Technical Revisions to Overpayment Rules, 40997-40999 [E8-16330]

Agencies

• Social Security Administration

[Federal Register Volume 73, Number 138 (Thursday, July 17, 2008)]
[Proposed Rules]
[Pages 40997-40999]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-16330]


=======================================================================
-----------------------------------------------------------------------

SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

[Docket No. SSA-2007-0093]
RIN 0960-AG02


 Technical Revisions to Overpayment Rules

AGENCY: Social Security Administration.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: These proposed rules would amend our title II regulations to 
explicitly provide that we apply an underpayment due an individual to 
reduce an overpayment to that individual in certain cases. Our title 
XVI regulations already state this policy. Additionally, these proposed 
rules reflect our procedures for collecting overpayments when a payment 
of more than the correct amount is made to a representative payee on 
behalf of a beneficiary after the beneficiary's death. These proposed 
rules would clarify that we would collect overpayments in this 
situation from only the representative payee or his estate but would 
not collect these overpayments from the representative payee's spouse 
or from the spouse's estate.

DATES: To be sure that your comments are considered, we must receive 
them no later than September 15, 2008.

ADDRESSES: You may submit comments by any one of four methods--
Internet, facsimile, regular mail, or hand-delivery. Commenters should 
not submit the same comments multiple times or by more than one method. 
Regardless of which of the following methods you choose, please state 
that your comments refer to Docket No. SSA-2007-0093 to ensure that we 
can associate your comments with the correct regulation:
    1. Federal eRulemaking portal at https://www.regulations.gov. (This 
is the most expedient method for submitting your comments, and we 
strongly urge you to use it.) In the ``Comment or Submission'' section 
of the Web page, type ``SSA-2007-0093'', select ``Go,'' and then click 
``Send a Comment or Submission.'' The Federal eRulemaking portal issues 
you a tracking number when you submit a comment.
    2. Telefax to (410) 966-2830.
    3. Letter to the Commissioner of Social Security, P.O. Box 17703, 
Baltimore, MD 21235-7703.
    4. Deliver your comments to the Office of Regulations, Social 
Security Administration, 922 Altmeyer Building, 6401 Security 
Boulevard, Baltimore, Maryland 21235-6401, between 8 a.m. and 4:30 p.m. 
on regular business days.
    All comments are posted on the Federal eRulemaking portal, although 
they may not appear for several days after receipt of the comment. You 
may also inspect the comments on regular business days by making 
arrangements with the contact person shown in this preamble.
    Caution: All comments we receive from members of the public are 
available for public viewing on the Federal eRulemaking portal at 
https://www.regulations.gov. Therefore, you should be careful to include 
in your comments only information that you wish to make publicly 
available on the Internet. We strongly urge you not to include any 
personal information, such as your Social Security number or medical 
information, in your comments.

FOR FURTHER INFORMATION CONTACT: Joshua Silverman, Office of 
Regulations, Social Security Administration, 6401 Security Boulevard, 
Baltimore, MD 21235-6401, (410) 594-2128, for information about these 
rules. For information on eligibility or filing for benefits, call our 
national toll-free

[[Page 40998]]

number, 1-800-772-1213 or TTY 1-800-325-0778, or visit our Internet 
site, Social Security Online, at https://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Electronic Version

    The electronic file of this document is available on the date of 
publication in the Federal Register at https://www.gpoaccess.gov/fr/
index.html.

Explanation of Changes

Reducing Overpayments

    We can apply underpayments to reduce overpayments. 42 U.S.C. 
404(a)(1)(A) and 1383(b)(1)(A). Our current title XVI regulations 
explicitly provide that we ``apply any underpayment due an individual 
to reduce any overpayment to that individual that we determine to exist 
* * * for a different period, unless we have waived recovery of the 
overpayment * * *.'' 20 CFR 416.543. However, there is no parallel 
section in our current title II regulations. We propose to modify our 
regulations to reflect our current process of applying underpayments to 
reduce overpayments under title II.
    We propose to amend 20 CFR 404.503 to state that we will apply any 
underpayment due an individual to reduce any overpayment owed by that 
individual that we determine to exist for a different period, unless we 
waive recovery. In cases when the underpaid individual has died, we 
will make the adjustment before distributing any underpayment according 
to the priority list in 20 CFR 404.503(b).

