PROGRAM OPERATIONS MANUAL SYSTEMPart SI – Supplemental Security IncomeChapter 022 – OverpaymentsSubchapter 20 – Recovery Procedures for Supplemental Security Income OverpaymentsTransmittal No. 44, 01/08/2019
The Office of Financial Policy and Operations, Office of Payment and Recovery Policy made changes related to the Treasury Offset Program (TOP) resumption effort. Updates correct all instances of the term SSI MSSICS to read SSR Direct Update.
Summary of Changes
SI 02220.012 Collection of Title XVI Overpayments By Tax Refund Offset (TRO)
Updates made to this section include:
Update all instances where the term, MSSICS is used to correct and use the new name, Direct SSR Update,
Remove GN 02250.002 from section E.3 Request for Waiver as it does not provide instructions for Title XVI;
Add language to E.5, and F. 5 regarding the new process for continuing collection in TRO for debtors who default on installment agreements; and
Add a note to A.4 Pre-offset Notice; the NOTE: Effective May 12, 2017, SSA no longer refers Title II, Title VIII, or Title XVI debts that have a delinquency date of May 19, 2002 or earlier. There is no manual action necessary to prevent TOP selection because the selection is automated. Rather, our automated ECO system no longer selects these debts for external collection. Debts with a delinquency date after May 19, 2002 remain eligible for TOP referral.
The Debt Collection Improvement Act of 1996 (DCIA, P.L. 104-134) provided for the establishment of TOP. For a detailed description of the TOP process, see GN 02201.029.
Section 3720A of 31 USC permits the Social Security Administration (SSA) to recover delinquent Title XVI overpayments from former recipients by offsetting their Federal income tax refunds. The Foster Care Independence Act of 1999 (FCIA) authorizes the collection of delinquent Title XVI debts by administrative offset. For the new Title XVI policy on administrative offset, see SI
Selection of debts for recovery by TRO is made by the system each week from the Supplemental Security Record (SSR) and Numident records. All of the following criteria must apply:
The debtor is alive;
The debtor is not eligible for Supplemental Security Income (SSI) benefits;
The debt is $25 or more;
The debtor is not making regular installment payments, or efforts to recover the debt have terminated;
The debt is past-due, and
The debt is legally enforceable.
NOTE: Treasury conducts the TRO program through its automated system, TOP. TRO runs on a weekly selection/certification cycle. For more information about TOP, see GN 02201.029.
Once a debt is selected for TRO, SSA sends the debtor a 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, the TOP system retrieves any available address from the credit bureau via an automated address request operation run by central office. If the credit bureau provides a new address, SSA re-mails the pre-offset notice using the new address. If the credit bureau does not provide a new address, then the case will be removed from TOP.
NOTE: The automated address request operation is a separate project from the address requests made by the Debt Management Sections (DMS). The automated operation has no impact on the DMS requests.
The notice informs the debtor of the planned offset action and:
He or she owes a delinquent debt for a specified amount;
SSA plans to refer the debt to Treasury for TRO after 60 days have expired from the date on the notice;
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
The debtor may review and copy SSA's records about the debt.
ECO notices sent November 2015 are stored in the Online Notice Retrieval System (ORS). For ECO notices sent prior to November 2015, view the ECO master query. For additional information on the ECO master query, see MSOM DMS 014.007.
Effective May 12, 2017, SSA no longer refers Title II, Title VIII, or Title XVI debts that have a delinquency date of May 19, 2002 or earlier. There is no manual action necessary to prevent TOP selection because the selection is automated. Rather, our automated ECO system no longer selects these debts for external collection. Debts with a delinquency date after May 19, 2002 remain eligible for TOP referral.
For SSA TRO purposes, a past-due debt is one on which:
Payment is delinquent; and
No appeal/waiver request is pending.
A debt is delinquent on the later of the following dates:
The 60th day after the initial overpayment notice date; or
The date on which a decision on a protest (i.e. appeal or waiver request) is made.
A legally enforceable debt for SSA TRO purposes is a debt that still is subject to recovery from the debtor because:
It has not been paid in full; and
Recovery has not been waived; and
A bankruptcy petition is not currently pending in court; and
The debt was not previously discharged in bankruptcy; and
The debtor is alive; and
The debtor is responsible for the debt.
