[Federal Register Volume 70, Number 1 (Monday, January 3, 2005)]
[Rules and Regulations]
[Pages 11-17]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-28693]


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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: Final rules with request for comment.

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SUMMARY: To implement part of the Social Security Protection Act of 
2004 (SSPA), we are revising our rules 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 
regulatory revisions when they become effective will yield significant 
program savings.
    Although we are issuing these rules as final rules, we are also 
requesting comments on certain material changes from the proposed rules 
we previously published concerning expanded cross-program recovery. 
These changes would allow us to use cross-program recovery if: an 
individual is no longer receiving benefits under a particular program 
but is making regular monthly installments to refund an overpayment 
previously received under that program; or an individual is receiving 
monthly payments under a particular program and we are recovering a 
previous overpayment made under that program by adjusting the amount of 
those monthly benefits. We will not implement these changes before we 
consider comments which we receive by the date provided below and 
publish a document in the Federal Register. If we determine that any 
further changes in these sections are warranted, we will publish 
revised rules. See ``Additional Changes'' in the SUPPLEMENTARY 
INFORMATION section for further discussion.

DATES: These rules are effective January 3, 2005. We invite public 
comments on Sec. Sec.  404.530(b), 408.930(b), and 416.572(b). To be 
sure that we consider your comments on these changes, we must receive 
them by February 2, 2005.

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 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 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;

[[Page 12]]

     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 Changes

    We are changing 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. In part 404, we are adding 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 (as 
defined in the regulation) 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 are changing 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 are changing the regulations at Sec.  416.570 to delete obsolete 
information. We are changing the regulations at Sec.  416.572 and 
adding 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 are removing 
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 are removing 
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 are removing 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. As 
revised, Sec.  416.572(b) also states that if we are already recovering 
an overpayment 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 final regulations for each program require 
that, before we impose cross-program recovery, we will 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 will 
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 will 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 can withhold the entire amount of the current 
monthly benefit.
    Following the discussion of our responses to public comments, we 
address changes that we made in Sec. Sec.  404.530(b), 408.930(b) and 
416.572(b) from the versions published in the notice of proposed 
rulemaking. See below under the heading Additional Changes.

Public Comments

    On August 24, 2004, we published proposed rules in the Federal 
Register at 69 FR 51962 and provided a 30-day period for interested 
parties to comment. We received comments from six organizations. 
Because some of the comments received are quite detailed, we have 
condensed, summarized or paraphrased them in the discussion below. We 
address all of the significant issues raised by the commenters that are 
within the scope of the proposed rules.
    Comment: Four organizations commented that the terms ``willful 
misrepresentation'' and ``concealment of material fact'' are not 
defined adequately in these regulations. They also commented that the 
actions of a recipient's spouse do not always reflect the intentions of 
the recipient and the recipient may not even be aware of his or her 
spouse's actions. Concerns were expressed that imposition of the 100 
percent withholding could adversely affect innocent spouses and that 
the 100 percent withholding would be imposed improperly or without 
appropriate development to make a determination of willful 
misrepresentation or concealment of material information.
    Response: The concepts of willful misrepresentation and concealment 
of material information for the purpose of cross-program recovery are 
not new. Since 2000, we have applied the same policy and procedures 
regarding willful misrepresentation and concealment of material 
information for cross-program recovery purposes as we apply when we 
collect SSI overpayments from monthly SSI benefits under section 
1631(b) of the

[[Page 13]]

