Additional Methods for Recovery of Title II Benefit Overpayments, § 404.527

The Social Security Administration (SSA) is responsible for administering Title II benefits under the Social Security Act.

Occasionally, individuals may receive overpayments, which the SSA then attempts to recover using various methods. This blog post aims to explain the additional methods for recovery of Title II benefit overpayments outlined in § 404.527, and the conditions under which these methods apply.

Section 1: General Conditions for Additional Recovery Methods

In addition to the methods specified in §§ 404.502 and 404.520, Title II overpayments are subject to recovery under the rules in subparts D and E of part 422 of the Social Security Act. However, these additional recovery methods only apply if the following conditions are met:

1. The overpayment occurred after the individual turned 18 years old.
2. The overpaid individual is no longer entitled to benefits under Title II.
3. The overpayment is otherwise unrecoverable under section 204 of the Social Security Act, as determined by the SSA.

Section 2: When an Overpayment is Considered Otherwise Unrecoverable

An overpayment is considered otherwise unrecoverable if all the following conditions are met:

1. The SSA’s billing system sequence has been completed (i.e., the individual has received an initial notice of overpayment, a reminder notice, and a past-due notice), or collection activity has been suspended or terminated according to the Federal Claims Collection Standards.
2. The SSA has not entered into an installment payment arrangement with the overpaid individual, or if they have, the individual has failed to make any payment for two consecutive months.
3. The overpaid individual has not requested a waiver or, after a review, the SSA has determined not to waive collection of the overpayment.
4. The overpaid individual has not requested reconsideration of the initial overpayment determination or, after a review, the SSA has affirmed the initial overpayment determination.
5. The overpayment cannot be recovered by adjusting benefits payable to any individual other than the overpaid individual. For this condition, an overpayment is considered unrecoverable from any individual who lived in a separate household from the overpaid person at the time of the overpayment and did not receive the overpayment.

Example: Jane’s Overpayment Recovery Case

Jane, a 45-year-old single mother, had been receiving Title II Social Security disability benefits due to a severe medical condition. In May 2023, Jane returned to work, and her condition improved significantly, rendering her no longer eligible for disability benefits. However, due to a processing error, she continued to receive disability payments for three months after her eligibility ended, resulting in an overpayment of $3,000.

The Social Security Administration (SSA) identified the overpayment and sent Jane an initial notice, followed by a reminder notice and a past-due notice. Despite the notices, Jane did not repay the overpayment or respond to the SSA’s attempts to establish a repayment plan.

Jane also did not request a waiver or reconsideration of the overpayment determination. Since she was no longer entitled to Title II benefits and the overpayment occurred after she turned 18, the SSA decided to explore additional methods for recovering the overpayment, as outlined in § 404.527.

As Jane met all the conditions for an overpayment being considered otherwise unrecoverable, the SSA proceeded with the additional recovery methods under subparts D and E of part 422. This may include actions such as referring Jane’s debt to the Department of the Treasury for offset against any federal payment, like her tax refund, or reporting her debt to credit bureaus.

In this example, the SSA utilized the additional methods for recovery of Title II benefit overpayments because Jane met all the necessary conditions. By following these guidelines, the SSA aims to recover overpayments and maintain the integrity of the Social Security system.

Conclusion: Understanding the additional methods for recovery of Title II benefit overpayments and the conditions under which they apply is crucial for both the SSA and the individuals receiving benefits. By adhering to these regulations, the SSA ensures the proper management of funds and maintains the integrity of the Social Security system.

https://www.ssa.gov/OP_Home/cfr20/404/404-0527.htm