Technical Revisions to Overpayment Rules, 65541-65543 [E8-26224]

Agencies

• Social Security Administration

[Federal Register Volume 73, Number 214 (Tuesday, November 4, 2008)]
[Rules and Regulations]
[Pages 65541-65543]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-26224]


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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: Final rules.

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SUMMARY: These rules 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 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 rules 
clarify that we collect overpayments in this situation from only the 
representative payee or his estate but not from the representative 
payee's spouse or from the spouse's estate.

DATES: These rules are effective December 4, 2008.

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 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 are modifying our 
regulations to reflect our current process of applying underpayments to 
reduce overpayments under title II.
    We are amending 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

[[Page 65542]]

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. 
404(a)(2) and 1383(b)(2). We are updating our regulations to reflect 
these statutory changes that became effective on December 14, 2000.
    These rules clarify that we collect these overpayments solely from 
the representative payee 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 will continue to use all means for 
collecting such overpayments allowed by federal law, including 
adjustment of benefits or lump sums, 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 are adding a new paragraph, 20 CFR 404.502(a)(3), 
which states that we apply the procedures found in paragraph 20 CFR 
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 are 
adding paragraph 20 CFR 404.502(b)(5) to state that, if an overpaid 
representative payee dies before we recover the full amount of the 
overpayment, we will collect the overpayment from the representative 
payee's estate, but we will not adjust the benefits based on the 
representative payee's record owed to the representative payee's spouse 
or children.
    For title XVI, we are redesignating the existing language in 20 CFR 
416.570 as paragraph (a) and are adding a new paragraph (b). This new 
paragraph provides that some of the procedures in paragraph (a) will 
apply to recover overpayments from a representative payee or his 
estate. We are clarifying that we will not adjust benefits owed to the 
representative payee's eligible spouse or the eligible spouse's estate 
because only the representative payee is liable.

Public Comments

    In the notice of proposed rulemaking we published at 73 FR 40997 
(July 17, 2008), we provided the public with a 60-day period in which 
to comment on the proposed changes. That comment period ended on 
September 15, 2008. We did not receive any comments.

Corrections

    We are making three minor corrections. First, we have corrected the 
last sentence in 20 CFR 404.502(b)(5) because words were 
unintentionally omitted from the proposed rules. The revised sentence 
clarifies that we do not collect the overpayments at issue under 20 CFR 
404.502(b)(3) from anyone other than the representative payee, but we 
may use any underpayment due to the representative payee to reduce an 
outstanding overpayment. We also corrected the title of 20 CFR 
416.570(b) to use the term ``recipient'' instead of ``beneficiary'' for 
consistency with our rules. Finally, we have amended the language in 20 
CFR 416.570(b)(2) to make clear that we will not collect these 
overpayments from the eligible spouse or the eligible spouse's estate.

Regulatory Procedures

Executive Order 12866, as Amended

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these final 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 final 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: October 23, 2008.
Michael J. Astrue,
Commissioner of Social Security.

0
For the reasons set forth in the preamble, we are amending subpart F of 
part 404 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 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.


0
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 we may recover these overpayments

[[Page 65543]]

from such other person under Sec.  404.503(b).
* * * * *

0
3. Amend Sec.  404.503 by adding a second sentence to paragraph (a) and 
revising paragraph (b) introductory text 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]

0
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.


0
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 recipient'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 the estate of the eligible spouse.

 [FR Doc. E8-26224 Filed 11-3-08; 8:45 am]
BILLING CODE 4191-02-P