TN 3 (08-02)

SI 02201.015 SSI Netting/Offsetting Overpayments Against Underpayments

A. Policy

1. Netting

Netting is the process used to determine whether there is an overpayment or an underpayment. It is a part of the payment computation process. All excess payments and additional amounts due for the period (see SI 02201.005B.3.) under review are compared. The result is the net over/underpayment amount.

NOTE: Netting is not a method of overpayment recovery. It is the procedure used to determine the amount of an underpayment or the outstanding balance due.

2. Offsetting

Offsetting is the process whereby outstanding overpayment balances are reduced by additional amounts due (potential underpayments).

3. Excess Payment

An amount computed by the system as being more than what was due.

4. Couples Case

In rare situations, one member of a couple will incur an overpayment and the other member an underpayment in the same payment period. The underpayment due a member of a couple is not held solely to determine whether an overpayment can be collected from his/her liable spouse. The additional amounts due one member are netted against an excess payment to the other only when:

  • The spouse due the underpayment agrees to have his/her payment used to reduce the overpayment; and

  • The overpaid spouse has exhausted his/her appeal rights.

NOTE: See SI 02201.022 for a discussion of overpayment responsibility in a couple's case.

5. Multiple Overpayment Events and Waiver

An overpayment can result from different events (e.g., part of the overpayment was caused by excess income while another part of the overpayment was caused by a living arrangement change). If waiver applies to part, but not all, of the overpaid amounts for any period, any additional amounts due for the period are applied against those overpaid amounts not subject to waiver.

6. Notifying the Individual of the Overpayment--Netting

The initial overpayment notice tells the overpaid individual of the net amount of the overpayment. It will not tell the individual how the additional amounts due (if any) and excess payments were netted. (See NL 00803.130)

B. Procedure -- netting

Beginning September 2002 the system will, in most cases, automatically compute the net amount for all periods where there are excess payments and additional amounts due for the period(s) under review. If the net result is an overpayment, the system will create an overpayment sequence for the period under review. The system will, in most cases, notify the individual of the net result either by sending a post eligibility notice and issuing an underpayment or by sending an initial overpayment notice. If the system can not perform automated netting and/or can not send an automated notice, it will set a B3 diary. See SM 01311.633 for instructions on resolving B3 diaries.

If the system can not perform automated netting and/or can not send an automated notice, the Field Office (FO) is required to manually net the period under review and/or issue the appropriate initial overpayment (or underpayment) notice.

See SM 01311.160B for cases that are excluded from automated netting.

C. Procedure -- offsetting

When there is a collect decision, the system will reduce the outstanding balance of an overpayment by the amount of an underpayment.

When the underpayment amount exceeds the overpayment balance, the remainder is paid to the individual.

D. Procedure -- manual netting

1. Case is Excluded - System Unable to Net

If the case is excluded from automated netting because the system is unable to perform netting the FO will manually net the period under review and issue the appropriate initial overpayment notice.

2. Case is Excluded - System Unable to Send the Notice

  1. Prepare and send the appropriate initial notice of overpayment.

    • Show all months of the period under review and the result of netting the additional amounts due and the excess payment amounts from the “net” overpayment sequence.

    • Use the language in SI 02201.015E. (or the language in DOCS).

    • Enter the Notice Date through the UOSD screen – see MSOM BUSSR 004.006 .

  2. Add a RECOVER BY CHECK ADJUSTMENT decision on the UOPD screen (see MSOM BUSSR 004.008 and SM 01311.105)

  3. If the “net” result is an underpayment, go to the UOUP screen and enter the appropriate code to release the underpayment. (MSOM BUSSR 004.018 .) You must release the underpayment, add a notice date, and add a Recover by Check Adjustment decision at the same time. (SM 01311.165)

  4. See SM 01311.165 for complete manual netting instructions.

E. Exhibit -- netting paragraph—overpayment

OVERPAYMENT LANGUAGE ON OVERPAYMENT CHART

__(1)__ overpaid __(2)___. We looked at the money amounts we paid and the money amounts we should have paid for each month listed below in determining the overpayment amount. The following chart shows how much __(3)__ payment changed each month. The first column lists the month(s) we paid __(4)__ incorrectly. The next column shows the incorrect amount paid for each month. The last column shows the amount we should have paid __(5)__ for each month. __(6)__. We added all of the incorrect money amounts. Then we added all of the correct money amounts we should pay. We subtracted the total incorrect money amount from the total correct money amount to get the total overpayment.

                                                                        Amount                                               Correct

Month                                                             Paid                                                     

Amount

__(7)__                                                  __(8)__ __(9)__ __(10)__ __(11)__

Total                            __(12)__                                                                        __(13)__

1. FILL-INS

1: Choice 1: You were

Choice 2: She was

Choice 3: He was

2: Fill-in:            $$$.cc

3: Choice 1: your

Choice 2: her

Choice 3: his

4: Choice 1: you

Choice 2: her

Choice 3: him

5: Choice 1: you

Choice 2: her

Choice 3: him

6:

Choice 1:

The SSI we paid you includes some payments we made for your State. We show your total SSI below, and then the part of this money that is from your State.

 

Choice 2:

The SSI we paid her includes some payments we made for her State. We show her total SSI below, and then the part of this money that is from her State.

 

Choice 3:

The SSI we paid him includes some payments we made for his State. We show his total SSI below, and then the part of this money that is from his State

 

Choice 4: Null.

 

7: Fill-in:                  Calendar Month

8: Fill-in:                  $$$.cc

9: Choice 1:             ($$$.cc is (name of State or the District of Columbia) with ‘‘ ‘s ”)

Choice 2: Null

10: Fill-in:                $$$.cc

11: Choice 1:           ($$$.cc is (name of State or the District of Columbia) with “ ‘s”)

Choice 2:           Null

12: Fill-in:                $$$.cc

13: Fill-in:                $$$.cc

F. References

  • Underpayment Netting—SI 02101.001

  • Overpayment Period---SI 02201.005B.3.b.

  • Resolving B3 diaries---SM 01311.633

  • Exclusions from Automated Netting---SM 01311.165B


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0502201015
SI 02201.015 - SSI Netting/Offsetting Overpayments Against Underpayments - 11/18/2014
Batch run: 11/18/2014
Rev:11/18/2014