[Federal Register Volume 69, Number 163 (Tuesday, August 24, 2004)]
[Proposed Rules]
[Pages 51962-51967]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-19321]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404, 408 and 416

[Regulations No. 4, 8 and 16]
RIN 0960-AG06


Expanded Authority for Cross-Program Recovery of Benefit 
Overpayments

AGENCY: Social Security Administration.

ACTION: Proposed rules.

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SUMMARY: To implement part of the Social Security Protection Act (SSPA) 
of 2004, we propose to revise our regulations on the recovery of 
overpayments incurred under one of our programs from benefits payable 
to the overpaid individual under other programs we administer. 
Provisions of the SSPA expand the authority for cross-program recovery 
of overpayments made in our various programs. Implementation of these 
proposed regulatory revisions when they become effective will yield 
significant program savings.

DATES: To be sure that we consider your comments, we must receive them 
by September 23, 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/LawsRegs or the Federal eRulemaking Portal at http://www.regulations.gov; e-mail to [email protected]; telefax to (410) 
966-2830; or letter to the Commissioner of Social Security, P.O. Box 
17703, Baltimore, Maryland 21235-7703. You may also deliver them to the 
Office of Regulations, Social Security Administration, 100 Altmeyer 
Building, 6401 Security Boulevard, Baltimore, Maryland 21235-6401, 
between 8 a.m. and 4:30 p.m. on regular business days. Comments are 
posted on our Internet site at http://policy.ssa.gov/pnpublic.nsf/LawsRegs or you may inspect them 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 at http://www.gpoaccess.gov/fr/index.html. It is also available on the Internet site for

[[Page 51963]]

SSA (i.e., Social Security Online) at http://policy.ssa.gov/pnpublic.nsf/LawsRegs.

FOR FURTHER INFORMATION CONTACT: Richard Bresnick, Social Insurance 
Specialist, Office of Regulations, Social Security Administration, 100 
Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, 
(410) 965-1758 or TTY (410) 966-5609. For information on eligibility or 
filing for 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:

Background

    Section 210 of the SSPA, Public Law (Pub. L.) 108-203, enacted on 
March 2, 2004, significantly expands our ability to recover 
overpayments made in one of our programs from benefits payable to the 
overpaid individual under other programs we administer. These programs 
are Social Security benefits under title II of the Social Security Act 
(the Act), Special Veterans Benefits (SVB) under title VIII of the Act 
and Supplemental Security Income (SSI) benefits under title XVI of the 
Act.
    Prior to enactment of the SSPA, sections 808, 1147 and 1147A of the 
Act allowed cross-program adjustment to recover overpayments as 
follows:
     We could withhold no more than 10 percent of any title II 
benefit payment (i.e., a current monthly payment and a past-due 
payment) to recover an SSI overpayment, if the person is not currently 
eligible for SSI;
     We could withhold any title II benefit payment to recover 
an SVB overpayment, if the person is not qualified for SVB;
     We could withhold no more than 10 percent of any SVB 
payment to recover an SSI overpayment, if the person is not currently 
eligible for SSI;
     We could withhold any SVB payment to recover a title II 
overpayment, if the person is not currently receiving title II 
benefits.
    The Act did not allow us to withhold SSI payments to recover title 
II or SVB overpayments.
    Section 210 of the SSPA repealed section 1147A and cross-program 
recovery provisions in section 808 of the Act and amended section 1147 
to expand our cross-program recovery authority to allow recovery of an 
overpayment occurring under any of these programs from benefits or 
payments due in any other of these programs at a rate not to exceed 10 
percent of the monthly benefit. It allows for unlimited withholding of 
past-due benefits in one program to recover an overpayment paid under 
another program. It also allows for cross-program recovery even if the 
individual is entitled under the program in which the overpayment was 
made.

