see Sec.  404.1927 of this 
chapter).
    (c) When we will extend the time period to request a 
reconsideration. If you want a reconsideration of the initial 
determination but do not request one within 60 days after the date you 
receive notice of the initial determination, you may ask us for more 
time to request a reconsideration. You must make your request in 
writing and explain why it was not filed within the stated time period. 
If you show us that you had good cause for missing the deadline, we 
will extend the time period. To determine whether good cause exists, we 
use the standards explained in Sec.  408.1011.


Sec.  408.1011  How do we determine whether you had good cause for 
missing the deadline to request review?

    (a) In determining whether you have shown that you have good cause 
for missing a deadline to request review we consider--
    (1) What circumstances kept you from making the request on time;
    (2) Whether our action misled you;
    (3) Whether you did not understand the requirements of the Act 
resulting from amendments to the Act, other legislation, or court 
decisions; and
    (4) Whether you had any physical, mental, educational, or 
linguistic limitations (including any lack of facility with the English 
language) which prevented you from filing a timely request or from 
understanding or knowing about the need to file a timely request for 
review.
    (b) Examples of circumstances where good cause may exist include, 
but are not limited to, the following situations:
    (1) You were seriously ill and were prevented from contacting us in 
person, in writing, or through a friend, relative, or other person.
    (2) There was a death or serious illness in your immediate family.
    (3) Important records were destroyed or damaged by fire or other 
accidental cause.
    (4) You were trying very hard to find necessary information to 
support your claim but did not find the information within the stated 
time periods.
    (5) You asked us for additional information explaining our action 
within the time limit, and within 60 days of receiving the explanation 
you requested reconsideration or a hearing, or within 30 days of 
receiving the explanation you requested Appeals Council review or filed 
a civil suit.
    (6) We gave you incorrect or incomplete information about when and 
how to request administrative review or to file a civil suit.
    (7) You did not receive notice of the initial determination or 
decision.
    (8) You sent the request to another Government agency in good faith 
within the time limit and the request did not reach us until after the 
time period had expired.
    (9) Unusual or unavoidable circumstances exist, including the 
circumstances described in paragraph (a)(4) of this section, which show 
that you could not have known of the need to file timely, or which 
prevented you from filing timely.


Sec.  408.1013  What are the methods for reconsideration?

    If you request reconsideration, we will give you a chance to 
present your

[[Page 62685]]

case. How you can present your case depends upon the issue involved and 
whether you are asking us to reconsider an initial determination on an 
application or an initial determination on an SVB suspension, reduction 
or termination action. The methods of reconsideration include the 
following:
    (a) Case review. We will give you an opportunity to review the 
evidence in our files and then to present oral and written evidence to 
us. We will then make a decision based on all of this evidence. The 
official who reviews the case will make the reconsidered determination.
    (b) Informal conference. In addition to following the procedures of 
a case review, an informal conference allows you an opportunity to 
present witnesses. A summary record of this proceeding will become part 
of the case record. The official who conducts the informal conference 
will make the reconsidered determination.
    (c) Formal conference. In addition to following the procedures of 
an informal conference, a formal conference allows you an opportunity 
to request us to subpoena adverse witnesses and relevant documents and 
to cross-examine adverse witnesses. A summary record of this proceeding 
will become a part of the case record. The official who conducts the 
formal conference will make the reconsidered determination.


Sec.  408.1014  What procedures apply if you request reconsideration of 
an initial determination on your application for SVB?

    When you appeal an initial determination on your application for 
benefits, we will offer you a case review, and will make our 
determination on the basis of that review.


Sec.  408.1015  What procedures apply if you request reconsideration of 
an initial determination that results in suspension, reduction, or 
termination of your SVB?

    If you have been entitled to SVB and we notify you that we are 
going to suspend, reduce or terminate your benefit payments, you can 
appeal our determination within 60 days of the date you receive our 
notice. The 60-day period may be extended if you have good cause for an 
extension of time under the conditions stated in Sec.  408.1011(b). If 
you appeal, you have the choice of a case review, informal conference 
or formal conference.


Sec.  408.1016  What happens if you request a conference?

