BASIC (08-06)

VB 02005.225 Recovery by Refund Through Installment Payments

A. Policy

SSA policy is to accept only full refunds and bona fide compromise settlements when debtors are not in current pay status, and not to accept installment agreements to obtain full refund when cross program recovery is already available. However, until cross program recovery procedures applicable to SVB under P.L. 108-203, the Social Security Protection Act of 2004 are in effect, an SVB debtor not currently qualified for SVB payments will be advised to:

  • Refund the SVB overpayment by check or money order for the full amount of the overpayment, or

  • Refund as much as he/she can and contact SSA to arrange full refund by monthly installments. See SI 02220.030 and SI 02220.031 for compromise settlement procedures.

B. Process

SVB overpayments to be refunded via monthly installments cannot be controlled by the Recovery and Collection of Overpayment Process (RECOOP). As a result, monthly bills will not be electronically generated and sent to the debtor.

The CPS/FO must manually control any SVB overpayment recovery by refund. This requires manual preparation and mailing of monthly billings and maintenance of the overpayment on the Debt Management System (DMS), including overpayments for which installment agreements have been prepared in the Foreign Service Post (FSP) (see VB 02005.225B.1.).

1. Installment Agreement Prepared in the FSP — FSP Action

Document the installment request (e.g., SSA-795) stipulating the rate the person agrees to pay monthly. Negotiate a rate that is as high as the debtor can manage based on a consideration of income, expenses and resources. Do not accept a repayment rate of less than $10 per month.

Use Section II of the SSA-2032-BK to determine financial ability to repay. However, this section of the form is not needed when the person offers to repay the overpayment in full in fewer than 37 months.

Instruct the person to send monthly installments to the FSP. Fax, and then mail, the documentation to the CPS, retaining a copy in the FSP. The mailed documentation will be placed in the veteran’s SVB file on arrival in the CPS.

Secure the first installment. The CPS will annotate the faxed copy of the documentation showing action taken to diary for the due date and bill the debtor 20 days prior to the next due date, including a return envelope to the FSP.

EXAMPLE: On June 4, Mr. Rodriguez requests to refund an SVB overpayment of $300 by installments of $10 per month beginning July. The FSP documents the refund agreement on an SSA 5002 and faxes a copy to the CPS. The CPS mails a bill to Mr. Rodriguez on June 11 and diaries for July 1 for receipt of the first $10 installment.

EXAMPLE: On May 20, a debtor comes to the FSP after receiving a letter informing him of a $600 SVB overpayment. He is currently in nonpayment status and agrees to refund the overpayment by remitting $50 monthly (the peso to dollar currency exchange rate used is the one applicable on the date the debtor makes the installment payment). The FSP obtains a signed statement containing the agreed upon refund schedule. The first installment of 2,500 pesos, (approximately $50) is paid during this visit. The FSP issues a receipt showing the following:

  • Name and SSN

  • “SVB Overpayment”

  • Date refund received

  • 2,500 pesos received;

  • Converts to $50.46 U.S. dollars (the 5/20 conversion rate of 1 peso=0.02018 U.S. dollar. The SVB Intranet currency conversion option is used.)

The FSP faxes a copy of the agreement, along with a copy of the receipt provided, to the CPS. The CPS sends a bill for the next installment on June 1 and diaries for receipt on June 20.

See VB 02005.200F. for a discussion of the FSP remittance processing and actions.

2. Installment Agreement Prepared in the FSP—CPS Action

Schedule and diary for the installment payments on a regular monthly basis, billing the debtor 20 days prior to the expected receipt date. The procedures in VB 02005.200F.1. will be used for processing remittances through the FSP.

3. Installment Agreement Prepared in CPS/FO

The installment agreement will be prepared as in VB 02005.225B.1. and the first installment collected.

As noted in VB 02005.200F.3., the instructions in SI 02220.025 (for non-RECOOP p