Explanation of Proposed Changes

    We propose to change the regulations in 20 CFR parts 404, 408 and 
416 to reflect the expanded cross-program recovery authority.
    Currently, part 404 has no provisions permitting cross-program 
recovery, since that option has not been applied to collect title II 
benefit overpayments. In part 404, we propose to add new Sec. Sec.  
404.530, .535, .540, and .545, which parallel existing regulations at 
Sec. Sec.  408.930 through 408.933, to include the expanded authority 
to recover title II overpayments as follows:
     We may withhold from a current monthly SSI payment no more 
than the lesser of that payment or 10 percent of the monthly income to 
recover a title II overpayment;
     We may withhold no more than 10 percent of current monthly 
SVB payments to recover a title II overpayment;
     We may withhold up to 100 percent of SSI and SVB past-due 
payments to recover a title II overpayment.
    We propose to change Sec. Sec.  408.930 through 408.933 to reflect 
the expanded authority to recover title VIII overpayments as follows:
     We may withhold from a current monthly SSI payment no more 
than the lesser of that payment or 10 percent of the monthly income to 
recover an SVB overpayment;
     We may withhold no more than 10 percent of current monthly 
title II benefits to recover an SVB overpayment;
     We may withhold up to 100 percent of title II and SSI 
past-due payments to recover an SVB overpayment.
    We propose to change the regulations at Sec.  416.570 to delete 
obsolete information. We propose to change the regulations at Sec.  
416.572 and add Sec. Sec.  416.573, .574, and .575 to reflect the 
expanded authority to recover title XVI overpayments as follows:
     We may withhold no more than 10 percent of current monthly 
title II benefits to recover an SSI overpayment;
     We may withhold no more than 10 percent of current monthly 
SVB payments to recover an SSI overpayment;
     We may withhold up to 100 percent of title II and SVB 
past-due payments to recover an SSI overpayment.
    The new sections follow the same structure as the existing 
regulations at Sec. Sec.  408.930 through 408.933. We believe that this 
format is easy for members of the public to understand. We propose to 
remove the title II example from Sec.  416.572 because the example 
illustrated how we applied the 10 percent limit to past-due title II 
benefits. Under the new law, this limitation no longer applies. We 
propose to remove the title VIII example from Sec.  416.572 because we 
have added a cross-reference to the title VIII regulations that explain 
how title VIII benefits are computed. We propose to remove from the SVB 
and SSI regulations the provisions that preclude cross-program recovery 
when the overpaid person is currently eligible for payment under the 
program from which we made the overpayment. The amended statute does 
not contain that restriction. Proposed Sec.  416.572(b) also states 
that if we are already making recovery from title II benefits, the 
maximum amount which may be withheld from title XVI monthly benefits is 
the lesser of the person's title XVI benefit for that month or 10 
percent of the person's total income for that month, not including the 
title II income used to compute the title XVI benefit.
    Like the current regulations in 20 CFR part 408, subpart I, and 
part 416, subpart E, the proposed regulations for each program require 
that, before we impose cross-program recovery, we would notify the 
overpaid person of the proposed action and allow the overpaid person an 
opportunity to pay the remaining balance of the overpayment debt, to 
request review of the status of the debt, to request waiver of 
recovery, and to request recovery of the debt from current monthly 
benefits at a different rate than that stated in the notice. We would 
not begin cross-program recovery from current monthly benefits until 30 
calendar days have elapsed after the date of the notice. If within that 
time period the person requests review of the debt, waiver of recovery 
of the debt, or reduction of the rate of recovery from current monthly 
benefits stated in the notice, we would not take any action to reduce 
current monthly benefits before we notify the debtor of our 
determination on the request. As permitted by section 1147(b)(2)(A) of 
the Act, the regulations provide that, if we find that the overpaid 
person or that person's spouse was involved in willful 
misrepresentation or concealment of material information in connection 
with the overpayment, we could withhold the entire amount of the 
current monthly benefit.

