When an overpaid person is convicted of fraud, the court usually determines an amount
which must be repaid to SSA as part of the sentence (i.e., court-ordered restitution).
This amount may be less than the total overpayment made to the person; it may include
a penalty or fine; or it may include the benefits overpaid to any auxiliary on the
same earnings record whose overpayment was caused by the convicted individual's action(s).
Or, the court may not order any restitution.
If the court addresses repayment of only the convicted person's debt and does not
order restitution, or specifies a figure less than the full amount of the overpayment,
the convicted person's liability is limited to the incorrect benefits he or she received
(as determined by SSA) plus any received as a representative payee. Fraud conviction
overpayment and recovery policies apply.
If the court orders the convicted person to repay not only his or her own overpayment,
but also that of any auxiliary who was overpaid as a result of the convicted person's
action, we must first attempt recovery from the auxiliaries. If recovery from the
auxiliaries is waived, we will seek recovery from the convicted person.
SSA is not authorized to seek restitution of fines or penalties imposed by the court.
In overpayment or follow-up notices to the convicted person, request only the amount
of the overpayment.
Consistent with section 207 of the Social Security Act, SSA cannot withhold under
sections 204 (and 1631(b)) more than the overpayment amount from benefits payable
to an individual. However, SSA may retain any restitution that the individual pays
to the court and the court (or the Financial Litigation Unit (FLU)) of the U.S. Attorney’s
office sends to SSA, so long as the amount retained does not exceed the total amount
of the restitution ordered by the court. If more than the amount of the overpayment
is refunded because the court ordered restitution of an amount greater than the overpayment
(e.g., a fine), credit the excess to the trust fund on which the overpayment occurred
(for instructions for crediting the trust funds, see HI 01015.040).
Return to the individual any amount that SSA receives in excess of the total restitution ordered by the court.