TN 35 (10-18)

GN 02210.006 Benefit Adjustment from the Overpaid Individual

A. Adjustment of current monthly benefits

The automated system reduces or withholds the monthly benefit payment once the 60-day due process period expires without a due process request from the individual. The 60-day due process period begins with the current operating month (COM), or in other words, the month we establish the overpayment.

EXAMPLE 1: In 05/2014, we determined that Joshua Anderson was overpaid $4,000 because of his receipt of workers’ compensation payments. Mr. Anderson did not request a reconsideration (appeal) or a waiver within 60 days; nor did he submit a full refund within 30 days. Since Mr. Anderson did not make a due process request, the automated system starts benefit withholding to recover the overpayment in COM 07/2014 by withholding the benefits payable in 08/2014.

B. When to delay recovery

Stop collection activity if the overpaid individual requests an explanation of the overpayment, reconsideration (appeal), or waiver of recovery of an overpayment. We may have to repay any monies that we withheld after we received the request. For more information regarding an explanation, reconsideration, or waiver request, see GN 02201.017, GN 02201.025, and GN 02201.019.

Delay recovery when the overpaid individual alleges non-receipt of a check (or electronic funds transfer) and requests waiver or reconsideration, or a forgery determination per GN 02406.310.

NOTE: When an individual requests waiver and we receive the request within 30 days of the date of the overpayment notice, we consider the individual to have made the request in the same month we issued the notice. For example, if the notice is dated February 22, 2018 and we receive a waiver request on March 10, 2018, we consider the individual to have made the request in February 2018.

C. Adjustment of an underpayment(s)

We withhold any underpayment that becomes due after we notify the individual about the overpayment, as long as he or she does not protest the overpayment. Use of the underpayment to reduce the overpayment applies even if partial withholding or installment payments are ongoing. For more information regarding the overpayment notice, see GN 02201.009.

1. Waiver or reconsideration not requested or the request is not pending

If the overpaid individual has not requested a waiver or a reconsideration and we have determined that an underpayment is also due on the record, withhold the underpayment to reduce or recover the outstanding overpayment. If we denied the waiver, or the reconsideration decision does not completely reverse the overpayment determination, withhold any underpayment to reduce or recover the outstanding overpayment.

In addition, withhold any underpayment to reduce or recover an overpayment if the overpaid individual has a partial withholding or installment agreement.

EXAMPLE 1:In 01/2016, we determined that Brenda Smith was overpaid $2,500 because of work and earnings in 2015. Due to her 2016 work estimate, she was not receiving payments in 2016. In 04/2016, we denied her request for waiver. In 07/2016, she began to refund the overpayment via $20 monthly installment payments.

In 08/2016, Ms. Smith revised her 2016 earnings estimate and was due benefit payments beginning 06 /2016. Due to the 04/2016 waiver denial, we will withhold her underpayment of $980 for 06/2016 through 08/2016 to reduce her overpayment. In addition, since Ms. Smith is again receiving benefits, we will continue to use her installment agreement amount to recover the balance of the overpayment beginning 09/2016 via partial withholding. The underpayment is used to reduce the overpayment even if partial withholding or installment payments is ongoing.

EXAMPLE 2:In 10/2012, we notified Jordan Lee that he was overpaid $2,300. He began to repay his overpayment via monthly installment payments. We discontinued collection efforts in 01/2015 because Mr. Lee stopped making his installment payments.

In 02/2016, we established a new period of disability and processed his re-entitlement to benefits in 05/2016. We withheld an underpayment of $900 (benefits due 03/2016 and 04/2016) to reduce the overpayment since he did not request a waiver or appeal when we informed him of his overpayment in 10/2012. When we processed Mr. Lee’s re-entitlement to disability benefits, we informed him that we were withholding his underpayment to reduce his overpayment and withholding his benefits until we fully recover his overpayment.

2. Waiver or reconsideration determination is pending

If we have not made a final determination on the individual’s waiver or reconsideration request, pay any underpayment due for the months beginning with the month the individual submitted the request.

A waiver or a reconsideration determination is pending if:

  • The 30-day closeout notice (Request for Waiver Cover Letter) for an implied waiver request has not expired; or

  • The individual requested a reconsideration or a waiver (or both) but we have not made a final determination.