Clarity of These Rules

    Executive Order (E.O.) 12866, as amended by E.O. 13258, requires 
each

[[Page 51964]]

agency to write all rules in plain language. In addition to your 
substantive comments on these proposed rules, we invite your comments 
on how to make them easier to understand. For example:
     Have we organized the material to suit your needs?
     Are the requirements in the rules clearly stated?
     Do the rules contain technical language or jargon that 
isn't clear?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the rules easier to understand?
     Would more (but shorter) sections be better?
     Could we improve clarity by adding tables, lists, or 
diagrams?
     What else could we do to make the rules easier to 
understand?

Regulatory Procedures

Executive Order 12866

    In view of our need to balance our stewardship responsibilities to 
the public and the public funds we administer with our responsibility 
to provide the public the opportunity to comment on our proposed rules, 
we are providing a 30-day comment period for these proposed rules 
rather than the 60-day period we usually provide. We believe that, in 
this instance, a 30-day period is sufficiently long to allow the public 
a meaningful opportunity to comment on the proposed rules, in 
accordance with E.O. 12866. The proposed rules are not especially 
complicated. They contain many of the same policies, practices and 
procedures that we already apply under current regulations at 
Sec. Sec.  408.930 through 408.933 and 416.572. The public had a 60-day 
period to comment on the current regulations before they were published 
as final rules. As we stated above, these proposed rules, when 
published in final, would implement section 210 of the SSPA. The 
impetus for this legislation was, in large part, the processing of a 
large number of title II claims (the Special Disability Workload) with 
potentially large title II underpayments payable to individuals who owe 
outstanding SSI overpayments. Under the current regulations (Sec.  
416.572), we can only withhold 10 percent of past-due title II benefits 
to recover the SSI overpayments in these cases, but the SSPA allows up 
to 100 percent withholding of past-due benefits. The sooner the changes 
are made, the more significant the program savings will be.
    We have consulted with the Office of Management and Budget (OMB) 
and determined that these proposed rules meet the requirements for a 
significant regulatory action under E.O. 12866, as amended by E.O. 
13258. Thus, they were subject to OMB review.

Regulatory Flexibility Act

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

Paperwork Reduction Act

    These proposed rules contain reporting requirements at Sec.  
408.932(c), (d) and (e). The public reporting burden for these 
requirements has been cleared by the Office of Management and Budget 
under OMB No. 0960-0683, expiring 01/31/2007.
    There are also reporting requirements at proposed Sec. Sec.  
404.540(c), (d) and (e) and 416.574(c), (d) and (e). The public 
reporting burden is accounted for in the Information Collection 
Requests for the various forms that the public uses to submit the 
information required by these rules to SSA. Consequently, a 1-hour 
placeholder burden is being assigned to the specific reporting 
requirements contained in these rules. An Information Collection 
Request has been submitted to OMB. While these rules will be effective 
upon publication in final, these burdens will not be effective until 
cleared by OMB. 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. We will publish a notice in the 
Federal Register upon OMB approval of the information collection 
requirements. Comments should be submitted and/or faxed to the OMB desk 
officer for SSA and to SSA at the following addresses/fax numbers:

Office of Management and Budget, Attn: Desk Officer for SSA, Fax 
Number: 202-395-6974.
Social Security Administration, Attn: SSA Reports Clearance Officer, 
Rm. 1338 Annex, 6401 Security Boulevard, Baltimore, MD 21235-6401. Fax 
number: 410-965-6400.

    Comments can be received for up to 60 days after publication of 
this notice and will be most useful if received within 30 days from 
publication of these proposed rules. To receive a copy of the OMB 
clearance package, you may call the SSA Reports Clearance Officer on 
410-965-0454.

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

List of Subjects

20 CFR Part 404

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

20 CFR Part 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: July 19, 2004.
Jo Anne B. Barnhart,
Commissioner of Social Security.
    For the reasons set out in the preamble, we propose to amend 
subpart F of part 404, subpart I of part 408 and subpart E of part 416 
of chapter III of title 20 of the Code of Federal Regulations as set 
forth below:

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

Subpart F--[Amended]

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

    Authority: Secs. 204, 205(a), 702(a)(5), and 1147 of the Social 
Security Act (42 U.S.C. 404, 405(a), 902(a)(5), and 1320b-17; 31 
U.S.C. 3720A.