    (a) As soon as we receive a request for a formal or informal 
conference, we will set the time, date and place for the conference. 
Formal and informal conferences are held only in the United States.
    (b) We will send you a written notice about the conference (either 
by mailing it to your last known address or by personally serving you 
with it) at least 10 days before the conference. However, we may hold 
the conference sooner if we all agree. We will not send written notice 
of the time, date, and place of the conference if you waive your right 
to receive it.
    (c) We will schedule the conference within 15 days after you 
request it, but, at our discretion or at your request, we will delay 
the conference if we think the delay will ensure that the conference is 
conducted efficiently and properly.
    (d) We will hold the conference at one of our offices in the United 
States, by telephone or in person, whichever you prefer. However, if 
you are outside the United States, we will hold the conference by 
telephone only if you request that we do so and time and language 
differences permit. We will hold the conference in person elsewhere in 
the United States if you show circumstances that make this arrangement 
reasonably necessary.


Sec.  408.1020  How do we make our reconsidered determination?

    After you request a reconsideration, we will review the evidence 
considered in making the initial determination and any other evidence 
we receive. We will make our determination based on this evidence. The 
person who makes the reconsidered determination will have had no prior 
involvement with the initial determination.


Sec.  408.1021  How does the reconsidered determination affect you?

    The reconsidered determination is binding unless--
    (a) You request a hearing before an administrative law judge within 
the stated time period and a decision is made;
    (b) The expedited appeals process is used; or
    (c) The reconsidered determination is revised.


Sec.  408.1022  How will we notify you of our reconsidered 
determination?

    We will mail a written notice of the reconsidered determination to 
you at your last known address. We will state the specific reasons for 
the determination and tell you about your right to a hearing. If it is 
appropriate, we will also tell you how to use the expedited appeals 
process.

Expedited Appeals Process


Sec.  408.1030  When can you use the expedited appeals process?

    (a) General rules. Under the expedited appeals process (EAP), you 
may go directly to a Federal District Court without first completing 
the administrative review process. For purposes of this part, we use 
the same EAP rules we use in the title XVI program (see Sec. Sec.  
416.1423-416.1428 of this chapter) except as noted in paragraph (b) of 
this section.
    (b) Exceptions. In Sec.  416.1425, the words ``one of our offices'' 
in paragraph (b) are deemed to read ``any of the offices listed in 
Sec.  408.1009(b)'' and the reference in the last sentence of paragraph 
(c) to ``Sec.  416.1411'' is deemed to read ``Sec.  408.1011.''

Hearing Before an Administrative Law Judge


Sec.  408.1040  When can you request a hearing before an administrative 
law judge (ALJ)?

    (a) General rules. For purposes of this part, we use the same rules 
on hearings before an administrative law judge (ALJ) that we use in the 
title XVI program (see Sec. Sec.  416.1429-1416.1440 of this chapter), 
except as noted in paragraph (b) of this section.
    (b) Exceptions. In Sec.  416.1433, the words ``one of our offices'' 
in paragraph (b) are deemed to read ``any of the offices listed in 
Sec.  408.1009(b)'' and the reference in the last sentence of Sec.  
416.1433(c) to ``Sec.  416.1411'' is deemed to read ``Sec.  408.1011.''

Administrative Law Judge Hearing Procedures


Sec.  408.1045  What procedures apply if you request an ALJ hearing?

    (a) General rules. For purposes of this part, we use the same rules 
on ALJ hearing procedures that we use in the title XVI program (see 
Sec. Sec.  416.1444-416.1461 of this chapter), except as noted in 
paragraph (b) of this section.
    (b) Exceptions. (1) In Sec.  416.1446(b)(1), the last sentence does 
not apply under this part.
    (2) In Sec.  416.1452(a)(1)(i), the words ``supplemental security 
income'' are deemed to read ``SVB.''
    (3) In Sec.  416.1457, the provisions of paragraph (c)(4) do not 
apply under this part.

Appeals Council Review


Sec.  408.1050  When can you request Appeals Council review of an ALJ 
hearing decision or dismissal of a hearing request?

