[Federal Register Volume 70, Number 60 (Wednesday, March 30, 2005)]
[Rules and Regulations]
[Pages 16111-16113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-6204]


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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.

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SUMMARY: We are adopting without change the final rules that were 
published in the Federal Register on January 3, 2005, at 70 FR 11, 
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. The revised rules expand the authority 
for cross-program recovery of overpayments made in our various 
programs. We are implementing a portion of those rules that we did not 
implement on January 3, 2005, pending consideration of public comments 
that we requested at that time.

DATES: Most of these rules were effective January 3, 2005. Some 
provisions were changed from the version published earlier with a 
notice of proposed rulemaking (NPRM) and were not implemented on 
January 3. We are implementing those changes effective March 30, 2005.

Electronic Version

    The electronic file of this document is available on the date of 
publication in the Federal Register at http://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 1-800-966-5609, for information about this 
notice. 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

    On August 24, 2004, at 69 FR 51962, we published an NPRM in which 
we proposed to expand 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. After 
considering the public comments we received on the NPRM, we published 
the final rules with request for comment on January 3, 2005, at 70 FR 
11, expanding our cross-program recovery authority effective January 3, 
2005. As stated in those final rules with request for comment, although 
most of the amendments to the regulations were effective upon 
publication, we solicited additional public comments on material 
changes from the NPRM version in some provisions (i.e., the removal of 
provisions excluding certain types of cases from cross-program 
recovery). We stated that we would not implement these changes until 
after we considered any comments we received during the 30-day public 
comment period.

Final Rules With Request for Comment

    In the final rules with request for comment published January 3, 
2005, we changed the regulations in 20 CFR parts 404, 408 and 416 to 
reflect the expanded cross-program recovery authority granted by 
section 1147 of the Act (42 U.S.C. 1320b-17), as amended by section 210 
of the Social Security Protection Act of 2004 (SSPA), Public Law 108-
203.
    Previously, part 404 had no provisions permitting cross-program 
recovery, since that option had not been applied to collect title II 
benefit overpayments. In part 404, we added 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 changed 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 changed the regulations at Sec.  416.570 to delete obsolete 
information. We changed the regulations at Sec.  416.572 and added 
Sec. Sec.  416.573, .574 and .575 to reflect the expanded authority to

[[Page 16112]]

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 removed 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 removed the title 
VIII example from Sec.  416.572 because we added a cross-reference to 
the title VIII regulations that explain how title VIII benefits are 
computed.
    We removed 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.
    As we mentioned above, the final rules with request for comment 
contained material changes from the NPRM published on August 24, 2004. 
We deleted from Sec. Sec.  404.530(b), 408.930(b) and 416.572(b) the 
provisions that excluded certain types of cases from cross-program 
recovery. Under one of the exclusions, we would not have applied cross-
program recovery when the overpaid person was no longer eligible for 
payment under the program where the overpayment occurred but was 
refunding that overpayment voluntarily by making monthly installment 
payments. Under the other exclusion, we would not have recovered an 
overpayment in one program by adjusting benefits payable under another 
program when we were already 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. 
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 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 SSI 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.

Public Comments

    The final rules with request for comment that were published on 
January 3, 2005, provided the public with a 30-day comment period. We 
received one comment.
    Comment: The commenter expressed concerns about the repayment 
ability of title II and SSI beneficiaries, since many have no other 
income and would not be able to meet their living expenses if cross-
program recovery is implemented as planned.
    Response: There are procedures in place to accommodate individuals 
who cannot afford to repay an overpayment by cross-program recovery at 
the proposed rate. Our new regulations at 20 CFR 404.540, 408.932 and 
416.574 state that the written notice of our intention to apply cross-
program recovery will advise that the beneficiary may request a 
different rate of withholding from the amount proposed. If a lower rate 
is requested, a rate of withholding that is appropriate to the 
financial condition of the overpaid individual will be set after an 
evaluation of all the pertinent facts. See 20 CFR 404.508, 404.535(c), 
408.923, 408.931(c), 416.571 and 416.573(c). However, we will not 
withhold at a lower rate if the individual willfully misrepresented or 
concealed material information in connection with the overpayment. See 
20 CFR 404.535(d), 408.931(d), and 461.573(d).

Regulatory Procedures

Executive Order 12866, as Amended by Executive Order 13258

    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 they affect 
individuals only. 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 OMB has

[[Page 16113]]

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

    Dated: March 9, 2005.
Jo Anne B. Barnhart,
Commissioner of Social Security.

0
Accordingly, the final rules amending 20 CFR parts 404, 408 and 416 
that were published at 70 FR 11 on January 3, 2005, are adopted as 
final rules without change.

[FR Doc. 05-6204 Filed 3-29-05; 8:45 am]
BILLING CODE 4191-02-P