In the majority of cases, the debtor has previously been given ample opportunity to dispute the overpayment and/or repay the debt. However, there are situations where the selection for TRO may be erroneous because SSA's records contain outdated or incorrect information.
Additionally, although the time period to request reconsideration of the overpayment determination has passed, under the TRO process, the debtor has the right to object to the collection of a debt on the basis that all or part of the debt is not past-due or not legally enforceable (SI 02220.012B, SI 02220.012C, and SI 02220.012E.6.a). This section explains how to handle specific inquiries, protests and allegations prior to certification and offset.
If a request for an explanation of the overpayment is received, use the SSID to provide an explanation of the overpayment. Keep explanations generic to the extent possible. For example:
“You were no longer disabled as of 5/01 and continued to receive checks through 12/01.”
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.
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).
If a request for an explanation of TRO is received, explain that as indicated in the pre-offset notice, Congress passed a law which allows Treasury to withhold delinquent overpayments from Federal payments, including income tax refunds, due the overpaid person. If the debtor asks for an explanation of a delinquent or legally enforceable debt, see SI 02220.012B. and SI 02220.012C.
If a request for waiver is received, obtain an SSA-632-BK in accordance with current instructions in SI
Advise the debtor that TRO remains in effect until SSA receives a completed and signed SSA-632-BK (or its equivalent).
Input the waiver request only when
signed form (or other request) is received. The waiver request is input via the Direct SSR Update Waiver (UOWV) screen, see MSOM BUSSR 004.009 and SM
01311.423. Do not delay recording the request once written documentation is received. Process in accordance with SI
If the debtor asks to review records in person at the FO, obtain all systems queries and explain what the queries show.
If a request is made by telephone to the FO, set up an appointment for a review of the queries. Set the appointment well within the 60-day time limit the debtor has to submit evidence.
If a request is made to a PSC or TSC, advise the FO, via a priority MDW, to contact the debtor to set up an appointment. Annotate the MDW accordingly, “Urgent-TOP/Credit Bureau Case.”
In all situations, the FO will attempt to satisfy the review request without the need to obtain the paper claims folder. Obtain the folder, however, if the debtor indicates he/she wishes to review the folder (see SM 01201.205 for SSI folder recall).
If the folder review has not been conducted by the time of the TRO certification run, select EXPLANATION OF OVERPAYMENT on the Update Sequence Data (UOSD) screen in Direct SSR Update (See MSOM BUSSR
Certification occurs no less than 60 days after the date of the pre-offset notice.
If the debtor wants to repay the debt by monthly installments, to negotiate a reasonable monthly payment amount, follow SI 02220.025.
Advise the debtor that the debt will be left on the TRO file until the first payment is received and TRO will be prevented only as long as payments are made according to the agreement. However, upon default of one or more installment payments, the debt will be referred to Treasury for collection, where it will remain until the debt is satisfied. The debtor may subsequently offer to resume paying regular installments, the payments will be accepted and applied towards the debt but TRO will not be inactivated until the debt is paid in full.
Tell the debtor to send the installment payment to the address shown on the “Notice of Payment Due” form attached to the pre-offset notice. If the debtor does not have the form, provide the remittance address (MATPSC, P. O. Box 3430, Philadelphia, PA 19122-9985). Make sure that the name and claim number are on the remittance to ensure proper posting for the beneficiary. For instructions on adding the installment agreement G TAC, on the SSR, see SI 02220.025B.2, SM 01311.235, and MSOM BUSSR 004.008) .
If a debtor objects to collection of the debt, follow this procedure:
Under the law authorizing TRO, a debtor has the right to object to the collection of a debt on the basis that all or part of the debt is not past-due or not legally enforceable, see SI 02220.012B and SI
02220.012C. These types of protests require submission of evidence to rebut SSA's findings. However, there are some situations in which an effective protest to collection is based on only the debtor's current statement and information in the claims folder.
If an objection to collection is made, any evidence to support the objection must be received within 60 days from the date of the pre-offset notice. Examples of evidence that could rebut SSA's determination that a debt is past-due and legally enforceable include:
Copies of checks (front and back), money orders and/or receipts showing payments that reduced or eliminated the debt;
A waiver approval notice;
A waiver or reconsideration request (but no SSA determination regarding that request);
A report that the debtor is deceased; or
Bankruptcy documents showing that the debt was discharged or a bankruptcy petition is pending.
The above are not all-inclusive. Any evidence submitted must be evaluated.