    (a) General rules. For purposes of this part, we use the same rules 
on Appeals Council review that we use in the title

[[Page 62686]]

XVI program (see Sec. Sec.  416.1467-416.1482 of this chapter), except 
as noted in paragraph (b) of this section.
    (b) Exceptions. (1) In Sec.  416.1468(b), the words ``one of our 
offices'' in the third sentence are deemed to read ``any of the offices 
listed in Sec.  408.1009(b).''
    (2) In Sec.  416.1469(d), the last sentence does not apply under 
this part.
    (3) In Sec.  416.1471, paragraph (b) does not apply under this 
part.
    (4) In Sec.  416.1482, the reference to ``Sec.  416.1411'' in the 
last sentence is deemed to read ``Sec.  408.1011.''

Court Remand Cases


Sec.  408.1060  What happens if a Federal Court remands your case to 
the Commissioner?

    For purposes of this part, we use the same rules on court remand 
cases that we use in the title XVI program (see Sec. Sec.  416.1483-
416.1485 of this chapter).

Reopening and Revising Determinations and Decisions


Sec.  408.1070  When will we reopen a final determination?

    (a) General rules. For purposes of this part, we use the same rules 
on reopening and revising determinations and decisions that we use in 
the title XVI program (see Sec. Sec.  416.1487-416.1494 of this 
chapter), except as noted in paragraph (b) of this section.
    (b) Exceptions. (1) In Sec.  416.1488, an additional paragraph (d) 
is deemed to read as follows:
    ``(d) At any time if it was wholly or partially unfavorable to you, 
but only to correct--
    (1) a clerical error; or
    (2) an error that appears on the face of the evidence that we 
considered when we made the determination or decision.''
    (2) In Sec.  416.1492(b), the parenthetical clause is deemed to 
read ``(see Sec.  408.820),'' and paragraph (d) does not apply to this 
part.
    (3) In Sec.  416.1494, the words ``one of our offices'' in the 
first sentence are deemed to read ``any of the offices listed in Sec.  
408.1009(b).''

Subpart K--Representation of Parties

    Authority: Secs. 702(a)(5) and 810(a) of the Social Security Act 
(42 U.S.C. 902(a)(5) and 1010(a)).


Sec.  408.1101  Can you appoint someone to represent you?

    (a) General rules. You may appoint someone to represent you in any 
of your dealings with us. For purposes of this part, the rules on 
representation of parties in Sec. Sec.  416.1500-416.1505, 416.1507-
416.1515 and 416.1540-416.1599 of this chapter apply except as noted in 
paragraph (b) of this section.
    (b) Exceptions. For purposes of this part:
    (1) In Sec.  416.1500, paragraph (c) does not apply.
    (2) The last sentence of Sec.  416.1503 is deemed to read: ``You 
refers to any person claiming or receiving SVB.''
    (3) In Sec.  416.1507(c), the words ``one of our offices'' are 
deemed to read ``any of the offices listed in Sec.  408.1009(b).''
    (4) In Sec.  416.1510(b), the reference to ``title XVI of the Act'' 
is deemed to read ``title VIII of the Act,'' and the reference to 
``Sec.  416.315'' is deemed to read ``Sec.  408.315.''
    (5) In Sec.  416.1540, the parenthetical clause in paragraph (b), 
the second sentences in paragraphs (b)(1) and (b)(2), and paragraph 
(c)(2) do not apply, and the references to ``Sec.  416.1411(b)'' in 
paragraphs (c)(4) and (c)(7)(i) are deemed to read ``Sec.  
408.1011(b).''
    (6) In Sec.  416.1545, paragraph (c) does not apply.
    (7) In Sec.  416.1599, paragraph (d) is deemed to read: ``The 
Appeals Council will not grant the request unless it is reasonably 
satisfied that the person will in the future act according to the 
provisions of our regulations.''

Subpart L--Federal Administration of State Recognition Payments

    Authority: Secs. 702(a)(5) and 810A of the Social Security Act 
(42 U.S.C. 902(a)(5) and 1010a).


Sec.  408.1201  What are state recognition payments?

    (j) State recognition payments; defined. State recognition payments 
are any payments made by a State or one of its political subdivisions 
to an individual who is entitled to SVB, if the payments are made:
    (1) As a supplement to monthly SVB payments; and
    (2) Regularly, on a periodic recurring, or routine basis of at 
least once a quarter; and
    (3) In cash, which may be actual currency, or any negotiable 
instrument convertible into cash upon demand.
    (b) State; defined. For purposes of this subpart, State means a 
State of the United States or the District of Columbia.


