TN 5 (05-06)

SI 04070.070 SSI Overpayment/Underpayment Development

A. Policy - Overpayments

1. Late Discovery of an Event Causing an Overpayment

When the late discovery of an event causes an overpayment:

  1. The event causing the overpayment occurred within the 1- or 2-year administrative finality period

    All actual or deemed determinations that are affected by the event can be reopened and revised as applicable. A revised determination and an overpayment determination can be made for all months affected by the event.

  2. The event causing the overpayment occurred before the 1- or 2-year administrative finality period

    Some or all of the affected actual or deemed determinations may be barred to correction. All determinations which occurred before the administrative finality period may not be reopened or revised unless there is fraud or similar fault. All affected determinations which occurred within the administrative finality period may be reopened and revised. A revised determination and an overpayment determination can only be made for those determinations which can be reopened and revised.

2. Overpayment Determination

An overpayment determination is an initial determination separate from the revised determination giving rise to it.

3. Reopening Overpayment Determinations

If SSA subsequently discovers that the overpayment determination is incorrect, it may be reopened and revised for up to 2 years after the date of the notice of the overpayment initial determination, regardless of the months affected. Nevertheless, new additional overpayment issues discovered during the period covered by an overpayment determination are limited to the 1 or 2 year administrative finality period. Procedures for the collection of overpayments are not governed by the rules of administrative finality. See SI 02220.000 – Recovery Procedures for Supplemental Security Income Overpayments, for additional information on the recovery procedures for SSI overpayments.

Before deciding to reopen an overpayment determination, be sure to determine whether the determination is within 1 or 2 years from the date of the initial overpayment determination. If good cause is established and the initial overpayment determination was made within 2 years, the period affected within the initial overpayment determination can be reopened in its entirety.

If the initial overpayment determination was made over 1 or 2 years from the date of the discovery of the error, the initial overpayment determination can not be reopened and revised. However, we can reopen and revise any erroneous deemed determinations within 1 or 2 years from the date we discover the error depending on whether good cause exists to reopen.

B. Examples – Reopening Overpayment Determinations

1. Example – New Overpayment Issues

An initial SSI notice of overpayment was issued on 06/30/2000. This notice affected months starting in 08/1998. On 09/10/2000, SSA obtained evidence of new additional wages from another employer beginning in 08/98 and up to the present date, 09/10/2000. Since this is new additional wages, we can only revise the income beginning in 10/98 (1st deemed determination from 09/10/2000) up to the present date. The new revised overpayment notice sent on 09/21/2000 revised the initial SSI notice of overpayment dated 06/30/2000 because it contained new additional wages that created another overpayment.

2. Example – O/P Discovered Within 2 Years – Good Cause Found – Determination Reopened in its Entirety

On 04/13/2004, SSA staff initiated a RZ in MSSICS. At that time, the CRT discovered the individual was receiving more income than was previously reported but did not find fraud or similar fault. Consequently, the CRT reviewed the period from 03/2002 to 03/2004, which was within 26 months. Under administrative finality, 05/2002 was the earliest month that should have been revised. Because the CRT did not suppress the notice or override the system’s overpayment assessment per SI 04070.030F., the amount of income received in 03/2002 was counted in that month instead of 2 months later. Budget month income created an erroneous overpayment and the overpayment notice was issued on 04/30/2004 because the CRT did not follow correct procedures.

On 06/15/05, the error was discovered and an affirmative action in writing was established to correct the error. The CR input the excess income, suppressed the automated notice and waited for the record to compute the overpayment. Then the CR used the force due procedure (PS M02) to change the due amount on the SSR to the original amount so that the overpayment was zero in the 2 months which were barred to correction. Once the CR saw that the record was placed in PS M02, he terminated the record and established a start date record with the correct information and overpayment. He later sent a manual notice explaining the decision and the amount of the overpayment.

Since the error was discovered within 2 years of the initial overpayment notice date, the erroneous initial overpayment decision of 04/30/2004 was corrected and the correct overpayment was established on the record.

C. Policy - Underpayments

1. Late Discovery of an Event Causing an Underpayment

The rules regarding late discovery of an event causing overpayment apply to late discovery of an event causing underpayment (see SI 04070.070A.1.).

2. Underpayment Determination

Unlike overpayment determinations, an underpayment determination is rarely made separately from the revised determination giving rise to the underpayment. It is, however, an initial determination that can be reopened and revised in the same manner as an overpayment determination. (See SI 04070.070A.3.).