If evidence to support objection to collection of the debt is received after 60 days from the date of the pre-offset notice, SSA will accept and review the evidence. However, the debt remains in the TRO program unless evaluation of the evidence proves the debt is not past-due and legally enforceable.
If an objection to collection is made:
Obtain a statement from the debtor that explains his/her reason(s) for objection to collection of the debt. DO NOT OBTAIN AN SSA-561-U2.
Accept any evidence the debtor submits.
Input appropriate suspend billing code on the UOSD screen, if necessary. (See MSOM BUSSR 004.006).
Obtain the claims folder, if available.
Obtain additional information if needed from the debtor prior to making a decision.
Review the evidence to determine if the debt is still past-due and legally enforceable as defined in SI 02220.012B and SI 02220.012C. If so, and the case can be adjudicated without additional information, send a notice to the debtor explaining why the debt is collectible (in whole or in part).
Notify the debtor of the final decision and delete the suspend billing code by completing the MSSICS Update Sequence Data (UOSD) screen (see MSOM BUSSR
IMPORTANT: Since a review to determine if a debt is past-due and legally enforceable is not an initial determination, do not include any appeal language in the decision notice.
If a debtor protests the fact and/or amount of a debt, obtain an SSID query (see SM 01601.000 ff).
If there is no indication that a request for review is pending, explain that the time period to appeal the overpayment determination has expired and, therefore, the determination is final. If good cause for extending the time limit is established, process the request as timely filed (see SI
If the debtor indicates that he/she has evidence that refutes SSA's records, explain that the debt will be referred to Treasury unless we receive the evidence within 60 days from the date of the pre-offset notice. Follow SI 02220.012E.6.a when the evidence is received.
If a debtor alleges nonreceipt of the overpayment check(s) or direct deposit payment(s), obtain an SSID query or Q query. If the query shows no record of nonreceipt 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 nonreceipt allegation at the time the initial overpayment notice was sent.
If the debtor insists that we provide a photocopy of the papercheck(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 nonreceipt allegation. Follow GN
02406.130 to process the nonreceipt 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 nonreceipt cases.
If the debtor makes a compromise offer, process in accordance with existing instructions in SI 02220.030 and sensitive instructions SI 02220.031.
If a debtor alleges never receiving the initial overpayment notice, proceed as follows:
Get a statement from the debtor regarding nonreceipt of the notice along with his/her current address.
Forward the material to the FO annotated “Necessary Action TOP/Credit Bureau Case Do Not Backlog.”
Explain to the debtor that TRO will continue to apply unless we can confirm his/her allegation.
If the claims folder is in the FO as the result of a folder review request (see SI 02220.012E.4. above), check for an undeliverable notice.
Review the claims folder to determine if the notice was returned as undeliverable. If so, verify that a subsequent notice was not mailed. If a subsequent notice was not mailed, the debtor has the right to a full administrative review process.
Send an initial overpayment notice to the debtor's current address, and overlay the old notice date with the new notice date using the UOSD screen in Direct SSR Update (see MSOM BUSSR 004.006). If the debtor is in the FO give him/her the initial overpayment notice.
If there is a disposition code on the SSR (e.g., B,D,G or M TAC), delete the old disposition code by completing the MSSICS Add/Change/Delete Overpayment Decisions (UODC) screen to avoid an excess decision. (See MSOM BUSSR 004.007.)
The new notice date will overlay the old and an unresolved overpayment will be computed.
The above actions will delete the debt from the TRO program until such time that the debt becomes delinquent and meets all TRO selection criteria.
If a subsequent notice was mailed, advise the debtor (by telephone, if necessary) of the date the new notice was sent. If there is no evidence to support the debtors allegations, advise the debtor (by telephone, if possible) accordingly. Explain that since there is no evidence the notice was returned as undeliverable by the post office, we must proceed on the assumption that the notice was received.
Document the folder with any debtor contact(s).
For a report of death, follow this procedure:
If the FO/TSC first finds out that a debtor is deceased, obtain proof of death as required by GN 00304.001. Post the death information to the SSR as well as information that the debt is no longer collectible (if appropriate).
If the PSC first finds out that a debtor is deceased, obtain proof of death as required by GN 00304.001. Input the death using the Stop Offset (TRSO) screen which is requested from the Debt Management Menu (DMMU) function number 12 - Treasury Offset Menu (TRMU) screen (see MSOM DMS 014.003).