Sec.  408.1205  How can a State have SSA administer its State 
recognition payment program?

    A State (or political subdivision) may enter into a written 
agreement with SSA, under which SSA will make recognition payments on 
behalf of the State (or political subdivision). The regulations in 
effect for the SVB program also apply in the Federal administration of 
State recognition payments except as necessary for the effective and 
efficient administration of both the SVB program and the State's 
recognition payment program.


Sec.  408.1210  What are the essential elements of an administration 
agreement?

    (a) Payments. The agreement must provide that recognition payments 
can only be made to individuals who are receiving SVB payments.
    (b) Administrative costs.--(1) General rule. SSA will assess each 
State that elects Federal administration of its recognition payments an 
administration fee for administering those payments.
    (2) Determining the administration fee. The administration fee is 
assessed and paid monthly and is derived by multiplying the number of 
State recognition payments we make on behalf of a State for any month 
in a fiscal year by the applicable dollar rate for the fiscal year. The 
number of recognition payments we make in a month is the total number 
of checks we issue, and direct deposits we make, to recipients in that 
month, that are composed in whole or in part of State recognition 
funds. The dollar amounts are as follows:
    (i) For fiscal year 2001, $8.10;
    (ii) For fiscal year 2002, $8.50; and
    (iii) For fiscal year 2003 and each succeeding fiscal year
    (A) The applicable rate in the preceding fiscal year, increased by 
the percentage, if any, by which the Consumer Price Index for the month 
of June of the calendar year of the increase exceeds the Consumer Price 
Index for the month of June of the calendar year preceding the calendar 
year of the increase, and rounded to the nearest whole cent; or
    (B) A different rate if the Commissioner determines the different 
rate is appropriate for the State considering the complexity of 
administering the State's recognition payment program.
    (c) Agreement period. The agreement period for a State that has 
elected Federal administration of its recognition payments extends for 
one year from the date the agreement was signed unless otherwise 
designated in the agreement. The agreement will be automatically 
renewed for a period of one year unless either the State or SSA gives 
written notice not to renew, at least 90 days before the beginning of 
the new period. For a State to elect Federal administration of its 
recognition payment program, it must notify SSA of its intent to enter 
into an agreement, furnishing the necessary payment

[[Page 62687]]

specifications, at least 120 days before the first day of the month for 
which it wishes Federal administration to begin, and have executed such 
agreement at least 30 days before such day.
    (d) Modification or termination. The agreement may be modified at 
any time by mutual consent. The State or SSA may terminate the 
agreement upon 90 days written notice to the other party, provided the 
effective date of the termination is the last day of a quarter. 
However, the State may terminate the agreement upon 45 days written 
notice to SSA if: (1) The State does not wish to comply with a 
regulation promulgated by SSA after the execution of the agreement; and 
(2) the State provides its written notice within 30 days of the 
effective date of the regulation. The Commissioner is not precluded 
from terminating the agreement in less than 90 days if the State has 
failed to materially comply with the provisions of Sec.  408.1235 on 
State transfer of funds to SSA.


Sec.  408.1215  How do you establish eligibility for Federally 
administered State recognition payments?

    (a) Applications. When you file an application for SVB under 
subpart C of this part, you are deemed to have filed an application for 
any Federally administered State recognition payments for which you may 
be eligible unless you waive your right to such payments as provided 
for in Sec.  408.1230. However, you will be required to give us a 
supplemental statement if additional information is necessary to 
establish your eligibility or to determine the correct amount of your 
State recognition payment.
    (b) Evidence requirements. The evidence requirements and 
developmental procedures of this part also apply with respect to 
Federally administered State recognition payments.
    (c) Determination. Where not inconsistent with the provisions of 
this subpart, we determine your eligibility for and the amount of your 
State recognition payment using the rules in subparts A through K of 
this part.


Sec.  408.1220  How do we pay Federally administered recognition 
payments?

    (a) Payment procedures. We make Federally administered State 
recognition payments on a monthly basis and we include them in the same 
check as your SVB payment. The State recognition payment is for the 
same month as your SVB payment.
    (b) Maximum amount. Except as specified in paragraph (c) of this 
section, there is no restriction on the amount of a State recognition 
payment that SSA will administer on behalf of a State.
    (c) Minimum amount. SSA will not administer State recognition 
payments in amounts less than $1 per month. Hence, recognition payment 
amounts of less than $1 will be raised to a dollar.