Act and 20 CFR 416.571. The new regulations continue this practice 
under the expanded cross-program recovery authorized by section 210 of 
the SSPA. The new regulations include cross-references to the 
definition of the term ``concealment of material information'' in other 
regulations. Also, our operating instructions provide more detailed 
definitions and examples to guide SSA staff in determining whether 
willful misrepresentation or concealment of material information 
occurred.
    In order to determine a person's continuing eligibility for SSI and 
the amount payable, we need to have accurate information about his or 
her spouse's income, living arrangements and resources. If the person 
is overpaid because the spouse willfully misrepresented or concealed 
material information, we think it is our stewardship duty to apply the 
100 percent collection rule when appropriate. Our field offices have 
detailed instructions regarding the process for imposing 100 percent 
withholding due to willful misrepresentation or concealment of material 
information in connection with an overpayment. Whenever we propose to 
collect at the 100 percent rate, the person will be notified and have 
the opportunity to protest before we would take this action. We would 
take all factors into consideration before imposing 100 percent 
withholding. Moreover, an overpaid person whose spouse caused the 
overpayment may request that we waive collection, and we will grant 
waiver to a person who is without fault and satisfies the other waiver 
criteria.
    Comment: Three organizations stated that we should include in the 
notices described in Sec. Sec.  404.540, 408.932 and 416.574 the same 
information about the cause of the overpayment and the overpaid amount 
that we include in the initial notice of overpayment. They state that 
the information should be included because they feel a person cannot 
adequately identify or question an overpayment without more 
information. Two of the organizations also suggested that the notice 
advise the person that waiver can be requested at any time.
    Response: After considering the comments, we decided not to adopt 
the suggested changes regarding information about the causes and 
original amount of the overpayment. The new notice described in 
Sec. Sec.  404.540, 408.932 and 416.574 will show the balance of the 
overpayment at the time we send the notice. The initial notice of 
overpayment previously sent to the overpaid individual includes 
information such as the beginning balance of the overpayment, the cause 
of the overpayment, and the monthly amounts received compared to the 
monthly amounts that the person should have received for each month of 
the overpaid period. We include the more detailed information in 
initial notices of overpayment because those notices give overpaid 
individuals the right to request appeal of the fact or amount of the 
overpayment. To exercise that right, the overpaid individual needs to 
know specifically the overpayment amount, when the overpayment 
occurred, how the overpayment was calculated, and why the overpayment 
occurred.
    The notices described in Sec. Sec.  404.540, 408.932 and 416.574 
are sent to the overpaid individual after the individual has had the 
opportunity to appeal the initial overpayment determination. At the 
time that this additional notice is sent, the individual has either 
appealed the initial overpayment determination and received our 
decision or has chosen not to appeal and the time to appeal the 
overpayment determination has expired. Accordingly, the detailed 
information about the overpayment is not required in the new notice 
regarding cross-program recovery in order to afford the individual due 
process of law on the decision to collect the overpayment balance by 
cross-program recovery. Under the new regulation, the overpaid 
individual would have the right to have us review whether he or she 
still owes all or part of the overpayment balance. For example, the 
individual may have evidence that he or she refunded all or part of the 
balance or that we previously waived collection. We believe that the 
new notice of cross-program recovery gives sufficient information about 
the overpayment for the individual to determine whether to ask for such 
review.
    In addition, it is our long-held policy to provide the detailed 
information on the amount of the initial overpayment and the cause of 
the overpayment in the initial overpayment notice. We do not repeat 
that information with each subsequent overpayment-related notice that 
we send. In subsequent notices to overpaid individuals, we invite them 
to ask for more information if they want to know more detail. To make 
it easier for overpaid individuals to obtain additional information, we 
provide in our subsequent notices contact information, such as the 
Agency's national toll-free telephone number and the address and 
telephone number of the local office that is closest to them. We will 
include this contact information in the new notices described in 
Sec. Sec.  404.540, 408.932, and 416.574. When overpaid persons ask for 
more information, we provide them with the details contained in our 
records, including why the overpayment occurred, when it occurred, and 
how we calculated the overpayment.
    As to the suggestion that the notice advise that waiver can be 
requested at any time, the new notices described in Sec. Sec.  404.540, 
408.932 and 416.574 will advise that waiver may be requested at any 
time.
    Comment: One organization raised a concern about cross-program 
recovery of overpayments from monthly title XVI benefits, claiming that 
``[t]itle XVI beneficiaries are presumed to be unable to afford to 
repay overpayments under the law'' and ``[t]hey need only prove lack of 
fault in causing the overpayment to receive a waiver.'' The comment 
states that SSA should include this information in the notices that 
propose recovery from title XVI payments.
    Response: This comment is based on an apparent misunderstanding of 
our existing regulations. A title XVI recipient does not have to show 
only that he or she is without fault to have overpayment recovery 
waived. In addition, the individual must demonstrate that recovery 
would defeat the purpose of title XVI, be against equity and good 
conscience, or impede efficient or effective administration of the 
program. Our regulation at 20 CFR 416.553(a) states that recovery 
defeats the purpose of the SSI program ``if the individual's income and 
resources are needed for ordinary and necessary living expenses.'' This 
explanation is included in our notice language about waiver. Section 
416.553(b) explains the alternative criteria that meet the requirement 
described in Sec.  416.553(a). Nowhere does the regulation say that a 
title XVI recipient is automatically deemed to meet the criteria for 
``defeat the purpose'' of the SSI program.
    Comment: Two organizations asserted that there are problems in the 
administration of our programs that cause overpayments; specifically, 
timely processing of reports of work activity and earned income which 
potentially affect eligibility or benefit amounts.
    Response: Overpayments and underpayments of benefits occur for many 
reasons. We take our responsibility for stewardship of the programs 
that we administer very seriously, which is why we constantly track our 
payment accuracy and strive to minimize overpayments and to determine 
eligibility and process claims timely. In addition, we are pursuing 
several initiatives that address both the causes of overpayments and 
the timely processing of reports affecting

