For purposes of determining whether recovery of an overpayment defeats the purpose, household family members are defined as the overpaid individual’s spouse and any dependents. A dependent is an individual who depends on the overpaid individual for financial support and whom the overpaid individual or their spouse can claim on their income tax returns. Even if a dependent family member resides outside the household (e.g., child away at school), still consider the individual as a dependent. For purposes of determining whether recovery of an overpayment defeats the purpose, we consider all household family members and the overpaid individual to be a single financial unit, with all income and resources available to each individual.

Where a child is overpaid, a household family member is defined as the child’s parents and their dependent family members. A dependent is an individual (e.g., the child’s sibling) who depends on the overpaid child’s parents for financial support and who the parents can claim as a dependent on their income tax returns.

We consider income and resources as belonging to the child if the income and resources are:

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  In the child’s name or in an instrument (e.g., a trust) in which the child is a named beneficiary; and

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  Available for the child’s use. For information about how to determine whether resources are available to the child, refer to GN 02250.100E.

If any of the child’s income or resources help with household expenses, count the income, resources, and household expenses of the parents and any other household family members as belonging to the child in the defeat the purpose determination. If someone other than a household family member lives in the household, include any contributions that they make to the household as income to the child.

If any of the child’s income or resources do not help with monthly household expenses, make the defeat the purpose determination using only the child’s monthly income, share of monthly household expenses, and resources. To determine the share of monthly household expenses, apply a pro-rata share of the ordinary and necessary living expenses to the overpaid individual and each household family member. Use this formula to apply the pro-rata share: [Total monthly household expenses] / [Overpaid individual + Number of household family members]. 

For examples on how to apply the defeats the purpose provision for a child’s overpayment, refer to GN 02250.100H.1 and GN 02250.100H.3.

Income includes:

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  Government benefits (e.g., Social Security, railroad, workers' compensation, unemployment compensation);

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  Net wages;

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  Net income from self-employment;

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  Child support;

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  Alimony;

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  Pensions;

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  Investment income (e.g., interest, royalties, dividends, and rent); or

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  Income from an Individual Retirement Account (IRA), Keogh plan, or any other type of retirement plans.

The overpaid individual or representative payee (payee) is responsible for providing the documents that support the total household income. After reviewing the information on the SSA-632-BK, only request supporting documentation when the individual’s alleged income is less than $250 after paying monthly household expenses. The supporting documents must be no older than 3 months from the date we receive the waiver request.

If the overpaid individual does not provide supporting documents with the waiver request, send them a notice requesting this information and inform them that they have 30 days to provide it. For Title XVI, use the SSA-L8009 in the Document Processing System (DPS). For Title II, use the equivalent notice in DPS. If the individual notifies you that they are actively trying to obtain the supporting documents and needs additional time, allow them the additional time. If the individual has not provided the documents within 30 days or they have not notified you that they need additional time, you cannot approve the waiver under the defeats the purpose waiver provision. Refer the waiver request to an independent decision-maker to schedule a file review and personal conference.

Ordinary and necessary expenses include:

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  Fixed living expenses such as rent or mortgage payments;

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  Utilities, taxes, food, household supplies, personal care products and services (like a haircut), clothing, transportation, and insurance (life, homeowners, car, medical, etc.);

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  Out of pocket medical expenses;

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  Court ordered payments paid directly to the court;

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  Tuition and school expenses;

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  Expenses for the support of others for whom the overpaid individual is legally responsible; and

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  Miscellaneous ordinary and necessary living expenses which may be reasonably considered as part of the individual's standard of living, such as pet-related expenses and entertainment (e.g., cell phone, cable, internet, vacationing, or reading material).

Expenses that are consistent with the overpaid individual's alleged standard of living are acceptable household expenses. An individual's standard of living is set by the individual. Do not question an individual's standard of living. For example, if the overpaid individual eats at a restaurant every night, accept that as their standard of living. Or, if the overpaid individual has cable television or multiple television streaming services, accept that as their standard of living.

If the overpaid individual has a large one-time expense (e.g., a large medical expense), prorate the expense by dividing the total amount of the expense over a 12-month period to determine the monthly amount.