Sec.  408.1225  What happens if you receive an overpayment?

    If we determine that you received an overpayment, we will adjust 
future federally administered State recognition payments you are 
entitled to. Our rules and requirements (see Sec. Sec.  408.910 through 
408.941) that apply to recovery (or waiver) of SVB overpayments also 
apply to the recovery (or waiver) of Federally administered State 
recognition overpayments. If your entitlement to State recognition 
payments ends before you have repaid the overpayment, we will annotate 
your record (specifying the amount of the overpayment) to permit us to 
recoup the overpaid amount if you become reentitled to recognition 
payments from the same State.


Sec.  408.1226  What happens if you are underpaid?

    If we determine that you are due an underpayment of State 
recognition payments, we will pay the amount you were underpaid 
directly to you, or to your representative.


Sec.  408.1230  Can you waive State recognition payments?

    (a) Waiver request in writing. You may waive your right to receive 
State recognition payments if you make a written request. If you make 
your request before you become entitled to SVB, you will not be 
entitled to State recognition payments. If you make your request after 
you become entitled to SVB, your request will be effective with the 
month we receive your request, or with an earlier month if you refund 
to us the amount of any recognition payment(s) we made to you for the 
earlier period.
    (b) Cancelling your waiver. You may cancel your waiver of State 
recognition payments at any time by making a written request with us. 
The cancellation will be effective the month in which it is filed. The 
date your request is received in a Social Security office or the 
postmarked date, if the written request was mailed, will be the filing 
date, whichever is earlier.


Sec.  408.1235  How does the State transfer funds to SSA to administer 
its recognition payment program?

    (a) Payment transfer and adjustment. (1) Any State that has entered 
into an agreement with SSA which provides for Federal administration of 
such State's recognition payments will transfer to SSA:
    (i) An amount of funds equal to SSA's estimate of State recognition 
payments for any month which will be made by SSA on behalf of such 
State; and
    (ii) An amount of funds equal to SSA's estimate of administration 
fees for any such month determined in the manner described in Sec.  
408.1210(b).
    (3) In order for SSA to make State recognition payments on behalf 
of a State for any month as provided by the agreement, the estimated 
amount of State funds referred to in paragraph (a)(1)(i) of this 
section together with the estimated amount of administration fees 
referred to in paragraph (a)(1)(ii) of this section, for that month, 
must be on deposit with SSA on the State recognition payment transfer 
date, which is:
    (i) The business day preceding the date that the Commissioner pays 
such monthly recognition payments; or
    (ii) With respect to such monthly payments paid for the month that 
is the last month of the State's fiscal year, the fifth business day 
following such date.
    (b) Accounting of State funds. (1) As soon as feasible after the 
end of each calendar month, SSA will provide the State with a statement 
showing, cumulatively, the total amounts paid by SSA on behalf of the 
State during the current Federal fiscal year; the fees charged by SSA 
to administer such recognition payments; the State's total liability; 
and the end-of-month balance of the State's cash on deposit with SSA.
    (2) SSA will provide the State with an accounting of State funds 
received as State recognition payments and administration fees within 
three calendar months following the termination of an agreement under 
Sec.  408.1210(d).
    (3) Adjustments will be made because of State funds due and payable 
or amounts of State funds recovered for calendar months for which the 
agreement was in effect. Interest will be incurred by SSA and the 
States with respect to the adjustment and accounting of State 
recognition payments funds in accordance with applicable laws and 
regulations of the United States Department of the Treasury.
    (c) State audit. Any State entering into an agreement with SSA 
which provides for Federal administration of the State's recognition 
payments has the right to an audit (at State expense) of the payments 
made by SSA on behalf of such State. The Commissioner and the State 
shall mutually agree upon a satisfactory audit

[[Page 62688]]

arrangement to verify that recognition payments paid by SSA on behalf 
of the State were made in accordance with the terms of the 
administration agreement under Sec.  408.1205. Audit findings will be 
resolved in accordance with the provisions of the State's agreement 
with SSA.

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

    6. 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.

    7. 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. * * *

[FR Doc. 03-27434 Filed 11-4-03; 8:45 am]
BILLING CODE 4191-02-P