Identification Number:
GN 02230 TN 16
Intended Audience:See Transmittal Sheet
Originating Office:DCBFM OFPO
Title:Special Overpayment Procedures
Type:POMS Transmittals
Program:All Programs
Link To Reference:
 

PROGRAM OPERATIONS MANUAL SYSTEM
Part GN – General
Chapter 022 – Overpayments
Subchapter 30 – Special Overpayment Procedures
Transmittal No. 16, 09/11/2020

Audience

PSC: BA, CCRE, CS, DCR, DS, LDCR, LDS, PETE, RECONR, SCPS, TSA, TST;
OCO-OEIO: BTE, CR, EIE, FCR, PETL, RECONR, RECOVR;
OCO-ODO: BTE, CCE, CST, CTE, CTE TE, DSE, PAS, PETE, PETL, RC, RCOVTA, RECOVR;
FO/TSC: CS, CS TII, CS TXVI, CSR, CTE, DRT, FR, OA, OS, RR, TA, TSC-CSR;

Originating Component

OFPO

Effective Date

Upon Receipt

Background

This is a Quick Action Transmittal. These revisions do not change or introduce new policy or procedure.

Summary of Changes

GN 02230.050 Civil Monetary Penalty (CMP) - Overview

Changed the Office of Counsel to the Inspector General (OCIG) to the Office of the Counsel for Investigations Enforcement (OCIE) throughout the document.

GN 02230.050 Civil Monetary Penalty (CMP) - Overview

A. Background of CMP

SSA refers a person suspected of fraud or other misconduct to the Office of the Inspector General (OIG).

If OIG investigates and validates that fraud or other misconduct occurred, it refers the matter to the U.S. Attorney to consider an action for civil or criminal false statements and related misconduct.

If the U.S. Attorney declines to prosecute and issues the formal “declination” required by statute, OIG may refer the case to its Office of the Counsel for Investigations Enforcement (OCIE) to consider imposing a Civil Monetary Penalty (CMP) and any assessment.

If OCIE determines the case meets the legal requirements for a CMP, it contacts the individual by mail to advise it is considering a CMP and to request the individual to provide information regarding his or her financial circumstances.

If the individual responds, OCIE may attempt to negotiate a reasonable settlement, in light of the individual’s financial circumstances, the seriousness of the offense, and other aggravating or mitigating circumstances specified by Congress in the statute.

If the person does not respond, OCIE sends the individual a second notice that addresses any known information about the individual’s financial and other circumstances and proposes to impose the CMP. The notice advises where the individual should send payment and how to request review of the fine.

Thereafter, the individual has 60 days to seek review of the proposed action and request a hearing by the U.S. Department of Health and Human Services’ (HHS) Departmental Appeals Board (DAB) in Washington, D.C.

If the individual does not seek review within 60 days, OCIE relies upon the record information that is available and notifies the individual of its decision to impose a CMP. The notice imposing a CMP includes a demand for payment.

B. Policy regarding CMP

We do not initiate CMP actions. OCIE receives a referral of suspected fraud or other misconduct from within SSA or from the 1-800 Fraud Hotline and initiates action.

The SSA Commissioner delegated the authority to pursue and impose CMPs to OIG, and OIG re-delegated the authority to OCIE. SSA Operations is responsible for posting the CMP on the MBR and/or SSR and for collecting CMPs.

C. SSA authority to impose and collect CMPs

CMPs can have two parts the penalty and the assessment.

1. Penalty for CMP

The Social Security Act authorizes the Commissioner to impose a penalty of not more than $8,606 for each:

  • False or misleading statement or representation of fact that is material to determining an initial or continuing right to, or amount of, monthly benefits or payments under Title II, Title XVI, or Title VIII of the Act;

  • Misuse of benefits by representative payees; or

  • Knowing omission or withholding disclosure of material fact to SSA.

NOTE: The Federal Civil Penalties Inflation Adjustment Act Improvement Act of 2015 established an annual requirement to update penalties for inflation. The table shows historical CMP penalty amounts.

Year

Penalty Amount

2017 and before

Up to $5,000

2018

Up to $8,249

2019 Up to $8,457
2020 Up to $8,606

2. Assessment of CMP

The Act authorizes the Commissioner to impose an assessment in lieu of damages. The assessment represents the overpayment that occurred as a result of the fraud or other misconduct. The law authorizes the Commissioner to impose an assessment that is equal to or up to twice the amount of the overpayment that resulted from the false or misleading statement, representation, omission of fact, or misuse of benefits.

NOTE: OCIE may initiate a proceeding to impose a penalty and assessment within 6 years of the date the violation occurred.

3. Collection authority

Operations is responsible for posting the CMP on the MBR and/or SSR and for collecting the debt once imposed and final. Regulations allow SSA to pursue recovery of CMPs by:

  • Withholding monthly Title II benefits;

  • Withholding monthly Title XVI benefits;

  • Withholding monthly Title VIII benefits;

  • Billing and follow-up; and

  • Initiating a civil action.

IMPORTANT: In the future, SSA may also apply the following collection methods:

  • Reducing tax refunds to which the person is entitled;

  • Using Administrative Wage Garnishment (AWG), Administrative Offset (AO), Federal Salary Offset (FSO), and credit bureau reporting; and/or

  • Charging interest and fees associated with collecting these debts.