We will find an overpaid individual needs substantially all income to meet current ordinary and necessary living expenses if monthly income does not exceed monthly expenses by more than $250. Every household has some unbudgeted or unaccountable expenses. This $250 margin allows for unbudgeted expenses or unaccountable expenses. We subtract the monthly household expenses from the monthly household income. If the balance is $250 or less and if the resources are at or below the amounts in GN 02250.100E, we will find that the individual needs substantially all income for ordinary and necessary living expenses and find that recovery defeats the purpose.

If the overpaid individual has more than $250 left over after paying the monthly household expenses, we will find that the individual does not meet the defeats the purpose provision because recovery of the overpayment would not deprive the individual of income needed for current ordinary and necessary living expenses. If we cannot approve the waiver, refer the waiver to an independent decision-maker to schedule a file review and personal conference.

For examples on how to evaluate and compare income to expenses, refer to GN 02250.100.H.3, GN 02250.100.H.4, and GN 02250.100.H.5.

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  Household furnishings,

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  Clothes,

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  Items of sentimental value,

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  One home (the overpaid individual's principal place of residence),

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  Any other real estate the overpaid individual co-owns and cannot sell (i.e. if the other individuals with shares will not agree to liquidate),

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  Two vehicles,

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  Any additional automobile(s) used for the support of the overpaid individual or a household family member who uses a wheelchair or mobility device,

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  Burial plot or prepaid burial contract,

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  Insurance policies,

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  Achieving a Better Life Experience (ABLE) accounts,

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  Certificate of Deposit if it has not reached its maturity date,

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  Trust fund that the individual cannot liquidate,

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  Any resource or fund that generates income the overpaid individual needs to meet ordinary and necessary living expenses,

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  Individual Retirement Account (IRA), Keogh plan, or other type of retirement plan (exclude as a resource, regardless of whether individual is receiving income from the retirement plan), and

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  Any other resource that cannot be converted to cash without incurring a penalty.

An overpaid individual must provide their authorization for us to obtain financial account information whenever we need the information to make a defeats the purpose determination or a deemed to defeat the purpose determination for the 150 percent of the Federal Poverty Level (FPL) criteria. The authorization is located at the bottom of the SSA-632-BK, "Request for Waiver of Overpayment Recovery" form. If an overpaid individual is legally competent, the overpaid individual must sign the authorization, even if they have a payee. If the overpaid individual is a legally incompetent adult or a minor child, the legal guardian or parent must sign the authorization.

If you need financial information from a spouse, parent, or other household family member, the overpaid individual or payee must provide the financial information. If you need additional financial information for the overpaid individual that you cannot receive through the Access to Financial Institutions (AFI) process, the overpaid individual or payee must provide the information. For a list of acceptable proofs, refer to GN 02250.255B3. AFI instructions are located on the Access to Financial Institutions - Home website.

If the overpaid individual does not provide supporting documents with the waiver request, send them a notice requesting this information and inform them that they have 30 days to provide it. For Title XVI, use the SSA-L8009 in the Document Processing System (DPS). For Title II, use the equivalent notice in DPS. If the individual notifies you that they are actively trying to obtain the supporting documents and needs additional time, allow them the additional time. If the individual has not provided the documents within 30 days or they have not notified you that they need additional time, you cannot approve the waiver under the defeats the purpose waiver provision. Refer the waiver request to an independent decision-maker to schedule a file review and personal conference.

Technicians must use the e4641 system to request financial account information if it is needed for a defeats the purpose determination. The e4641 system gives us the ability to access financial account balances and allows the generation of up to twelve GeoRequest searches to financial institutions located in the geographic area where the overpaid individual resides.

If a financial institution does not participate in the electronic AFI process and you need the financial account information for a defeats the purpose determination, you must send the completed and signed SSA-4641, "Authorization for the Social Security Administration to Obtain Account Records from a Financial Institution and Request for Records," form to the nonparticipating financial institution.

Foreign financial institutions do not participate in the electronic AFI process. If you need financial account information from a foreign financial institution to make a defeats the purpose determination, you must send the completed and signed SSA-4641 directly to the financial institution.

If the financial institution does not respond to the AFI request within 15 days, review the SSA-632-BK to determine if the overpaid individual's resources were completed and use the information from the form. If the financial information was not completed on the SSA-632-BK, contact the overpaid individual or payee to ask them to provide the information. Document their response on an SSA-795, "Statement of Claimant or Other Person." If the overpaid individual or payee does not provide the financial account information, you cannot approve the waiver under the defeats the purpose provision. Refer the waiver request to an independent decision-maker to schedule a file review and personal conference, per GN 02270.007.