    2. Sections 404.530, .535, .540 and .545 are added to read as 
follows:


Sec.  404.530  Are title VIII and title XVI benefits subject to 
adjustment to recover title II overpayments?

    (a) Definitions--(1) Cross-program recovery. Cross-program recovery 
is the process that we will use to collect title II overpayments from 
benefits payable to you under title VIII and title XVI of the Act.
    (2) Benefits payable. For purposes of this section, benefits 
payable means the

[[Page 51965]]

amount of title VIII or title XVI benefits you actually would receive. 
For title VIII benefits, it includes your monthly benefit and any past-
due benefits after any reduction by the amount of income for the month 
as described in Sec. Sec.  408.505 through 408.515 of this chapter. For 
title XVI benefits, it includes your monthly benefit and any past-due 
benefits as described in Sec.  416.420 of this chapter.
    (b) When may we collect title II overpayments using cross-program 
recovery? Except as provided in paragraphs (b)(1) through (b)(3) of 
this section, we may use cross-program recovery to collect a title II 
overpayment you owe when benefits are payable to you under title VIII, 
title XVI, or both.
    (1) We will not apply cross-program recovery against your title 
VIII or title XVI benefits while you are refunding your title II 
overpayment by regular monthly installments.
    (2) We will not apply cross-program recovery against your title 
VIII benefits while we are recovering a title VIII overpayment by 
adjusting your title VIII benefits under Sec. Sec.  408.922 through 
408.923 of this chapter.
    (3) We will not apply cross-program recovery against your title XVI 
benefits while we are recovering a title XVI overpayment by adjusting 
your title XVI benefits under Sec.  416.571 of this chapter.


Sec.  404.535  How much will we withhold from your title VIII and title 
XVI benefits to recover a title II overpayment?

    (a) If past-due benefits are payable to you, we will withhold the 
lesser of the entire overpayment balance or the entire amount of past-
due benefits.
    (b)(1) We will collect the overpayment from current monthly 
benefits due in a month under title VIII and title XVI by withholding 
the lesser of the amount of the entire overpayment balance or:
    (i) 10 percent of the monthly title VIII benefits payable for that 
month and
    (ii) in the case of title XVI benefits, an amount no greater than 
the lesser of the benefit payable for that month or an amount equal to 
10 percent of your income for that month (including such monthly 
benefit but excluding payments under title II when recovery is also 
made from title II and excluding income excluded pursuant to Sec. Sec.  
416.1112 and 416.1124 of this chapter).
    (2) Paragraph (b)(1) of this section does not apply if:
    (i) You request and we approve a different rate of withholding, or
    (ii) You or your spouse willfully misrepresented or concealed 
material information in connection with the overpayment.
    (c) In determining whether to grant your request that we withhold 
less than the amount described in paragraph (b)(1) of this section, we 
will use the criteria applied under Sec.  404.508 to similar requests 
about withholding from title II benefits.
    (d) If you or your spouse willfully misrepresented or concealed 
material information in connection with the overpayment, we will 
collect the overpayment by withholding the lesser of the overpayment 
balance or the entire amount of title VIII and title XVI benefits 
payable to you. We will not collect at a lesser rate. (See Sec.  
416.571 of this chapter for what we mean by concealment of material 
information.)


Sec.  404.540  Will you receive notice of our intention to apply cross-
program recovery?

    Before we collect an overpayment from you using cross-program 
recovery, 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 cross-program recovery;
    (b) We will withhold a specific amount from the title VIII or title 
XVI benefits (see Sec.  404.535);
    (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 from your 
current monthly benefits (the notice will not include this information 
if Sec.  404.535(d) applies); and
    (e) You may ask us to waive collection of this overpayment balance.


