Any part of a Title II benefit needed to repay SMI premiums will be applied to the premium obligation (including any arrearage) before any withholding to recover an overpayment.

This partial adjustment for SMI is effectuated without the need for a protest from the beneficiary or a decision that the 10% monthly benefit withholding is causing hardship.

If an overpayment is being recovered by 10% monthly benefit withholding when SMI premium liability begins, the premium amount will be deducted first and the balance of the monthly benefit credited toward the overpayment.

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  Mae Fields has been overpaid benefits for 10 months at the rate of $100 per month. Their SMI premium is being deducted from their benefit each month. Mae's $1000 overpayment will be recovered by withholding 10% of their monthly benefit amount minus the SMI premium.

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  In 04/88, Alex Able's annual report shows that they were overpaid for 1987 but their benefits have been suspended for work from 01/88 on. Alex's SMI premiums for 1986 were deducted from their monthly benefit. In 08/88, they notified SSA that they stopped working late in that month and they are eligible to receive benefits beginning 09/88 (payment due 10/3/88). However, they owe premiums for the 3 month period 07/88 through 09/88 and an additional amount must be deducted for 10/88. Accordingly, Alex's benefit for 09/88 will be reduced by SMI premiums due for 4 months and the remaining benefit applied to the overpayment.