Before deciding to reopen an underpayment determination, be sure to determine whether the determination is within 1 or 2 years from the date of the initial underpayment determination. If good cause is established and the initial underpayment determination was made within 2 years, the period affected within the initial underpayment determination can be reopened in its entirety.

If the initial underpayment determination was made over 1 or 2 years from the date of the discovery of the error, the initial underpayment determination can not be reopened and revised. However, we can reopen and revise any erroneous deemed determinations within 1 or 2 years from the date we discover the error depending on whether good cause exists to reopen.

Failure to release an underpayment is not an initial determination and is not subject to administrative finality. (See SI 04070.010B.)

D. Examples – Reopening Underpayment Determinations

1. Example - U/P Discovered Within 2 Years – Good Cause Found – Determination Reopened in its Entirety

On 06/21/2003, a CR completed an RZ and during the interview the CR determined that the claimant was in the incorrect living arrangement. As a result of the interview, it was determined that the claimant’s living arrangement changed from LA: D to LA: A in 07/2001. The CR made the changes and the initial underpayment determination notice was sent 06/28/2003.

On 05/28/2005, another CR realized that this initial determination that changed the living arrangement was not correct. The living arrangement should have remained the same (LA: D). The CR determined that there was an error on the face of this evidence. The problem now is whether this 06/28/2003 determination can be reopened and revised.

Since an underpayment or overpayment determination is an initial determination, any period covered by the initial determination is also subject to be reopened and revised. So, since an initial determination was made on 06/28/2003 that resulted in an underpayment and covered the period going back to 07/2001, and we later discovered the error on 05/28/2005 which is within the 2 year period from 06/28/2003, we can reopen and revise this case. Since the initial underpayment determination affects months going back to 07/2001, we can revise these months going back to 07/2001.

**NOTE**

If the CR had discovered this error after the two year period on 09/28/2005, then the CR can not reopen the initial underpayment determination made on 06/28/2003. However if any LA deemed determinations were incorrect, the CR could make a “revised determination” on this record going back to 10/01/2003. The CR can not go back to 07/2001 if the error was discovered outside of the 2 year time frame from the date of the initial underpayment determination. The CR would have to make a “revised determination” on 09/28/2005 and the furthest the CR could go back to correct this error would be 2 years to 10/01/2003.

For more information on deemed determinations, see SI 04070.005A.4., SI 04070.010A.3., and SI 04070.030A.SI 04070.030C.

2. Example – New Issues Identified Outside the 2 Year Period

On 02/21/2003, a CR completed a RZ and found out that the income listed on the SSI record was actually less than what had been established beginning 04/01/2002. The claimant was no longer working as of 04/01/2002. The CR made the corrections on the record going back to 04/01/2002, which resulted in an underpayment determination. The initial notice of underpayment was sent 02/27/2003.

On 05/07/2006, another CR conducted a RZ and discovered that the SSI claimant went back to work continuously again on 02/03/2004 but never reported his work activity.

Since this new and material evidence of wages was discovered after 2 years from the date of the initial underpayment determination of 02/27/2003, the CR may not reopen the initial underpayment determination. However, the CR can reopen the erroneous deemed determinations going back to 06/01/2004 to update and correct this record by posting the “new” wages to his record. The CR cannot go back to the date of the initial underpayment notice because the “new” wages weren’t discovered within 2 years from the date of the initial notice of underpayment.

3. Example – New Underpayment Issues

An initial underpayment notice was sent on 10/30/2002 and affected months going back to 01/2001. The claimant reported that they no longer had any resources as of 01/01/2001.

On 04/07/2003, the claimant also informed SSA that they were no longer working at one of his two part time jobs as of 01/01/2001. Because the recent report is new and material evidence that was not a part of the 10/30/2002 initial underpayment determination and creates a new underpayment issue, we can only go back and reopen and revise the income beginning in 05/2001 (1st deemed determination from 04/07/2003) up to the present date 04/07/2003.

The new revised underpayment notice was sent on 04/14/2003 and revised the initial SSI notice of underpayment dated 10/30/2002 because it contained new information regarding the claimant’s wages and created another underpayment.

E. References

1. Systems Records of Overpayments

GN 02201.001 – What is a Title II Overpayment

SM 01310.001 – Introduction to the SSI System’s Process for Overpayments/Underpayments

2. Netting Underpayments Against Overpayments

GN 02201.003 – Determining a Title II Overpayment Amount

SI 02101.000 – Title XVI (SSI) Underpayments

3. Netting/Offsetting Overpayments Against Underpayments

SI 02201.015 - SSI Netting/Offsetting Overpayments Against Underpayments


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