Conduct any estate development in accordance with SI 02220.045.
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 UOSD screen (see MSOM BUSSR
004.006 and SM 01311.421) selecting BANKRUPTCY DECISION PENDING (and the system will build a suspend billing indicator of L). Process the petition or discharge order in accordance with SI 02220.040.
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/NT TAC) decision to prevent any further collection activity (see SM 01311.280). If a suspend billing code is present, delete the suspend billing code using the UOSD screen (See MSOM BUSSR
004.006 ). If the SSA debt is not listed on the discharge, make no system input. Process the case in accordance with SI 02220.040.
Some inquiries are received after certification of cases to Treasury or after 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.
If a debtor alleges that he/she filed a protest or requested waiver but never received a decision, obtain an SSID query and proceed as follows:
If there is an appeals code posted or a suspend billing code but no decision has been made and released:
Refund any amount offset by Treasury via A-OTP (see SM 01901.001 ff.). (This is known as an Agency Refund.) Notify Treasury about the refund. Input the Agency Refund using the Correct Offset Amount (TRCA) screen which is requested from the Debt Management Menu (DMMU) function number 12 - Treasury Offset Menu (TRMU) screen (see MSOM DMS 014.005).
For a terminated record, resolve the overpayment caused by the A-OTP with a Z TAC by completing the UOPD on the Direct SSR Update screen and selecting INCORRECT OVERPAYMENT. If the payment status is N, select UNCOLLECTABLE to post an N TAC. (See MSOM BUSSR 004.008.)
Request the DMS PSC transmit the appropriate suspend billing code, if necessary.
Look for an SSA-632-BK, a letter from the debtor or his/her representative or a Form SSA-795 in FO records or in the claims folder.
Process the waiver/protest in accordance with SI 02260.001.
If the waiver is approved, change the waiver request to a waiver approval by completing the Direct SSR Update Waiver (UOWV) screen and delete the suspend billing code, if present. (See MSOM BUSSR 004.007, G, & H.)
If the waiver is not approved, request refund of the overpayment. If the debtor cannot refund the overpayment, request that the debtor make installment payments. Document the waiver denial by changing the waiver request to a waiver denial by completing the UOWV screen. (See MSOM BUSSR 004.009.) If the debtor cannot make installment payments, change the waiver request to a waiver denial through the UOWV screen and add a B TAC by selecting UNWILLING/UNABLE TO REPAY (See MSOM BUSSR 004.008.) decision on the UOPD screen. (See MSOM BUSSR
The FO processes all TRO refunds via Automated One Time Payment (A-OTP) (see SM 01901.001 ff.).
If there a waiver was filed and previously denied as an unfavorable reconsideration or waiver decision:
Advise the debtor that since the issue is resolved, TRO was appropriate.
Provide debtor with a copy of the waiver decision, if requested.
Do not refund any amounts offset by Treasury.
If there are no records available but the debtor still indicates a prior protest was filed, look for an unprocessed SSA-632-BK, letter or SSA-795 in FO records or in the claims folder.
If documentation is found of a Waiver/Protest Filed before Certification or Offset:
Refund the offset amount via A-OTP (see SM 01901.001). This is known as an Agency Refund, and Treasury must be notified about the refund. Input the Agency Refund using the Correct Offset Amount (TRCA) screen which is requested from the Debt Management Menu (DMMU) function number 12 - Treasury Offset Menu (TRMU) screen (see MSOM DMS 014.005).
Request the DMS PSC to remove the refund from the SSR, if necessary.
Reestablish the debt (see SI 02220.012E.1.a.).
Add the pending request to the SSID by completing the UOWV screen in Direct SSR Update. (See MSOM BUSSR 004.009.)
If no documentation is found:
Advise the debtor that the records review failed to produce any evidence of a precertification protest or waiver.
Follow SI 02220.012F.4. if the debtor wishes to file a new waiver request.
If a request for waiver is received, proceed as follows:
Obtain a signed SSA-632-BK in accordance with current instructions in SI
02260.001. Input the request for waiver by completing the UOWV screen in Direct SSR Update. (See MSOM BUSSR 004.009.)
If TRO recouped the entire debt (i.e., the debt balance is zero), proceed as follows:
Consider waiver on the entire overpayment amount, and
Follow SI 02260.001 to process the waiver.
