BASIC (01-01)

VB 02507.025 Unrestricted Reopening — Similar Fault

A. INTRODUCTION

When fraud cannot be established (i.e., there is not a preponderance of evidence showing both knowledge and intent to defraud), we can reopen determinations in SVB cases at any time if there is “similar fault.” (See VB 02507.010A.6. for a definition of similar fault.)

For reopening under similar fault, we must establish by a preponderance of evidence that the claimant, beneficiary or other person knowingly did something wrong. However, we do not have to establish intent to defraud.

NOTE: Similar fault determinations are made only with regard to reopening initial determinations under administrative finality provisions. In criminal matters and matters concerning earnings record correction under the statute of limitations, there is no provision for a finding of similar fault.

B. PROCEDURE

1. When to Develop Similar Fault

The FO has the authority to decide whether to initiate similar fault development in SVB cases. Consider developing similar fault when:

  • A case of suspected fraud has been referred to OIFD and a determination has been made by that office that fraud does not exist because there is no intent to defraud; or

  • OIFD gives no reason for a determination that fraud does not exist; or

  • The case was not referred to OIFD for a potential fraud violation, but it meets all the criteria in VB 02507.025B.2.

2. Criteria to Establish Similar Fault

A similar fault finding must be supported by a preponderance of evidence as defined in GN 04020.010A.6. Such a finding may be appropriate under the following conditions:

  • The issue or event relating to the similar fault decision is material and will create a new or additional overpayment; and

  • If other benefit income is involved, there is a wide discrepancy between the new information and the information reported.

    NOTE: The term “wide discrepancy” cannot be defined in terms of money amount. It is a matter of judgement. It depends on how recently the other benefit was received, how long it was unreported or under-reported, as well as the amount and frequency, etc.

  • The SVB beneficiary knowingly completed an incorrect or incomplete report, knowingly concealed events or changes, or knowingly neglected to report events or changes that affect payment; and

  • The event (e.g., deportation of the SVB beneficiary, change in other benefit income, return to the United States, etc.) can and will be verified;

  • After verification, there is no doubt that the event or change applies to the SVB recipient.

CAUTION: Before initiating or continuing similar fault development, review VB 02507.025B.7. and VB 02507.025B.8. for situations where such development should be avoided or stopped. Also, in developing for similar fault, take into account any physical, mental, educational or linguistic limitation (including lack of facility with English) which would bring into question the individual's knowledge of the suspected wrongdoing.

3. Documentation

Prepare Form SSA-553 (Special Determination) in cases where similar fault has been developed. List the specific evidence available to support the determination that similar fault exists or does not exist.

4. Notification

  1. Notify the beneficiary of the revised determination (see VB 02507.050) and that similar fault exists.

  2. Include in the notice a discussion of the evidence used to make that determination.

  3. The beneficiary must also be advised of his/her appeal rights. (See VB 02507.050.)

5. Overpayments

  1. If similar fault is established and fraud does not exist, we:

    • Make the similar fault determination; then

    • Develop and recover the entire overpayment;

  2. The overpayment notice should cover the entire overpayment period.

6. Waiver

  1. If similar fault on the part of the recipient is established, the overpaid beneficiary should be found at fault for waiver purposes.

  2. If similar fault is found on the part of an individual other than the beneficiary, the beneficiary can still be found without fault for waiver purposes.

7. Excluding Similar Fault Development

In some SVB cases, similar fault development requires excess effort on the part of SSA for a small payoff or imposes undue hardship on the beneficiary. In those cases, similar fault development should not be started, or if started, it should be stopped. Examples of cases where similar fault