PROGRAM OPERATIONS MANUAL SYSTEMPart SI – Supplemental Security IncomeChapter 022 – OverpaymentsSubchapter 20 – Recovery Procedures for Supplemental Security Income OverpaymentsTransmittal No. 140, 05/08/2026
Audience
Originating Component
ISP
Effective Date
Upon Receipt
Background
These sections outline the policy and procedures for recovering Title XVI overpayments by adjustment or withholding, typically at a rate of 10 percent of the federal benefit rate (FBR), though the rate may be higher or lower in certain cases. Recovery is usually made by adjusting future or past-due SSI payments to the individual or their eligible spouse. The procedures also address exceptions, appeal rights, and special circumstances that may affect the rate or method of recovery.
Summary of Changes
SI 02220.015 Supplemental Security Income Overpayment - Recovery By Adjustment
We added citations of law and regulations, renamed subsection titles and clarified policies.
In subsection A added a new introduction section.
In subsection B, B.3 and B.4 updated title and provide clarity.
In subsection C References removed from the bottom of the page and made changes for clarity.
In subsection C.3 the couples section is updated for better understanding.
We moved the netting section, expanded on the explanation and added a subsection D
SI 02220.016 Supplemental Security Income Overpayment - The Ten Percent Rate of Adjustment
We added citations of law and regulations, renamed subsection titles, updated case examples of overpayment recovery by adjustment.
In subsection A we added an Introductions.
In subsection B and Subsection C reorganized policy and procedures.
In subsection C. e and f differentiated when 100 percent withholding was required or may be appropriate.
In subsection C.3 Notification requirements changed to exclude "willfull misrepresentation of material fact".
In subsection D the examples updated with more recent dates and FBR's.
Removed example #5 of 100 withholding for DCN.
CITATIONS:
When we have overpaid an individual who is eligible for Supplemental Security Income (SSI), we must adjust the future payments or past-due payments due to the individual or their eligible spouse to recover the overpayment if waiver of adjustment or recovery is not applicable, refer to SI 02220.015B.1.
Following a determination that an overpayment exists, and after we have issued notice of overpayment to the overpaid individual or their eligible spouse, we must recover the overpayment by adjusting future payments to the overpaid individual or their eligible spouse and adjust any past-due payment if certain conditions are met, refer to SI 02220.015B.1.b unless we approve a request for waiver.
We adjust payment by withholding future payments to recover an overpayment if:
the overpaid individual has not refunded the overpayment;
eligibility continues;
there is no approved or pending overpayment reconsideration request, refer to SI 02220.001A.2 and SI 02220.017A.1 .
there is no approved overpayment waiver request that fully waives recovery of the overpayment from the overpaid individual, refer to SI 02220.001A.2 ; and
there is no pending waiver request, or if a waiver request is pending, an initial determination has been made to deny the request, refer to SI 02220.001A.2.
We will recover overpayments of any federally administered State supplement before we recover a federal SSI overpayment for the same period.
If a spouse who was previously ineligible for SSI becomes eligible and is owed an underpayment, we will not use their underpayment to recover or reduce their spouse’s overpayment if the overpayment happened outside the new couple computation period. However, there are two exceptions:
The underpaid spouse agrees to let us use their underpayments to offset their spouse's overpayment, and
The overpaid spouse has exhausted all appeal rights.
The overpaid spouse is considered to have exhausted appeal rights if:
there is no pending request for waiver; and
there is no pending request for reconsideration or other appeal of the overpayment determination, or the time period for filing an appeal has passed and there is no pending request for an extension due to good cause.
Example of overpayment to one member of new couple outside of the couple computation period
Jennifer Jones and Jason House each receive SSI as individuals. Jennifer and Jason marry, report the marriage to us, and become an SSI eligible couple. Jennifer is due an underpayment of $1,500.00 for the period prior to becoming an SSI couple. Jason is overpaid by $1,000.00. We will not apply Jennifer's underpayment to recover Jason's overpayment unless Jennifer agrees to allow us to use their underpayment to offset Jason's overpayment, and Jason has exhausted appeal rights.
Once an overpayment has been assessed, we use any underpayment due an individual to reduce (i.e., recover) any outstanding overpayment owed by that individual if we have issued an initial overpayment notice to the individual, refer to SI 02201.015, SM 01311.170.
If the overpaid individual is deceased, refer to SI 02101.003 and SI 02220.045.
In most cases, the SSI claims system will automatically offset an underpayment against an outstanding overpayment balance when there is a D TAC (recover by check adjustment) on the Supplemental Security Record (SSR). Refer to SM 01311.170.
If the underpayment amount exceeds the overpayment balance, issue the remainder of the underpayment to the individual.