Advise the debtor that refund of the amount offset will be made only if the waiver is approved.
If waiver is approved (partially or fully), refund any monies due via A-OTP (see SM 01901.001.). Refund any amount offset by Treasury. This is known as an Agency Refund, and Treasury must be notified about the refund. Input the Agency Refund using the Correct Offset Amount (TRCA) screen which is requested from the Debt Management Menu (DMMU) function number 12 - Treasury Offset Menu (TRMU) screen (see MSOM DMS
If TRO partially recouped the debt, proceed as follows:
Consider waiver on the full overpayment amount.
Refund any monies due if waiver is approved (partially or fully). Refund any amount offset by Treasury. This is known as an Agency Refund, and Treasury must be notified about the refund. Input the Agency Refund using the Correct Offset Amount (TRCA) screen which is requested from the Debt Management Menu (DMMU) function number 12 - Treasury Offset Menu (TRMU) screen (see MSOM DMS 014.005).
When a request for installment payments is received, proceed as follows:
If an installment agreement was negotiated prior to certification and payment was made in accordance with that agreement
but Treasury offset still occurred, proceed as follows:
Refund the amount offset via A-OTP (see SM 01901.001), unless the debtor wants us to retain the money as payment toward the debt. If you refund the offset, input an Agency Refund using the Correct Offset Amount (TRCA) screen which is requested from the Debt Management Menu (DMMU) function number 12 - Treasury Offset Menu (TRMU) screen (see MSOM DMS 014.005).
Resolve the overpayment caused by the A-OTP. Complete the Direct SSR Input Overpayment Decisions (UOPD) screen by selecting INCORRECT OVERPAYMENT (Z TAC for terminated records) or UNCOLLECTABLE (N TAC for RIC G records). (See MSOM BUSSR 004.008.)
Add an installment agreement decision (G TAC) by completing the UOPD screen selecting RECOVER BY INSTALLMENTS. (See MSOM BUSSR
If the request is made after certification, proceed as follows:
Establish the agreement on the SSID per SI 02220.025.
Advise the debtor that offset may have already occurred or could still occur because SSA has no control over when Treasury conducts the TRO operation. Explain that SSA will not refund any offset monies (unless excess collection, see SI 02220.012F.6.). The installment agreement will apply to the debt balance remaining after offset.
Tell the debtor that SSA will activate TRO again if the debtor fails to make payment as promised, and upon default, the debt will remain on the TRO collection file until the balance is paid in full. The debtor may subsequently offer to make regular payments, the payments will be accepted and applied to the debt but TRO will not be inactivated until the debt is satisfied.
Excess collections occur when the total amount of voluntary payments and offsets exceed the debt amount (see SM 01310.420). For example, when a certified debtor enters into an installment agreement and fully refunds the debt after certification, an excess collection would occur if Treasury offsets for the full amount of the debt. This causes the system to compute an excess decision (see SM 01311.634).
Refund the excess collection to the TRO debtor using existing instructions for A-OTP (see SM 01901.001).
If the offset caused the excess collection, input an Agency Refund by using the Correct Offset Amount (TRCA) screen. This screen is requested from the Debt Management Menu (DMMU) function number 12 - Treasury Offset Menu (TRMU) screen (see MSOM DMS
If the voluntary remittance caused the excess collection, repay the excess to the debtor but Do Not Input an Agency Refund.
When couples file joint tax returns and the party who is not an SSA debtor wants to receive his/her portion of the refund, advise the person to the local IRS office at 1-800-829-1040. This is known as an “injured spouse claim” which IRS alone can adjudicate. Advise that any refund must be made by IRS, not SSA.
No systems input is necessary.
Following are case examples of common post-offset and post-certification situations.
A debtor contacted us in September and provided documents they believed to prove the debt does not exist. In November, the FO advised him that his case was reviewed and the overpayment does exist. The debtor has taken no further action until contacting us in early February to say that he has been refused a rapid refund.
Explain that our referral to Treasury for collection was proper. If there is a balance after the Treasury offset and he now wishes to pay that balance via full refund or negotiate an installment agreement, we will accept it. We will not return the offset monies to him unless the total repaid money exceeds the amount of the overpayment or he requests waiver which is subsequently approved.
A debtor calls us in March complaining that Treasury informed them that $500 of their 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 TRO 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.
The same situation in SI 02220.012.G.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.