[[Page 14]]

eligibility. Regardless of the reasons for overpayments, we are 
responsible for recovering as much of the overpaid money as possible 
consistent with the law.
    Comment: One organization suggested that special language be added 
to the regulations to protect the health and welfare of individuals 
when they are receiving medical assistance in either a nursing 
facility, state institution or a home and community-based setting. They 
are concerned about the impact cross-program recovery ``will have on 
these individuals because it will reduce their countable income which 
Medicaid cannot supplement and then the provider will not receive full 
reimbursement.''
    Response: The comment is not clear regarding the impact that cross-
program recovery would have on the individuals described in the 
comment, and the organization does not specify the change(s) in the 
regulations that the organization wants. The Agency assumes that the 
organization wants special arrangements in the regulations that would 
apply while the overpaid person receives the medical assistance 
described in the comment. Such a change is not necessary because 
appropriate arrangements are already available in the rules governing 
waiver of recovery and recovering at a rate that is less than 10 
percent of the current monthly benefits. Therefore, this suggestion is 
not being implemented since a special rule is not required to cover 
this situation. The general rules for overpayment recovery take into 
consideration a person's financial circumstances.

Additional Changes

    Upon further review and consideration, we have deleted from 
Sec. Sec.  404.530(b), 408.930(b) and 416.572(b), as published on 
August 24, 2004, the provisions that would exclude certain types of 
cases from cross-program recovery. Under one of the exclusions, we 
would not apply cross-program recovery when the overpaid person is no 
longer eligible for payment under the program where the overpayment 
occurred but is refunding that overpayment voluntarily by making 
monthly installment payments. Under the other exclusion, we would not 
recover an overpayment in one program by adjusting benefits payable 
under another program when we already are adjusting those benefits to 
recover an overpayment of benefits within that program.
    As amended by section 210 of the SSPA, section 1147 of the Act 
permits us to apply cross-program recovery in both situations described 
above. By eliminating these exclusions from paragraph (b) of Sec. Sec.  
404.530, 408.930, and 416.572, we believe that we will fulfill our 
stewardship responsibilities regarding the programs more effectively. 
For example, if an individual is not eligible for SSI benefits and is 
refunding an SSI overpayment by making monthly installment payments, we 
would be able to recover the SSI overpayment balance by cross-program 
recovery against a title II past-due benefit. Cross-program recovery is 
a more efficient and reliable collection method than collection by 
installment payments. This approach is consistent with our policy under 
amended section 1147 of the Act to apply cross-program recovery in 
addition to adjusting benefits payable under the program in which the 
overpayment was made. Moreover, if an individual incurred both an SSI 
overpayment and a title II overpayment, we would be able to recover 
both the title II overpayment and the title XVI overpayment 
simultaneously from the title II benefits. For example, if we are 
collecting a title II overpayment by title II benefit adjustment and a 
large title II underpayment becomes payable, we could collect the title 
II overpayment balance from that underpayment and apply any remaining 
title II past-due benefits to the SSI overpayment.
    Because these are material changes from the proposed rule, we have 
decided to offer an additional opportunity for public comment before we 
implement them.
    In addition to the changes described above, we made a few non-
substantive clarifying revisions in Sec. Sec.  404.535(b), 408.931(b), 
and 416.573(b).

