TN 19 (09-97)

GN 02210.003 10-year bar to adjustment - overpayment

Citations:

HHS

Regulation, 45 C.F.R., Section 30.12(a)(4)

A. Policy

1. When adjustment is barred

Effective with adjustment actions taken 10/87 or later, recovery by adjustment is barred more than 10 years after a debt accrueswhen the means to collect by benefit withholding was available but no recovery efforts were initiated.

The means to collect by benefit withholding applies to the debtor (on any earnings record) orto any other person receiving benefits on the earnings record on which the overpayment occurred.

The bar applies to the debtnot the debtor. Barring recovery of one debt under the 10-year rule does not relieve the debtor of other debts.

2. When a debt accrues

A debt accrues with the laterof the following events:

  • An initial overpayment determination is made; or

  • It is affirmed by an administrative appeal proceeding (i.e., reconsideration, hearing, and/or review by the Appeals Council); or

  • It is affirmed by a court having jurisdiction; or

  • Adjustment was the method of recovery but is no longer available; or

  • A debtor defaults on a repayment agreement; or

  • The latest Treasury Offset Program External Collection (TOP/ECO) activity.

3. Repay agreement — no payment

If a debtor agrees to repay the overpayment but fails to make any refund, the date of the repayment agreement determines the 10-year accrual period.

4. Exceptions

The 10-year bar does not apply when:

  • Cross-program recovery is involved, or

  • An unresolved protest or appeal is the cause of SSA's inaction.

B. Examples

1. Recovery barred from debtor

HA was terminated and overpaid. We discontinue collection efforts in 1967. A new period of disability was established with benefits payable effective 8/ 88 but we failed to resume collection efforts. The still outstanding debt was discovered in 3/89. Recovery is barred. We had the means to collect by benefit withholding in 8/88 but failed to do so; it is now more than 10 years after the debt accrued.

2. Recovery not barred from debtor

HA was terminated and overpaid disability benefits for 1/76-6/76. He appealed this overpayment determination up to the ALJ level. In 2/77, the ALJ affirmed the initial determination. The debtor agreed to repay by monthly installments. The last payment was made in 8/80, and we discontinued collection efforts on the debt balance. The debtor became entitled to RSI benefits in 9/88 but we failed to resume collection efforts. We discover our error in 3/89. Recovery is appropriate. It is less than 10 years since the debtor defaulted on repayment (i.e., 8/80).

3. Recovery not barred from other person

  1. B2 was terminated and overpaid in 2/78. Recovery from A and C1 was waived in 6/78. In 9/88, C2, C3, C4 and C5 become entitled. C2 and C3 are living in separate households. C4 and C5 live together but in a separate household from C2 and C3. We propose recovery from C2 in 9/88; recovery is waived. We propose recovery from C3 in 10/88; recovery is waived. We propose recovery from C4 and C5 in 12/88. Recovery is appropriate(unless waived). Although the debt is more than 10 years old, we were actively pursuing recovery via adjustment. The delay in proposing recovery from C4/C5 is only because of the priority of adjustment (GN 02210.015). If we also waive recovery from C4/C5, the debt is subject to recovery from any subsequentbeneficiary who becomes entitled.

  2. B2 was terminated and overpaid in 1977. C1 and C2 lived in a separate household from B2 and were entitled from 1977 to 1978. We failed to pursue recovery of B2's overpayment from the children and the debt is still outstanding. C3 becomes entitled to benefits in 6/89. Recovery is appropriate (unless waived). C1 and C2 terminated prior to the 10/87 effective date for the 10-year rule.

C. Procedure

Take the following steps when recovery is barred by the 10-year rule.

 

StepAction
1Prepare an SSA-635 Annotate