Sec.  404.545  When will we begin cross-program recovery from current 
monthly benefits?

    (a) We will begin collecting the overpayment balance from your 
title VIII or title XVI current monthly benefits or payments by cross-
program recovery no sooner than 30 calendar days after the date of the 
notice described in Sec.  404.540. If within that 30-day period you pay 
us the full overpayment balance stated in the notice, we will not begin 
cross-program recovery.
    (b) If within that 30-day period you ask us to review our 
determination that you still owe us this overpayment balance, we will 
not begin cross-program recovery from your current monthly 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 cross-
program recovery from your current monthly benefits until we determine 
the amount we will withhold. This paragraph does not apply when Sec.  
404.535(d) applies.
    (d) If within that 30-day period you ask us to waive recovery of 
the overpayment balance, we will not begin cross-program recovery from 
your current monthly benefits before we review the matter and notify 
you of our decision in writing. See Sec. Sec.  404.506 through 404.512.

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

Subpart I--[Amended]

    3. The authority citation for subpart I of part 408 is revised to 
read as follows:

    Authority: Secs. 702(a)(5), 808, and 1147 of the Social Security 
Act (42 U.S.C. 902(a), 1008, and 1320b-17; 31 U.S.C. 3720A.

    4. Section 408.930 is revised to read as follows:


Sec.  408.930  Are title II and title XVI benefits subject to 
adjustment to recover title VIII overpayments?

    (a) Definitions--(1) Cross-program recovery. Cross-program recovery 
is the process that we will use to collect title VIII overpayments from 
benefits payable to you under title II or title XVI of the Social 
Security Act.
    (2) Benefits payable. For purposes of this section, benefits 
payable means the amount of title II or title XVI benefits you actually 
would receive. For title II benefits, it includes your monthly benefit 
and your past-due benefits after any reductions or deductions listed in 
Sec.  404.401(a) and (b) of this chapter. For title XVI benefits, it 
includes your monthly benefit and your past-due benefits as described 
in Sec.  416.420 of this chapter.
    (b) When may we collect title VIII overpayments using cross-program 
recovery? Except as provided in paragraphs (b)(1) through (b)(3) of 
this section, we may use cross-program recovery to collect a title VIII 
overpayment you owe when benefits are payable to you under title II, 
title XVI, or both.
    (1) We will not apply cross-program recovery against your title II 
or title XVI benefits while you are refunding your title VIII 
overpayment by regular monthly installments.
    (2) We will not apply cross-program recovery against your title II 
benefits while we are recovering a title II overpayment by adjusting 
your title II benefits under Sec.  404.502 of this chapter.
    (3) We will not apply cross-program recovery against your title XVI 
benefits while we are recovering a title XVI overpayment by adjusting 
your title XVI benefits under Sec.  416.571 of this chapter.
    5. Section 408.931 is revised to read as follows:

[[Page 51966]]

Sec.  408.931  How much will we withhold from your title II and title 
XVI benefits to recover a title VIII overpayment?

    (a) If past-due benefits are payable to you, we will withhold the 
lesser of the entire overpayment balance or the entire amount of past-
due benefits.
    (b)(1) We will collect the overpayment from current monthly 
benefits due in a month under title II and title XVI by withholding the 
lesser of the amount of the entire overpayment balance or:
    (i) 10 percent of the monthly title II benefits payable for that 
month and
    (ii) In the case of title XVI benefits, an amount no greater than 
the lesser of the benefit payable for that month or an amount equal to 
10 percent of your income for that month (including such monthly 
benefit but excluding payments under title II when recovery is also 
made from title II and excluding income excluded pursuant to Sec. Sec.  
416.1112 and 416.1124 of this chapter).
    (2) Paragraph (b)(1) of this section does not apply if:
    (i) You request and we approve a different rate of withholding, or
    (ii) You or your spouse willfully misrepresented or concealed 
material information in connection with the overpayment.
    (c) In determining whether to grant your request that we withhold 
less than the amount described in paragraph (b)(1) of this section, we 
will use the criteria applied under Sec.  408.923 to similar requests 
about withholding from title VIII benefits.
    (d) If you or your spouse willfully misrepresented or concealed 
material information in connection with the overpayment, we will 
collect the overpayment by withholding the lesser of the overpayment 
balance or the entire amount of title II benefits and title XVI 
benefits payable to you. We will not collect at a lesser rate. (See 
Sec.  408.923 for what we mean by concealment of material information.)
    6. Section 408.932 is revised to read as follows:


