When there is a recoverable overpayment to any person on a record (i.e., we have not
waived recovery from the person(s) primarily liable for the overpayment), we must
withhold the LSDP. We do not pay an LSDP in overpayment cases unless we waive recovery
of the overpayment to the deceased overpaid person (or contingently liable person)
or the overpayment amount is less than the LSDP amount. For more information on the
rules for paying the LSDP, see SM 00805.035B.1. and RS 00210.020.
If we erroneously paid the LSDP when we should have used all or part of that payment
to recover an overpayment, the LSDP, up to the outstanding overpaid amount, is now
a separate overpayment. The erroneous LSDP is subject to normal recovery and waiver
Example: There is an overpayment balance due on the deceased’s record for $75. We paid the
$255 LSDP to the surviving child. The surviving child who we erroneously paid the
LSDP is now overpaid $75. If we waive recovery of the LSDP overpayment, the total
outstanding overpayment (the original $75) remains collectable from the estate.
NOTE: If the person(s) who received the LSDP is receiving survivor benefits on the same
earnings record as the overpaid person, do not make a separate determination of an
LSDP overpayment. In these cases, the original overpayment is subject to recovery
from other person(s) entitled on the same earnings record. The receipt of the LSDP
in this case is a non-issue and not subject to the overpayment recovery process.