If the overpaid individual, parent, or legal guardian failed to complete and sign the financial authorization, contact the overpaid individual, parent, or legal guardian to ask if they will provide authorization for us to obtain the overpaid individual's financial records. If they indicate that they want to provide their authorization, send an SSA-4641 to the overpaid individual, parent, or legal guardian and give them 15 days to return the signed form. If they do not provide their authorization, you cannot approve the waiver under the defeats the purpose provision. Refer the waiver request to an independent decision-maker to schedule a file review and personal conference.

If the overpaid individual, parent, or legal guardian refuses to provide, or revokes the authorization to obtain financial information, you cannot approve the waiver under the defeats the purpose provision. Refer the waiver request to an independent decision-maker to schedule a file review and personal conference. For an example on when an individual refuses to provide authorization to access financial account information, refer to GN 02250.100H.6.

If you cannot approve the waiver under the defeats the purpose provision, document why you cannot approve the waiver on the Remarks (RMKS) screen in the Debt Management System (DMS) and input the denial using the DRWD screen in DMS, per MS DMS 006.004. Refer the waiver request to an independent decision-maker to schedule a file review and personal conference.

If you cannot approve the waiver under the defeats the purpose provision, document why you cannot approve the waiver on the Report of Contact screen in the SSI Claims System after an independent decision maker conducts a file review and personal conference. Refer the waiver request to an independent decision-maker to schedule a file review and personal conference.

Jacob, age 10, is overpaid $2,400. Jacob's parent and payee, Sarah, received an overpayment notice on behalf of Jacob. Sarah completed the SSA-632-BK, signed the financial authorization, and sent the form to the local field office.

We determined that Jacob is not at fault in causing the overpayment and does not meet any of the other waiver provisions. Jacob lives with Sarah and two siblings. Sarah does not use any of Jacob's income or resources to help with the food or household expenses. Therefore, we will consider only Jacob’s monthly income, share of household expenses, and resources.

Jacob receives $450 in Title II benefits.

We received Jacob's financial account information through an AFI request. Jacob has $1,000 in a savings account. Jacob is under the resource limit of $6,000.

The family's monthly household expenses total $3,000. Jacob's pro-rata share of expenses is $750 ($3,000 / 4 = $750 for Jacob and 3 household family members).

Jacob's pro-rata share of expenses ($750) exceeds Jacob's income ($450). In addition, Jacob is under the resource limit. Because Jacob's expenses exceed their income and income does not exceed expenses plus the $250 margin, recovery from Jacob defeats the purpose. We will approve their waiver request.

John was overpaid $4,000 because of excess wages and they are no longer eligible for Title XVI. John is not married and does not have any household family members. After receipt of the overpayment notice, John submits a waiver request to a local field office.

After receipt of the SSA-632-BK, the technician determines John is not at fault in causing the overpayment and that the overpayment does not meet any other waiver provisions. The technician makes an AFI request and discovers John has $7,000 in a bank account. John alleges to have saved the Title XVI underpayment installment received in August.

The technician determines John does not meet the defeats the purpose provision because John's resources are over $6,000. The underpayment in John's account must be considered for the defeat the purpose provision even though the retroactive funds are excluded for nine calendar months for Title XVI eligibility purposes. We are unable to approve John’s waiver request because John does not meet the defeats the purpose waiver provision. An independent decision-maker will schedule a file review and personal conference.

Kayla, age 12, is overpaid $4,600. Kayla's parent and payee, Karen, received an overpayment notice on behalf of Kayla. Karen completed the SSA-632-BK, signed the financial authorization, and sent the form to the local field office.

We determined Kayla is not at fault in causing the overpayment and does not meet any of the other waiver provisions. Karen told us that Kayla's income helps with food and household expenses. Kayla lives with Karen and three siblings. We need the monthly income, monthly household expenses, and resources for all household family members since Kayla's income helps with the household expenses.

Kayla receives Title II benefits in the amount of $500. Karen's net monthly income from their employer is $3,000 and they also receive $1,500 in child support every month for Kayla's three siblings. The family's total monthly household income is $5,000 ($500 + $3,000 + $1,500 = $5,000).

