An initial notice of overpayment should generally propose withholding 10% of the monthly benefit amount (excluding SMI premiums) as an alternative to full refund.

Proposing 10% monthly benefit withholding in the initial notice applies even if partial withholding (or repayment by installments) is in effect for a prior overpayment. In such case, propose withholding 10% of the monthly benefit amount for the total outstanding amount (new overpayment plus prior one). If eligibility to benefits is reestablished and there is a prior overpayment for which waiver (including personal conference) rights were offered, 10% benefit withholding is appropriate regardless of any existing repayment schedule.

When we use benefit withholding against a dually entitled beneficiary who is contingently liable for an overpayment, we will apply the 10% monthly benefit withholding based on the amount of the payment they receive on the record where the overpayment occurred.

Example 1:Nina Pauling is dually-entitled to a retirement benefit of $260.30 and a surviving spouse's benefit of $120.50. They currently receives $348.00 (MPA) after deduction for the $31.90 SMI premium. Their spouse had been overpaid $2,000 before they died, and an overpayment of $1,745 is still outstanding on this record. Since Nina's liability is limited to the benefit they receive on the overpayment record (GN 02205.001), a withholding of 10% of their monthly surviving spouse's benefit is proposed in the initial overpayment notice. Their reduced monthly benefit payment would be $368.

Example 2:Susan Venture, a current D beneficiary ineligible for payment because of their earnings, has an outstanding debt of $1,500. Susan requested waiver of recovery and following a personal conference decision to deny the waiver, they agreed to repay the debt in $50 monthly installments. Billing was initiated in 8/87. Susan reports that they are no longer working and D benefits are payable effective 1/89. Withhold 10% of the monthly benefit due beginning 1/89 to recover the debt balance of $650.00 ($1,500 minus the $850 8/87- 12/88 installment payments).