Regulatory Procedures

    Pursuant to section 702(a)(5) of the Social Security Act, 42 U.S.C. 
902(a)(5), SSA follows the Administrative Procedure Act rulemaking 
procedures specified in 5 U.S.C. 553 in the development of regulations. 
Subject to certain exceptions, 5 U.S.C. 553(d) requires that an agency 
publish a final rule at least 30 days before the rule becomes 
effective. Except for the changes in paragraph (b) of Sec. Sec.  
404.530, 408.930, and 416.572 discussed above, we find ``good cause'' 
under 5 U.S.C. 553(d)(3) for applying these regulations immediately. 
Waiting an additional 30 days would delay for no legitimate reason 
collection of overpayments made under titles II, VIII and XVI of the 
Act under the expanded authority for cross-program recovery. Such delay 
would be unnecessary and contrary to the public interest. There is a 
significant public interest in recovering those overpayments as soon as 
possible consistent with applicable law. We do not need 30 more days to 
prepare to begin implementing the expanded authority, and the 
regulations do not require any action by individuals or organizations 
to prepare for cross-program recovery.

Executive Order 12866

    The Office of Management and Budget (OMB) has reviewed these rules 
in accordance with Executive Order 12866, as amended by Executive Order 
13258. We have also determined that these rules meet the plain language 
requirement of Executive Order 12866, as amended by Executive Order 
13258.

Regulatory Flexibility Act

    We certify that these rules will 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

    The Paperwork Reduction Act of 1995 (PRA) says that no persons are 
required to respond to a collection of information unless it displays a 
valid OMB control number. In accordance with the PRA, SSA is providing 
notice that the Office of Management and Budget has approved the 
information collection requirements contained in Sec.  408.932(c), (d) 
and (e) of these final rules. The OMB control number for this 
collection is 0960-0692, expiring 11/30/2007.

(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;

[[Page 15]]

Reporting and recordkeeping requirements, Supplemental Security Income 
(SSI).

    Dated: November 24, 2004.
Jo Anne B. Barnhart,
Commissioner of Social Security.

0
For the reasons set out in the preamble, we are amending 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]

0
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.


0
2. Sections 404.530, 404.535, 404.540 and 404.545 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 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? 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.


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 benefits 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]

0
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)(5), 1008, and 1320b-17); 31 U.S.C. 3720A.

0
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? We may use cross-program recovery to collect a title VIII

[[Page 16]]

overpayment you owe when benefits are payable to you under title II, 
title XVI, or both.

0
5. Section 408.931 is revised to read as follows:


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 benefits 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.)

0
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.

0
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]

0
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.

0
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.

0
10. Section 416.572 is revised and sections 416.573, 416.574 and 
416.575 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? We may use cross-program recovery to collect a title XVI

[[Page 17]]

overpayment you owe when benefits are payable to you under title II, 
title VIII, or both.


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 payments (as described in Sec.  
416.571) without including your title II benefits 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. 04-28693 Filed 12-30-04; 8:45 am]
BILLING CODE 4191-02-P