TN 35 (10-17)
GN 02201.003 Determining a Title II Overpayment Amount
A. Overpayment amount and time frame
The overpayment amount is the difference between the amount we paid and the amount we should have paid to a beneficiary. This includes the lump sum death payment (LSDP). For more information regarding the LSDP, see RS 00210.010.
The overpayment period begins with the first month for which there is a difference between what was paid and what was payable. The overpayment period generally ends with the month before the current operating month (COM). This period is also known as the retroactive period.
The retroactive period is not limited to a single month or a single year. For example, a retroactive period can cover March 2009 through December 2012 (i.e. multiple months/years). We must take into account all payments we issued for months in the retroactive period and all amounts due for months in that period to determine if an individual is overpaid as well as determine the overpayment amount.
In order to determine what we actually paid, look at the individual’s Payment History Update System (PHUS) record. Keep in mind, the PHUS record was not available until 1984 and continuing. For cases prior to 1984, you might have to use the Master Beneficiary Record (MBR) history or paper output. For additional information about the PHUS record, see SM 00545.000.
In some situations, we withhold a Title II benefit payment to recover a prior Title II overpayment, and the amount we withheld turns out not to be due the individual. In this case, although the actions taken may establish a new ROAR record, the prior overpayment remains outstanding. There are also situations when we withhold a Title II benefit payment to recover a Title XVI overpayment via Cross Program Recovery, and the amount we withheld turns out not to be due the individual. In this case, the amount used to reduce or recover the Title XVI overpayment is now a Title II overpayment.
EXAMPLE: In May 2015, we are recovering Sharon’s $2,000 overpayment by withholding her entire $100 monthly payment. In September 2015, we retroactively suspended Sharon’s benefits effective May 2015. Because we were withholding Sharon’s monthly benefit payment to recover her overpayment, we would not create a new overpayment. Instead, the $2,000 overpayment remains outstanding.
B. Amount due to another individual on the same earnings record
The overpayment amount is the difference between the amounts paid and the benefits actually due (including the LSDP) for a given retroactive period. We do not withhold one individual’s underpayment to reduce or recover another individual’s overpayment on the same record unless:
We are unable to recover an overpayment from an individual on the same record (see GN 02210.007), or
One individual’s retroactive suspension, termination, or entitlement causes an overpayment or underpayment to other individuals on the same record and in the same household (see GN 02201.003C in this section).
C. Retroactive suspension, termination, or entitlement causes an overpayment(s) in the same household
When we retroactively terminate or entitle someone, we might have to adjust the benefit rates for everyone else receiving benefits on the same record. For individuals living in the same household, the overpayment is the difference between the total amount we paid to the individuals in the same household and the total amount payable to the individuals in the same household.
If we paid the correct family benefits and no one submitted a protest to the withholding of any retroactive benefits, there is no overpayment.
NOTE: If there is a resulting overpayment caused by dollar down rounding, see GN 02250.330 for proper handling.
If the amount we paid to the household exceeds the amount payable or someone protests our withholding of retroactive benefits, follow normal overpayment recovery action against the overpaid individual(s) and release the underpayment we had withheld from the individual who protested.
EXAMPLE: In July 2009, Lola and Felix are receiving child’s benefits on their father, James’, record. James has another child, Oliver, who was born in April 2009 and becomes retroactively entitled to benefits on James’ record effective May 2009. All of these individuals are living in the same household. Because of Oliver’s entitlement, we must adjust Lola and Felix’s benefit amount beginning May 2009. We overpaid Lola and Felix for May 2009 through June 2009, while we underpaid Oliver for the same period. Because they are in the same household, we will use Oliver’s underpayment to recover Lola and Felix’s overpayment.
D. Retroactive entitlement causes an overpayment for those individuals in a different household
When we retroactively entitle someone on the same record and he or she lives in a different household, we might have to adjust the benefit rates for everyone receiving benefits on the same record. For individuals living in a different household from the late-filing beneficiary, we apply normal overpayment recovery action against the individuals who were already receiving benefits. For information regarding when 202(j)(1) applies, see RS 00615.760.