In cases that require manual offsetting:
If an overpayment has been determined (i.e., after netting, refer to SI 02220.015B.5. and SI 02201.015B.), and
The overpaid individual has received an initial overpayment notice and the appeal period has expired SI 02201.015C. ; SM 01311.170 , then
Use any subsequent underpayment to offset the overpayment balance.
If one member of an eligible couple is underpaid and the other member is overpaid, release the underpayment unless the underpaid member agrees to use their underpayment to offset their spouse's overpayment and the overpaid spouse has exhausted appeal rights. Refer to SI 02201.010B.4., SI 02201.015A.4., and SI 02201.022.
In almost all cases the system replaces an inappropriate type of action code (TAC) with the correct one. For the few cases that require manual resolution of a B8 diary, refer to SM 01311.638. For a B9 diary refer to SM 01311.639 and process accordingly.
Prepare and issue the notice, and
Input the notice date.
Determine the uncollected balance of eachD TAC on the record.
If none of the D TACs have been recovered, replace each D TAC with a G TAC equal to the uncollected balance. The recovery rate for the G TAC will be equal to the uncollected balance.
If the D TAC(s) have been partially recovered, input a D TAC equal to the recovered amount and a G TAC equal to the uncollected balance. The recovery rate for the G TAC will be equal to the uncollected balance.
For instructions to manually place an overpaid record under RECOOP control refer to SM 01311.235.
Netting is not a method of overpayment recovery; rather, it is the process used to determine whether, as part of the payment computation process, an under- or overpayment exists. It is the procedure we use to determine the amount of an underpayment or the outstanding overpayment balance due. Netting is a part of the payment computation process. We compare excess payments and additional amounts due for the period under review, refer to SI 02201.005C.6. The result is the net overpayment or underpayment amount due for the period under review.
In most cases, the system automatically computes the net amount for all periods where there are excess payments and additional amounts due for the period(s) under review. If the net result is an overpayment, the system will create an overpayment sequence for the period under review. The system will, in most cases, notify the individual of the net result either by sending a post eligibility notice and issuing an underpayment or by sending an initial overpayment notice. If the system cannot perform automated netting and cannot send an automated notice, it will set a B3 diary (unresolved overpayment indicator), which the field office (FO) must process manually unless the case is under Recovery and Collection of Overpayment Process (RECOOP). For instructions on resolving B3 diaries, refer to SM 01311.633; for cases that are excluded from automated netting refer to SM 01311.160B.1, and for overpayment sequence processing see SM 01310.200.
To perform Manual Netting, refer to SM 01311.165B.
Following a determination that an overpayment exists and after we have issued notice of the overpayment to the overpaid individual or their eligible spouse, we must recover the overpayment by adjusting future Supplemental Security Income (SSI) payments to the overpaid individual or their eligible spouse, and adjust any past-due payments if certain conditions are met, unless we approve a request for a waiver. If waiver of adjustment or recovery is not applicable (see SI 02220.015B.1), we will recover the overpayment at the lesser of the monthly SSI payment or 10 percent of the individual’s total monthly income, unless the individual requests a different rate of recovery or another exception applies. For additional information refer to SI 02220.016C.2 in this section.
Compute the rate of adjustment:
For an individual: the initial overpayment notice, whether generated by the automated overpayment notice system (AONS) or manually produced, proposes a rate of adjustment of the monthly SSI payment that is the lesser of:
Ten percent of the sum of the overpaid individual's countable income used to compute the current payment, and the Federal and State amounts due the individual for the current computation month (CCM); or
The individual's actual monthly payment amount.
For an explanation of the income used in the payment computation refer to SI 02005.001.
For a member of an eligible couple propose a rate of adjustment of the monthly SSI payment that is the lesser of:
Ten percent of the sum of one-half of the couple's monthly income used to compute the current payment, and the Federal and State amounts due the overpaid member of the couple for the CCM; or
The actual monthly amount for the overpaid member.
Use this computation to calculate the proper adjustment rate whether one or both members are overpaid.
NOTE: In spouse-to-spouse deeming, the computation compares the payment the member would be due as an individual and the payment due as an eligible couple. The ten percent adjustment rate changes as the basis for payment changes from individual computation to couple computation. This can produce unusual swings in the rate of adjustment, especially when the Livermore rules apply, refer to SI 01320.430.
For individuals and couples: the budget month income will not equal the income used to compute the monthly payment when cost of living (COLA) coordination applies, refer to SI 02005.010.
Apply the ten percent only to cases where the payment status is C01 (current pay).
Change the rate to ten percent when:
An overpaid individual returns to current pay status following a period of ineligibility or suspension, and
The withholding rate established was higher than ten percent.