The total monthly household expenses are $4,000. When you subtract the monthly household expenses from the monthly household income, the balance is $1,000 ($5,000 - $4,000 = $1,000), which is more than the $250 margin.

We received Kayla's financial account information via an AFI request. Kayla has $2,000 in a savings account. Karen has $2,600 in a checking account and owns a 2020 Ford Edge, which is the only automobile in the household. Therefore, we are excluding the automobile as a resource. Each sibling has $200 in a savings account. The family does not have any more resources.

After adding Kayla’s savings account, Karen’s checking account, and the three siblings’ savings account, the total family resource amount is $5,200 ($2,000 + $2,600 + $600 = $5,200). The family's resource limit is $13,600 which is $10,000 for Kayla and Karen (individual and one family member), and $1,200 for each of the three siblings ($10,000 + ($1,200 x 3) = $13,600).

After evaluating Kayla’s and the household family members’ resources, we determined that the resources are under the resource limit. However, the total monthly household income exceeds the $250 margin (after subtracting expenses from income). We are unable to approve Kayla's waiver because they do not meet the defeats the purpose waiver provision. An independent decision-maker will schedule a file review and personal conference.

Tom received an overpayment notice and was overpaid $3,500. Tom lives with their spouse, Alice. Tom completed the SSA-632-BK, signed the financial authorization, and sent the form to the local field office. We determined Tom is not at fault in causing the overpayment and does not meet any of the other waiver provisions.

Tom provided the couple’s monthly income, monthly household expenses, and household resource information. Tom receives $2,500 in Title II benefits and a monthly pension of $1,000. Alice receives $1,000 in net income. Together they receive $4,500 per month in income. Tom and Alice's monthly household expenses are $4,450. When subtracting the monthly household expenses from the monthly household income, the balance is $50 ($4,500 - $4,450 = $50), which is less than the $250 margin.

We received Tom's financial account information via an AFI request. Tom has $15,000 in a savings account and $1,000 in a checking account. Tom owns a 2018 Chevy Equinox, and Alice owns a 2020 Ford Edge, which are the only two automobiles in the household. Therefore, the automobiles are excluded as a resource. Alice has a $10,000 Certificate of Deposit. They do not have any more resources. After adding Tom’s savings account, checking account, and Alice’s CD, the total resource amount is $26,000 ($15,000 + $1,000 + $10,000 = $26,000). Tom's resources exceeds the resource limit which is $10,000 (individual and one family member).

Although Tom's and Alice's income do not exceed the $250 margin, they exceed the resource limit. We are unable to approve Tom's waiver because they do not meet the defeats the purpose waiver provision. An independent decision-maker will schedule a file review and personal conference.

Jerry received an overpayment notice and was overpaid $5,250. Jerry completed the SSA-632-BK, signed the financial authorization, and sent the form to the local field office. Jerry lives alone in a home that they own. We determined Jerry is not at fault in causing the overpayment and does not meet any of the other waiver provisions.

Jerry receives $2,000 in Title II benefits and $1,500 from a pension. Jerry’s total monthly income is $3,500 and their monthly household expenses are $3,450. After subtracting the monthly household expenses from the monthly household income, the balance is $50 ($3,500 - $3,450 = $50), which is less than the $250 margin.

We received Jerry's financial account information via an AFI request. Jerry has $16,000 in a savings account. Jerry owns a home (their principal residence), a car, and a camper. We excluded Jerry's home and two vehicles (car and camper) as resources. Jerry's resources total $16,000 (savings account). Jerry’s resources exceeds the limit which is $6,000 (individual).

Although Jerry’s income does not exceed the $250 margin, Jerry exceeds the resource limit. We are unable to approve Jerry's waiver because they do not meet the defeats the purpose waiver provision. An independent decision-maker will schedule a file review and personal conference.

Rachel received an overpayment notice and was overpaid $2,500. Rachel completed the SSA-632-BK and sent the form to the local field office. Rachel refused to provide authorization for us to obtain financial account information.

We determined that Rachel is not at fault in causing the overpayment and does not meet any of the other waiver provisions.

We cannot approve Rachel's waiver under the defeats the purpose waiver provision because they refused to give us permission to access financial account information. An independent decision-maker will schedule a file review and personal conference.