Sec.  408.932  Will you receive notice of our intention to apply cross-
program recovery?

    Before we collect an overpayment from you using cross-program 
recovery, 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 cross-program recovery;
    (b) We will withhold a specific amount from the title II or title 
XVI benefits (see Sec.  408.931(b));
    (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 from your 
current monthly benefits (the notice will not include this information 
if Sec.  408.931(d) applies); and
    (e) You may ask us to waive collection of this overpayment balance.
    7. Section 408.933 is revised to read as follows:


Sec.  408.933  When will we begin cross-program recovery from your 
current monthly benefits?

    (a) We will begin collecting the overpayment balance by cross-
program recovery from your title II and title XVI current monthly 
benefits no sooner than 30 calendar days after the date of the notice 
described in Sec.  408.932. If within that 30-day period you pay us the 
full overpayment balance stated in the notice, we will not begin cross-
program recovery from your current monthly benefits.
    (b) If within that 30-day period you ask us to review our 
determination that you still owe us this overpayment balance, we will 
not begin cross-program recovery from your current monthly 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 cross-
program recovery from your current monthly benefits until we determine 
the amount we will withhold. This paragraph does not apply when Sec.  
408.931(d) applies.
    (d) If within that 30-day period you ask us to waive recovery of 
the overpayment balance, we will not begin cross-program recovery from 
your current monthly benefits before we review the matter and notify 
you of our decision in writing. See Sec. Sec.  408.910 through 408.914.

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

Subpart E--[Amended]

    8. 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.

    9. Section 416.570 is revised to read as follows:


Sec.  416.570  Adjustment--general rule.

    When a recipient has been overpaid, the overpayment has not been 
refunded, and waiver of adjustment or recovery is not applicable, any 
payment due the overpaid recipient or his or her eligible spouse (or 
recovery from the estate of either or both when either or both die 
before adjustment is completed) is adjusted for recovery of the 
overpayment. Adjustment will generally be accomplished by withholding 
each month the amount set forth in Sec.  416.571 from the benefit 
payable to the individual except that, when the overpayment results 
from the disposition of resources as provided by Sec. Sec.  416.1240(b) 
and 416.1244, the overpayment will be recovered by withholding any 
payments due the overpaid recipient or his or her eligible spouse 
before any further payment is made. Absent a specific request from the 
person from whom recovery is sought, no overpayment made under title 
XVIII of the Act will be recovered by adjusting SSI benefits. In no 
case shall an overpayment of SSI benefits be adjusted against title 
XVIII benefits. No funds properly deposited into a dedicated account 
(see Sec. Sec.  416.546 and 416.640(e)) can be used to repay an 
overpayment while the overpaid individual remains subject to the 
provisions of those sections.
    10. Section 416.572 is revised and sections 416.573, .574 and .575 
are added to read as follows:


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

    (a) Definitions--(1) Cross-program recovery. Cross-program recovery 
is the process that we will use to collect title XVI overpayments from 
benefits payable to you under title II or title VIII of the Social 
Security Act.
    (2) Benefits payable. For purposes of this section, benefits 
payable means the amount of title II or title VIII benefits you 
actually would receive. For title II benefits, it includes your monthly 
benefit and your past-due benefits after any reductions or deductions 
listed in Sec.  404.401(a) and (b) of this chapter. For title VIII 
benefits, it includes your monthly benefit and any past-due benefits 
after any reduction by the amount of income for the month as described 
in Sec. Sec.  408.505 through 408.510 of this chapter.
    (b) When may we collect title XVI overpayments using cross-program 
recovery? Except as provided in paragraphs (b)(1) through (b)(3) of 
this section, we may use cross-program recovery to collect a title XVI 
overpayment you owe when benefits are payable to you under title II, 
title VIII, or both.
    (1) We will not apply cross-program recovery against your title II 
or title VIII benefits while you are refunding your