Overpayments Made to Representative Payees

    Under title II, we currently collect overpayments from an overpaid 
beneficiary, from any other beneficiary entitled to benefits based an 
overpaid beneficiary's earnings, or from the estate of a deceased 
overpaid individual. 20 CFR 404.502. Under title XVI, we may collect 
overpayments from the overpaid recipient, his eligible spouse, or the 
recipient's or eligible spouse's estate if one of them dies before we 
finish collecting the overpayment. 20 CFR 416.570.
    When a representative payee receives benefits on behalf of a 
beneficiary, we generally collect any overpayment using these same 
procedures. However, when a representative payee receives benefits 
intended for a beneficiary after the beneficiary has died, the 
representative payee is liable for repaying the overpayment. 42 U.S.C. 
Sec. Sec.  404(a)(2) and 1383(b)(2). While these amendments became 
effective on December 14, 2000, we are now proposing to update our 
regulations to reflect these statutory changes.
    These proposed rules would clarify that we collect these 
overpayments solely from the representative payee's benefits and his 
estate. We do not collect from the benefits of the representative 
payee's spouse, the estate of the spouse, the auxiliaries of the 
overpaid representative payee, or the deceased beneficiary's estate. We 
would continue to use all other means for collecting such overpayments 
allowed by federal law, including cross-program recovery, 
administrative offset, tax refund offset, administrative wage 
garnishment, and federal salary offset. See 20 CFR 404.520, 404.527, 
404.530, 416.572, 416.580, 416.590, 422.310, and 422.403.
    For title II, we propose to add a new paragraph, 404.502(a)(3), 
which would state that we apply the procedures found in paragraph 
404.502(a)(1) to recover an overpayment made to a representative payee 
after the death of a beneficiary. In this situation, we will not 
recover these overpayments from any other individual entitled to 
benefits based on the beneficiary's earnings because only the 
representative payee or his estate is liable for repayment. We also 
propose to add paragraph 404.502(b)(5) to state that, if an overpaid 
representative payee dies before we recover the full amount of the 
overpayment, we would collect the overpayment from the representative 
payee's estate, but we would not adjust the benefits based on the 
representative payee's record owed to the representative payee's spouse 
or children.
    For title XVI, we propose to redesignate the existing language in 
416.570 as paragraph (a) and to add a new paragraph (b). This new 
paragraph would provide that some of the procedures in paragraph (a) 
would apply to recover overpayments from a representative payee or his 
estate. We would clarify that we would not adjust benefits owed to the 
representative payee's eligible spouse or the eligible spouse's estate 
because only the representative payee is liable.

Regulatory Procedures

Clarity of These Proposed Rules

    Executive Order (E.O.) 12866, as amended, requires each agency to 
write all rules in plain language. In addition to your substantive 
comments on these final 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, as Amended

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

Regulatory Flexibility Act

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

Paperwork Reduction Act

    This rule will impose no additional reporting or recordkeeping 
requirements requiring OMB clearance.

(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)

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 416

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

    Dated: July 10, 2008.
Michael J. Astrue,
Commissioner of Social Security.

    For the reasons set forth in the preamble, we are proposing to 
amend subpart F of part 404 and subpart E of Part 416 of chapter III of 
title 20 of the

[[Page 40999]]

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 continues 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. Amend Sec.  404.502 by adding paragraphs (a)(3) and (b)(5) to 
read as follows:


Sec.  404.502  Overpayments.

* * * * *
    (a) * * *
    (3) If a representative payee receives a payment on behalf of a 
beneficiary after that beneficiary dies, the representative payee or 
his estate is solely liable for repaying the overpayment. If the 
representative payee is entitled to a monthly benefit or a lump sum 
under title II of the Act at the time we determine that an overpayment 
exists or at any time thereafter, except as provided in paragraphs (c) 
and (d) of this section, we will not pay the monthly benefits or the 
lump sum to the representative payee until the amount of the 
overpayment has been repaid. We will make such adjustments against any 
monthly benefit or lump sum under title II of the Act to which the 
representative payee is entitled whether payable on the basis of such 
representative payee's earnings or the earnings of another individual.
    (b) * * *
    (5) The methods in paragraphs (b)(1) and (b)(2) of this section for 
overpayments owed by a representative payee for payments made after the 
beneficiary's death. We will not recover such overpayments from any 
person other than the individual who was representative payee or his 
estate, but may be recovered from such other person under Sec.  
404.503(b).
* * * * *
    3. Amend Sec.  404.503 by adding a second sentence to paragraph (a) 
and revising paragraph (b) to read as follows:


Sec.  404.503   Underpayments.

* * * * *
    (a) Individual underpaid is living. * * * However, if we determine 
that the individual to whom an underpayment is due also received an 
overpayment as defined in Sec.  404.501(a) for a different period, we 
will apply any underpayment due the individual to reduce that 
overpayment, unless we have waived recovery of the overpayment under 
the provisions of Sec. Sec.  404.506 through 404.512.
    (b) Individual dies before adjustment of underpayment. If an 
individual who has been underpaid dies before receiving payment or 
negotiating a check or checks representing such payment, we first apply 
any amounts due the deceased individual against any overpayments as 
defined in Sec.  404.501(a) owed by the deceased individual, unless we 
have waived recovery of such overpayment under the provisions of 
Sec. Sec.  404.506 through 404.512. We then will distribute any 
remaining underpayment to the living person (or persons) in the highest 
order of priority as follows:
* * * * *

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

Subpart E--[Amended]

    4. 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.

    5. Amend Sec.  416.570 by revising the section heading, 
redesignating the existing text as paragraph (a), adding a heading to 
redesignated paragraph (a), and adding new paragraph (b) to read as 
follows:


Sec.  416.570  Adjustment.

    (a) General. * * *
    (b) Overpayment made to representative payee after the 
beneficiary's death. A representative payee or his estate is solely 
liable for repaying an overpayment made to the representative payee on 
behalf of a recipient after the recipient's death. In such case, we 
will recover the overpayment according to paragraph (a) of this 
section, except that:
    (1) We will not adjust any other payment due to the eligible spouse 
of the overpaid representative payee to recover the overpayment, and
    (2) If the overpaid representative payee dies before we complete 
adjustment, we will not seek to recover the overpayment from the 
eligible spouse or his estate.

 [FR Doc. E8-16330 Filed 7-16-08; 8:45 am]
BILLING CODE 4191-02-P