TN 12 (04-09)

SI 02260.020 Defeat the Purpose of Title XVI of the Act

A. Policy

1. Defeat the purpose of title XVI of the Act

We do not recover title XVI overpayments if the liable overpaid individual is without fault and both of the following conditions are met:

  1. The individual needs substantially all of his or her current income to meet his or her current ordinary and necessary living expenses; and

  2. Recovery would reduce the individual’s total resources below $3,000 for a person without dependents or $5,000 for a person with one dependent. If the individual has more than one dependent, we allow an additional $600 for each additional dependent.

2. Deemed defeat the purpose of title XVI of the Act

If the overpaid individual is eligible for SSI payments, we use an alternative method to determine whether recovery from a liable individual who is without fault would defeat the purpose of title XVI of the Act. The alternative method is called Deemed Defeat the Purpose of title XVI of the Act.

  1. We determine that “deemed defeat the purpose of title XVI of the Act” exists in continuing eligibility cases if the individual’s current total income does not exceed:

    • The Federal Benefit Rate (FBR); plus

    • The $20 general income exclusion; plus

    • The $65 earned income exclusion; plus

    • The federally administered State supplementary level.

  2. We use only that portion of the income of the spouse, parent or essential person which is deemed for computation purposes to determine the individual’s income.

3. Possession of incorrect payment

Recovery does not defeat the purpose of title XVI of the Act if the liable individual has in his or her possession any of the incorrectly paid payment(s) or identifiable proceeds from such payments in liquid resources which accumulated during the overpayment period.

B. Procedure for determining defeat the purpose of title XVI of the Act

No development beyond completion of the SSA-632-BK is required if you determine that the requirements of defeat the purpose of title XVI of the Act are met.

Complete the SSA-632. See SI 02260.005.

1. Eligibility continues

  1. If SSI eligibility continues and current countable monthly income is less than:

    • The FBR; plus

    • The $20 general income exclusion; plus

    • The $65 earned income exclusion; plus

      NOTE: Do not consider other income disregards (i.e., those used for computation purposes).

    • The federally administered State supplementary level

      Then find defeat the purpose of title XVI of the Act.

  2. If SSI eligibility continues and the individual’s total countable income is more than the amount in SI 02260.005B.1.a,

2. No current SSI eligibility or deemed defeat the purpose of title XVI of the Act does not apply

If there is no current SSI eligibility or the provisions of deemed defeat the purpose of title XVI of the Act are not applicable, find that recovery would defeat the purpose of title XVI of the Act if:

  1. The individual needs substantially all current income to meet current ordinary and necessary living expenses; and

  2. Recovery would reduce the total resources (as defined in GN 02250.115 through GN 02250.130) below $3,000 for an individual without dependents or $5,000 for a person with one dependent. Allow an additional $600 for each additional dependent.

    Remember: If you determine the requirements for defeat the purpose of title XVI of the Act are not met, you may still waive recovery if you determine that recovery or adjustment would be against equity or good conscience. See SI 02260.025

3. Spouse-to-spouse deeming

  1. Determine the amount, if any, of deemable income from the ineligible spouse.

    NOTE: This is the calculation you would do if you had to calculate type “V” unearned income. See SM 02101.010.

    If there is no income to deem to the liable overpaid individual, do not include the spouse’s income in your deemed defeat the purpose of title XVI of the Act determination.

  2. If the income deemed from the ineligible spouse lowers the eligible individual’s SSI payment:

    • Calculate the liable overpaid individual’s payment using only his or her own income.

    • Add the ineligible spouse’s deemed income to the eligible individual’s own income.

    • Subtr