NOTE: A proposed determination to deny the waiver includes the opportunity for a personal conference (see GN 02270.015). Therefore, the final waiver determination is still pending until we have completed the personal conference.

If the overpaid individual requests a hearing after he or she has exhausted other administrative appeal rights, re-initiate collection activity (see GN 02201.027). Withhold any underpayment due for the month the individual requests a hearing and thereafter until a final decision is made.

EXAMPLE 1:In 12/2016, we notified Shawn Roberts that he was overpaid $5,800 because we did not terminate his disability benefits timely. In 02/2017, he requested reconsideration of the overpayment determination and waiver of recovery. In 04/2017, the reconsideration determination affirmed the overpayment. In 06/2017, he filed for a new period of disability. We also proposed to deny his waiver request and scheduled a personal conference.

In 08/2017, prior to the scheduled personal conference date in 09/2017, we determined that Mr. Roberts was entitled to a new period of disability effective 06/2017 and was underpaid $2,310. We would pay the entire underpayment to Mr. Roberts since we did not make a final determination on his 02/2017 waiver request (i.e., the personal conference decision was pending) and none of the additional benefits represented monies due for the months before the month he requested waiver (i.e. months prior to 02/2017).

EXAMPLE 2:In 12/2016, we notified Shawn Roberts that he was overpaid $5,800 because we did not terminate his disability benefits timely. In 02/2017, he requested reconsideration of the overpayment determination and waiver of recovery. In 04/2017, the reconsideration determination affirmed the overpayment. In 06/2017, he filed for a new period of disability. We also proposed to deny his waiver request and scheduled a personal conference.

In 08/2017, prior to the scheduled personal conference date in 09/2017, we determined that Mr. Roberts was entitled to a new period of disability effective 01/2017 and was underpaid $3,310. We would we would withhold the part of the underpayment representing benefits due for 01/2017 to reduce the overpayment. Because the personal conference decision on the 02/2017 waiver request was still pending, we would pay the part of the underpayment representing additional benefits for 02/2017 and subsequent months.

3. Recovery is waived

If we waive recovery of the overpayment and subsequently determine an underpayment is due:

  • Use any additional benefits due for months before we issued the overpayment notice to recalculate the overpayment amount (see GN 02201.005); and

  • Withhold any part of the underpayment representing additional benefits due for months before the month the individual requested waiver.

EXAMPLE 1:On 4/12/2015, we notified Pete Reed of a $1,680 overpayment because of an incorrect computation. We withheld his $400 monthly benefit payment for 07/2015 and 08/2015, and reduced the outstanding overpayment to $880 ($1,680 minus $800). He requested waiver in 09/2015. We approved his waiver request; therefore, Mr. Reed was no longer overpaid. In 10/2016, an Automatic Earnings Reappraisal Operation (AERO) resulted in a $2 monthly benefit increase effective 01/2015. We used the $6 due for 01/2015 through 03/2015 to recalculate his overpayment amount to $1,674 (see GN 02201.005).

We withheld the additional benefits for 07/2015 through 08/2015 totaling $6, due for months before the month Mr. Reed requested waiver in 09/2015, to adjust the overpayment amount we waived to $868 (i.e., $1,674 minus $800 and minus $6). We paid the additional benefits due beginning 09/2015, the month of the waiver request.

EXAMPLE 2:On 4/12/2015, we notified Pete Reed of a $1,680 overpayment because of an incorrect computation. He requested waiver in 05/09/2015 (i.e., within 30 days of the overpayment notice). We approved his waiver request; therefore, Mr. Reed was no longer overpaid. In 10/2016, an Automatic Earnings Reappraisal Operation (AERO) resulted in a $2 monthly benefit increase effective 01/2015. We used the $6 due for 01/2015 through 03/2015 to recalculate his overpayment amount to $1,674 (see GN 02201.005).

In this case, the overpayment for which we waived recovery is $1,674 (i.e., $1,680 minus $6). We pay the entire underpayment (i.e., additional benefits due from 04/2015, the month of overpayment determination and notice).


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GN 02210.006 - Benefit Adjustment from the Overpaid Individual - 10/12/2018
Batch run: 10/12/2018
Rev:10/12/2018