Effective Dates: 09/05/2013 - Present Previous | Next

TN 48 (06-19)

SI 02220.013 Collection of Title XVI Overpayments by Administrative Offset

A. Policy – general

1. Authority for Administrative Offset

The Foster Care Independence Act of 1999 (FCIA) extends to the Title XVI program all of the debt collection authorities currently available for the collection of overpayments under the Title II program. For information on Title II collections by Administrative Offset, see GN 02201.031.

Important:

In this section, the term “administrative offset” refers to the reduction or withholding of Federal payments other than tax refunds. Although Tax Refund Offset (TRO) is a type of administrative offset, TRO procedures appear in SI 02220.012.

2. Definition of administrative offset

Administrative offset is the reduction or withholding of Federal or State payments to a person to recover a delinquent debt owed by that person to the Federal government. Various Federal payments, such as travel, expense reimbursements, Office of Personnel Management (OPM) pensions, and Federal contractor payments, as well as eligible State payments, such as State income tax refunds, are subject to administrative offset to recover certain past due Title XVI overpayment debts. OPM pensions are subject to a reduction of up to 25% of the net payment. Vendor payments such as Federal contractor payments, travel, and expense reimbursements are subject to a reduction of up to 100% of the net payment until the overpayment is repaid.

3. Criteria for administrative offset selection

SSA's automated systems select certain Title XVI debts for recovery by administrative offset. The following criteria apply:

a.

The debt must have been paid to a person after that person attained 18 years of age;
b.

The debt must be considered to be “unrecoverable” under regulations determined by the Commissioner of Social Security (see SI 02220.013B.1., in this section, for the definition of “unrecoverable”);
c.

The debt must be owed by a person who is no longer entitled to receive Supplemental Security Income benefits;
d.

The debtor must be alive;
e.

The debt must be $25.00 or more; and
f.

The debt must be delinquent (see SI 02220.012B.2. for the definition of the term “delinquent”).

B. Policy – unrecoverable debt

1. Definition of unrecoverable debt

SSA considers a Title XVI debt to be unrecoverable if it meets all of the following conditions:

a.

The RECOOP billing status is past-due, or the debt has been written off as uncollectable (SSI overpayment sequence with a “DB” or “DM” TAC code, see SM 01311.200); and
b.

SSA has not entered into an installment agreement with the debtor within the past 30 days, or the debtor has failed to make any payment for forty five days; and
c.

No appeal/waiver is pending; and
d.

The debtor is a former recipient.

2. When a debt is unrecoverable

An SSI debt is unrecoverable when it meets the definition in SI 02220.013B.1. For purposes of the administrative offset program, a specific unrecoverable date is not required.

C. Process – pre-offset notice

Once a debt is selected for administrative offset, SSA sends the debtor a pre-offset notice using the debtor's address of record from the SSR. If the SSR does not have an address or if the notice is returned as undeliverable based on the SSR address, then the Treasury Offset Program (TOP) system will get any available address from the credit bureau via an automated address request operation run out of Central Office (CO). If the credit bureau provides a new address, SSA will re-mail the pre-offset notice using that address. If the credit bureau does not provide a new address, then the case will be deleted from TOP. (See GN 02201.029 for a complete explanation of TOP.)

Note:

The automated address request operation runs out of CO and is a separate project from the credit bureau address requests made by the Debt Management Systems (DMS). The automated operation has no impact on the DMS requests.

The pre-offset notice tells the debtor about the planned offset action and:

•

That he or she owes a delinquent overpayment debt in a particular amount;
•

That SSA plans to refer the debt to Treasury for TOP/ECO and/or send information about the debt to credit bureaus after 60 days have expired from the date on the notice;
•

That SSA will not take this action if, before the end of that 60-day period, the debtor pays the debt in full, makes regular installment payments under an agreement with SSA, requests waiver, or furnishes evidence showing that he or she does not owe all or part of the stated amount or SSA does not have the right to collect the debt; and
•

That the debtor may review and copy SSA's records about the debt.

Note:

SSA sends one notice to inform the debtor about TOP/ECO and credit bureau reporting. The same repayment options and due process rights described in SI 02220.012A.4. are offered for credit bureau reporting and for all collection tools. (See SI 02220.014 for credit bureau reporting of Title XVI debts.)

D. Procedure - handling debtor inquiries/protests – pre-offset

1. Request for explanation of overpayment

a. PSC/TSC action

If a request for an explanation of the overpayment is received, use the SSR to provide an explanation of the overpayment. Keep explanations generic to the extent possible. For example:

“You were no longer disabled as of 5/18 and continued to receive checks through 12/18.”

If online queries contain insufficient information or unresolvable discrepancies, proceed as follows:

On the MSSICS Update Sequence Data (UOSD) screen, see MSOM BUSSR 004.006) select EXPLANATION OF OVERPAYMENT to suspend billing.

•

Refer to the FO via a priority Modernized Development Worksheet (MDW). Request that the FO provide an explanation to the debtor.
•

Annotate the referral Necessary Action – TOP/Credit Bureau Case - Do Not Backlog.

b. FO action

•

Once a satisfactory explanation is given to the debtor, remove the suspend billing code via the MSSICS Update Sequence Data (UOSD) screen. (See MSOM BUSSR 004.006).

2. Request for explanation of administrative offset

If a request for an explanation of administrative offset is received, explain that, as indicated in the pre-offset notice, Congress passed a law that allows Treasury to withhold unrecoverable SSI overpayments from Federal and State payments due the overpaid person. No systems input is needed to document the request for explanation. The request alone does not stop recovery efforts.

3. Request for waiver

Follow the instructions in SI 02220.012E.3. Advise the debtor that administrative offset remains in effect until SSA receives a completed and signed SSA-632-BK (or its equivalent).