EXAMPLE: In July 2009, Lola and Felix are receiving child’s benefits on their father, James’, record. James has another child, Oliver, who was born in April 2009, lives in a different household, and becomes retroactively entitled to benefits on James’ record effective May 2009. Because of Oliver’s entitlement, we must adjust Lola and Felix’s benefit amount beginning May 2009. We overpaid Lola and Felix for May 2009 through June 2009 while we underpaid Oliver for the same period. Because Oliver lives in a different household, we will release the underpayment to Oliver and not use his underpayment to recover Lola and Felix’s overpayment. We will post the overpayment to Lola and Felix and follow normal overpayment procedures.
E. Calculating the overpayment
In general, when you have to calculate the overpayment amount manually, look at what we paid the individual for a given period based on the Payment History Update System (PHUS) record if applicable or a prior Master Beneficiary Record (MBR) if this is a pre-PHUS case. In addition, include certain deductions as a “paid” amount (e.g. attorney fee, garnishment, Medicare premiums, windfall offset, monies withheld to recover a prior overpayment, etc.). We include these items as monies paid to the individual because we are paying someone else on his or her behalf.
Below is a list of paid event codes to look for on the individual’s PHUS record:
010 DUP CHECK,
042 PMA CHK,
049 LEGAL DED,
146 GARNISH, etc.
For additional PHUS paid event codes, see SM 00630.145, SM 00630.346, and SM 00630.249.
NOTE: Based on special situations (e.g. fraud cases), we might not include Medicare premiums or other specific paid events in the overpayment calculation as we normally do. Therefore, follow the applicable special case instructions.
Compare what we paid the individual to what we should have paid the individual and the excess amount paid is the overpayment amount. Take into account any returned checks or refunds. In general, you compute paid vs. payable beginning with the point of change. There will be instances where you might have to compute paid vs. payable beginning with the individual’s date of entitlement (DOE).
NOTE: For information about processing amended awards and windfall offset that involve an overpayment, see SM 00815.200.
F. Documenting the overpayment
When you are taking a manual action and making an overpayment determination, you must document all the facts and provide the rationale for your overpayment determination. This determination must clearly reflect the following facts:
How the overpayment occurred,
The overpayment period, and
The amount of the overpayment.
You may document your overpayment determination by creating a paid vs. payable chart, annotating the Remarks screen in the Debt Management System (DMS), etc. Documentation also includes any documents regarding why you are updating the individual’s record that caused the overpayment. For example, student forms, wage reports, proof of workers’ compensation payment(s), etc.
Fax all documentation used to determine the overpayment amount (including paid vs payable charts, SSA-795, etc.) into the electronic folder, paperless, or the Non-Disability Repository for Evidentiary Documents (NDRed) as evidence of your overpayment determination as applicable. Retain these documents for the life of the overpayment. In addition, you may use the following records, documents, or systems to assist with making an overpayment determination:
Paid vs. payable charts;
Information from the individual’s paper or electronic folder;
Remarks on the Debt Management System (DMS);
Overpayment Wizard (OPWIZ) on the personal communications, Office of Quality Assurance (PCOM OQA) toolbar;
SSA-5002, Report of Contact;
Master Beneficiary Record (MBR);
Recovery of Overpayments Accounting and Reporting (ROAR);
Payment History Update System (PHUS);
Payment history and worksheets;
Paperless or Paperless Read Only Query System (PPL ROQS)
Claims Folder Records Management System (CFRMS); or
Any other available evidentiary queries.
G. Posting the overpayment
Once you have determined that we overpaid the individual, post the overpayment to his or her record with a due process recovery date (DPRD) of current operating month (COM) plus 2 months; or if the overpaid individual is living outside of the United States, use COM plus 3 months. You have two options for posting an overpayment manually to the individual’s record. You may use the Manual Adjustment, Credit, and Award Data Entry (MACADE) system or DMS. For more information about posting an overpayment via MACADE, see SM 00865.000. For more information about posting an overpayment via DMS, see MS DMS 002.003.
Once you post the overpayment, you must notify the individual, in writing, by sending an overpayment notice. For information about the overpayment notice, see GN 02201.009.
SM 00610.700 Determining the Amount of the Overpayment
SM 00865.010 Processing Overpayments (Not LDOs) and Underpayments
SM 00865.015 - Processing Overpayment (LDOs) and Underpayments
SM 00865.020 How MADCAP Establishes O/U PAY Data