If the overpaid individual is subject to the $30 payment limit for Federal living arrangement (FLA) D do not enforce withholding. Accept any refund(s) offered. Complete the MSSICS Overpayment Decisions (UOPD) screen by selecting RECOVER BY CHECK ADJUSTMENT. This will build a Recovery by Check Adjustment Decision (D TAC) in the Overpayment Decision Date (OPDD) segment. Adjustment may begin with the first month the individual is no longer subject to the payment limitation for FLA D, refer to SM 01310.400 and SM 01311.105B. This also allows the withholding of underpayments due to individuals in FLA D for months earlier than the current calendar month in order to reduce outstanding overpayments, refer to SM 01310.410.
If recovery by adjustment is not possible because the individual is not in current pay, the ten percent rate of adjustment is not applicable. Negotiate the rate of recovery through an installment agreement if the overpaid individual is not currently receiving a Title II benefit, refer to SI 02220.025B.2. If the individual is currently receiving a Title II benefit, cross program recovery (CPR) may be applicable, refer to SI 02220.020.
If the overpaid individual requests a rate of adjustment that is higher or lower than ten percent, refer to SI 02220.026.
When the overpaid individual received payments under the conditional payment provision propose a rate of recovery of up to 100 percent. Refer to SI 01150.203A.2.h. Negotiate a lower rate if the 100 percent rate would mean the individual is unable to afford ordinary and necessary living expenses (food, clothing, shelter, and medical care).
There are a number of other exceptions, though not all relate directly to overpayments. The following are situations when 100 percent withholding is required:
Offsetting because the overpaid individual used burial funds for another purpose, per SI 01130.410.G, SI 01130.410C.5, and SM 01311.310.
The Office of the Inspector General (OIG) Office of Investigations or the Department of Justice (DOJ) has determined that the overpayment was the result of fraud, per SI 04070.020, GN 02201.055 and GN 04123.005.
The Claims Specialist (CS) or higher makes a determination that the liable person or their deemor committed similar fault, misrepresentation, or concealment of material information, refer to GN 04060.055 and SI 04070.020.
A similar fault determination must be a formal written determination prepared by a CS or higher. Consider all the factors listed in SI 04070.020B when making your determination.
The following are situations where withholding at the rate of 100 percent may be appropriate:
The U.S. Department of the Treasury has determined that the individual received both the original and replacement SSI payments, resulting in a double check negotiation (DCN) overpayment, refer to GN 02250.021 and GN 02406.300.
A Civil Monetary Penalty (CMP) is imposed, refer to GN 02230.050.
Penalty assessments and deductions are distinct issues from adjustments to recover overpayments. Collect any reporting penalty assessed prior to recovering an overpayment. Refer to SM 01311.305, SI 02301.105.A, and MS 00304.016. To determine if 100 percent withholding may be appropriate, refer to GN 02250.021.
Notify the overpaid individual in a Notice of Planned Action that the overpayment recovery will be at the 100 percent rate and the reason why we must withhold 100 percent; and
Increase the recovery rate to 100 percent.
Toni Doze is due a Federal SSI payment of $994.00 (the FBR for April 2026). Toni has no other income. The proposed recovery rate is $99.40.
Dollar Amount
Recovery Rate Calculation
$994.00
SSI Payment
$0
Countable Income
Total
$994.00 ÷ 10 =
$99.40 is the recovery rate
Dan Shaw is in FLA-B, subject to a one-third reduction (VTR) of $331.33. Dan is due a Federal SSI payment of $662.67 for May 2026. The proposed recovery rate is $99.40
$662.67
$331.33
Countable Income (VTR)
Don Acuna is due a Federal SSI payment of $50.00 for April 2026 based on the budget month's countable income of $944.00. Because 10 percent of the sum of the countable income and the amount due exceeds the SSI payment, the proposed reduction rate will be $50.00 (the entire SSI payment).
$50.00
$944.00
$994.00 ÷ 10 = $99.40 which is greater than the SSI payment
$50.00 is the recovery rate
John and Jane Boswell are considered an eligible couple for SSI. In April 2026, each is due an SSI payment of $745.50, and a federally administered optional State supplement (OSS) of $100.00. Each has an outstanding overpayment. The proposed monthly recovery rate cannot exceed $84.55 each. Although the couple rate is $1691.00, the recovery rate is determined separately for each individual.
Dollar amount
Rate of Recovery
$745.50
$100.00
OSS Payment
$845.50
Individual SSI and OSS combined payment amount
$845.50 ÷ 10 =
$84.55 is the recovery rate because it is less than the combined SSI and OSS payment