4. Request to review record

Follow the instructions in SI 02220.012E.4.

5. Request for installment payments

Follow the instructions in SI 02220.012E.5.

6. Debtor objects to collection of debt

a. Protest involves request for review of the debt or the legality of collection

If the debtor alleges he or she does not owe all or part of the debt or that SSA has no legal right to collect the debt, we must receive evidence to support the allegations within 60 days from the date of the pre-offset notice. Advise that we must receive any request to review the finding before we refer the debt to Treasury. Follow SI 02220.012E.6.a. to review any statements/evidence.

b. Protest involves the fact and/or amount of debt

The 60-day due process notice telling the debtor about administrative offset does not offer the right to request reconsideration of the fact and/or amount of the overpayment. If the debtor still protests the fact and/or amount, follow the instructions in SI 02220.012E.6.b.

7. Debtor alleges non-receipt of overpayment checks or direct deposit payments

If a debtor alleges non-receipt of the overpayment check(s) or direct deposit payment(s), obtain an SSR query or Treasury Status query. If the query does not show non-receipt of the payment(s) in question proceed as follows:

•

If the debtor had a representative payee, explain that the payment(s) was sent to the payee and there is no indication that payment(s) was not received.
•

If there was no representative payee, explain that our records did not show any evidence of a non-receipt allegation at the time the initial overpayment notice was sent.
•

If the debtor insists that he or she did not receive the payment(s) in question, explain that we will investigate but the debt will still be referred to Treasury for offset. Repayment of any erroneous offset will be made if the investigation supports the non-receipt allegation. Follow GN 02406.130 to process the non-receipt allegation for a check, and GN 02406.007 for a direct deposit payment. DO NOT make a suspend billing code input. If the date of the alleged missing check is more than 12 months in the past, see GN 02401.901 through GN 02401.920 for processing limited payability non-receipt cases.

8. Debtor makes a compromise offer

Follow the instructions in SI 02220.030 and sensitive instructions in SI 02220.031.

9. Debtor alleges non-receipt of initial overpayment notice

Follow the instructions in SI 02220.012E.9.

10. Report of death

Follow the instructions in SI 02220.012E.10.

11. Report of bankruptcy action

If the debtor alleges a bankruptcy petition is pending or the debt was discharged in bankruptcy, obtain a copy of the petition or discharge order. Input the allegation via the UOPD screen (see MSOM MS 00304.008 and SM 01311.421) by selecting BANKRUPTCY to post an MS TAC to the SSR. Process the petition or discharge order in accordance with SM 01311.220.

If the debtor alleges that the debt has been discharged in a bankruptcy judgment, ask him/her to submit a copy of the discharge.

•

If the SSA debt has been discharged, select CHANGE on the Add/Change/Delete UODC screen in Direct SSR Update (see MSOM BUSSR 004.007) to change the decision, if present, to UNCOLLECTABLE (see MSOM BUSSR 004.008) (N TAC) decision to prevent any further collection activity (see SM 01311.280). If a MS TAC is present, change the MS TAC to an N TAC to prevent further collection activity.

•

If the SSA debt is not listed on the discharge, process the case in accordance with SI 02220.040.

E. Procedure - handling post-offset/post-certification inquiries

Some inquiries will be received after certification to Treasury or actual offset has occurred. In the majority of these cases, the debtor simply failed to contact us to resolve the repayment issue as specified in the pre-offset notice. There are other situations, however, where certification to Treasury may have been incorrect. This section explains how to handle specific post-offset/post-certification inquiries.

1. Allegation of pending protest or waiver request

Follow the instructions in SI 02220.012F.1. through SI 02220.012F.3.

2. Request for waiver

Follow the instructions in SI 02220.012F.4.

3. Request for installment payments

Follow the instructions in SI 02220.012F.5.

4. Excess collection

Follow the instructions in SI 02220.012F.6.

5. Alleged non-receipt of pre-offset notice

a. Undeliverable Notive Posted to TOP

EXAMPLE: A debtor calls us in March complaining that Treasury informed them that $500 of their State refund was offset to repay a debt to SSA. He says he never received his pre-offset notice.

The TOP query (see MSOM DMS 014.007) shows an undeliverable notice posted on March 5.

Explain both the administrative offset process and the existing overpayment to the debtor. Also explain that we received the returned notice from the post office too late to stop the offset, but we will take action to refund the money withheld by Treasury if the debtor wishes it. If the debtor wants the money returned to him, establish how he wishes to repay. Tell the debtor we will refer his debt to Treasury again if he becomes delinquent in repaying.

b. No Undeliverable Notice Entry on TOP

EXAMPLE: The same situation in SI 02220.012G.2.a, except the TOP query (see MSOM DMS 014.007) does not have an undeliverable notice entry.

Explain that we have a record of all notices returned as undeliverable by the Postal Service and his notice was not returned. When the notice has not been returned, we must assume that it was delivered and proceed under the provisions for debt collection under TRO. Explain to the debtor that we must keep the money collected by Treasury unless he establishes that: 1) the debt does not exist; or 2) he has no liability for repaying the debt; or 3) recovery of the debt is waived; or 4) he provides clear and convincing evidence that the letter was never delivered. He may pursue any of these options, but no money will be refunded unless SSA reaches a decision in the debtor's favor based on the information he provides.

6. Allegation of bankruptcy action

If the debtor alleges a bankruptcy petition is pending or the debt was discharged in bankruptcy, obtain a copy of the petition or discharge order. Input the allegation via the UOPD screen (see MSOM MS 00304.008 and SM 01311.220) selecting BANKRUPTCY to post a MS TAC to the SSR. Process the petition or discharge order in accordance with SI 02220.040.