[[Page 51967]]

title XVI overpayment by regular monthly installments.
    (2) We will not apply cross-program recovery against your title II 
benefits while we are recovering a title II overpayment by adjusting 
your title II benefits under Sec.  404.502 of this chapter.
    (3) We will not apply cross-program recovery against your title 
VIII benefits while we are recovering a title VIII overpayment by 
adjusting your title VIII benefits under Sec. Sec.  408.922 through 
408.923 of this chapter.


Sec.  416.573  How much will we withhold from your title II and title 
VIII benefits to recover a title XVI overpayment?

    (a) If past-due benefits are payable to you, we will withhold the 
lesser of the entire overpayment balance or the entire amount of past-
due benefits.
    (b)(1) We will collect the overpayment from current monthly 
benefits due in a month by withholding the lesser of the amount of the 
entire overpayment balance or 10 percent of the monthly title II 
benefits and monthly title VIII benefits payable to you in the month.
    (2) If we are already recovering a title II, title VIII or title 
XVI overpayment from your monthly title II benefit, we will figure your 
monthly withholding from title XVI (as described in Sec.  416.571) 
without including your title II income in your total countable income.
    (3) Paragraph (b)(1) of this section does not apply if:
    (i) You request and we approve a different rate of withholding, or
    (ii) You or your spouse willfully misrepresented or concealed 
material information in connection with the overpayment.
    (c) In determining whether to grant your request that we withhold 
less than the amount described in paragraph (b)(1) of this section, we 
will use the criteria applied under Sec.  416.571 to similar requests 
about withholding from title XVI benefits.
    (d) If you or your spouse willfully misrepresented or concealed 
material information in connection with the overpayment, we will 
collect the overpayment by withholding the lesser of the overpayment 
balance or the entire amount of title II benefits and title VIII 
benefits payable to you. We will not collect at a lesser rate. (See 
Sec.  416.571 for what we mean by concealment of material information.)


Sec.  416.574  Will you receive notice of our intention to apply cross-
program recovery?

    Before we collect an overpayment from you using cross-program 
recovery, 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 cross-program recovery;
    (b) We will withhold a specific amount from the title II or title 
VIII benefits (see Sec.  416.573);
    (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 from your 
current monthly benefits (the notice will not include this information 
if Sec.  416.573(d) applies); and
    (e) You may ask us to waive collection of this overpayment balance.


Sec.  416.575  When will we begin cross-program recovery from your 
current monthly benefits?

    (a) We will begin collecting the overpayment balance by cross-
program recovery from your current monthly title II and title VIII 
benefits no sooner than 30 calendar days after the date of the notice 
described in Sec.  416.574. If within that 30-day period you pay us the 
full overpayment balance stated in the notice, we will not begin cross-
program recovery.
    (b) If within that 30-day period you ask us to review our 
determination that you still owe us this overpayment balance, we will 
not begin cross-program recovery from your current monthly 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 from your current monthly benefits than the amount stated in the 
notice, we will not begin cross-program recovery until we determine the 
amount we will withhold. This paragraph does not apply when Sec.  
416.573(d) applies.
    (d) If within that 30-day period you ask us to waive recovery of 
the overpayment balance, we will not begin cross-program recovery from 
your current monthly benefits before we review the matter and notify 
you of our decision in writing. See Sec. Sec.  416.550 through 416.556.
[FR Doc. 04-19321 Filed 8-23-04; 8:45 am]
BILLING CODE 4191-02-P