To understand the concept of similar fault, you must understand its relation to fraud.
If we cannot establish fraud for reopening (no preponderance of evidence establishing
knowledge and intent), but we can establish by a preponderance of evidence that the
claimant or any other person did something wrong (knowingly, but we cannot establish
fraudulent intent), then we can establish similar fault and you may reopen. Again,
as in fraud, the finding that similar fault exists is a judgment decision and is based
on the facts in the case.
NOTE: We only make similar fault determinations with regard to reopening initial determinations.
In criminal matters and correcting E/R's under the statute of limitations, (section
205(c)(5)(E) determinations) there is no such term as similar fault.
EXAMPLE: Claimant filed an SSA-1-BK, Application for Retirement Insurance Benefits, on February 17, 1976 and stated her
earnings for 1975 were $5,372.83, the amount she received from one employer. She furnished
a W-2 (Wage and Tax Statement) verifying that amount. On March 16, 1976, we made an
initial determination entitling her to benefits and imposed work deductions.
In 1982 during a quality review, we discovered that she had failed to report that
she had also worked for an additional employer in early 1975 and earned $603.44. Therefore,
we had computed the work deductions for 1975 incorrectly, and we overpaid her. The
second employer had gone out of business early in 1975, and she never received a W-2
from that employer. When we contacted her in 1982 during the quality review (seven
years after she worked for the second employer), she did not deny that she worked
for that employer in 1975 and, in fact, she was able to furnish details concerning
the employer going out of business.
It is reasonable to conclude that she knew in February 1976 that she worked for that
employer in 1975 (only one year earlier), just as she knew in March 1982. It is also
reasonable to conclude that she knew that the fact that she did not have a W-2 from
that company did not mean that earnings from that employer did not have to be included
in the total earnings for 1975. She could have at least estimated her earnings from
the employer. As stated in GN 04020.010C, “fault” means “knowledge on the part of the claimant.” Although she may not actually
have had fraudulent intent (fraud), the evidence shows that she knowingly made an
incorrect and incomplete statement when she completed the SSA-1-BK (similar fault).
We cannot excuse the claimant for ignorance of the law (GN 04020.010C) because we specifically asked about her employment via a specific question on the
application. Therefore, we can reopen the March 1976 initial determination on the
basis that similar fault exists, and we can recompute the 1975 work deductions using
the correct earnings for 1975.