D. Processing the CMP

1. OIG processing

The Commissioner delegated OIG authority to pursue and impose CMPs.

  • CMP proceeding begins when SSA or an external source refers a suspected case of fraud or other misconduct to OIG’s Office of Investigations (OI). If the U.S. Attorney finds evidence of fraud or other misconduct but declines to prosecute the case as a criminal or civil action, OI will refer the case to OCIE. OCIE considers imposing a CMP. See also, referring cases to OIG for possible fraud investigation, see GN 04110.000.

  • The U.S. Attorney declines to prosecute the case and OCIE determines the case meets the legal requirements to impose a CMP, it contacts the individual via certified mail to advise it is considering a CMP. OCIE issues the following letters:

    Notice letter – OCIE advises the individual it is considering imposing a CMP and provides 30 days to respond with financial and other relevant information before it issues a formal decision to impose the CMP.

    Demand letter – OCIE proposes to impose a CMP and identifies the amount of the penalty and any assessment. The individual has 60 days to request a hearing to review the proposal. If the individual does not request a hearing after 60 days, the CMP becomes final.

    Default letter – If the individual fails to respond timely to the demand letter by requesting a hearing, by paying the proposed CMP, or by pursuing a settlement agreement with OCIE, OCIE informs him or her that he or she owes the CMP and must send SSA payment or SSA will initiate collection efforts.

  • If the individual responds to any of the letters, OCIE may attempt to negotiate a reasonable settlement depending on the individual’s financial circumstances, the seriousness of the offense(s), etc.

  • After completing any administrative and judicial review and assuming the final decision sustains the CMP, OCIE issues a final letter to the individual that summarizes the outcome and advises of the need and method to satisfy the debt. OCIE provides a copy of this letter to Operations.

    NOTE: OCIE prepares these letters. The letters are not stored in the Online Retrieval System (ORS).

2. How the CMPs can be imposed

a. Settlement agreement

OCIE’s negotiations with the individual result in a mutually agreed upon amount and repayment plan to pay off the CMP.

b. Default

OCIE prepares and issues the notice and demand letters, and the individual does not respond. OCIE issues a letter imposing the CMP after the end of the notice and demand periods required to satisfy the individual’s due process rights.

c. HHS Administrative Law Judge (ALJ) decision

The individual seeks review of OIG’s demand letter proposing to impose a CMP, the HHS ALJ rules in favor of SSA/OIG, and the individual does not seek further review.

d. HHS DAB decision

The individual or OCIE appeal the HHS ALJ’s decision and:

  • The DAB issues a Recommended Decision in SSA/OIG’s favor;

  • The Commissioner declines to reverse or modify the DAB’s Recommended Decision within 60 days;

  • The DAB issues correspondence identifying the Recommended Decision as the Commissioner’s final decision; and

  • The individual does not seek review by a U.S. Court of Appeals within 60 days.

e. Commissioner decision

The Commissioner reverses or modifies the DAB’s Recommended Decision within 60 days and rules in SSA/OIG’s favor, and the individual does not seek review by a U.S. Court of Appeals within 60 days of the DAB publishing the Commissioner’s decision as final; or

f. U.S. Court of Appeals decision

The individual or OCIE appeals the final administrative decision (DAB’s or Commissioner’s decision) to the appropriate U.S. Court of Appeals and rules in SSA/OIG’s favor.

After completing all opportunities for administrative and judicial review, OCIE or the Office of General Counsel (OGC) forwards the final decision imposing or sustaining the CMP via e-mail to the SSA headquarters Deputy Commissioner of Operations contact in the Office of Public Service and Operations Support (DCO/OPSOS). OCIE or OGC provides a courtesy copy of the final decision imposing or sustaining the CMP to the SSA office that initially referred the case to OIG, if available.

NOTE: The courtesy copy is information only. No action is necessary. OPSOS forwards the documents supporting the CMP to the designated Regional Office (RO) or Program Service Center (PSC) CMP contact for processing.

E. SSA processing of CMP

OCIE forwards the case information to the DCO/OPSOS/CMP Headquarters coordinator for all CMPs.

OGC may forward the case if the CMP became final at the HHS ALJ level or above.

SSA components cannot directly refer to OCIE to consider a CMP. To refer cases to OIG for possible fraud investigation, see GN 04110.000.

  1. 1. 

    Operations is responsible for posting the CMP on the MBR and/or SSR and for collecting the CMP.

  2. 2. 

    The DCO/OPSOS/CMP coordinator based on the information, forwards the case to the RO or PSC contact that will be responsible for posting and for tracking the CMP case.

  3. 3. 

    See a list of the RO/PSC CMP contacts and the DCO/OPSOS/CMP coordinators in GN 02604.420E.

F. How to assign CMPs to the RO or PSC

  1. 1. 

    DCO/OPSOS/CMP coordinator forwards the CMPs to the RO or PSC CMP contacts for processing based on where the CMP will be posted (MBR/SSR), regardless of the program in which the violation occurred.

  2. 2. 

    PSC, according to MBR jurisdiction, receives the CMP documentation from the CMP coordinator to post the CMP to the MBR or ROAR record.

  3. 3. 

    RO, according to the individual’s residence location (mailing address on the OCIE correspondence), receives the CMP documentation from the CMP coordinator to post the CMP to the SSR.

    EXAMPLE:

    • CMP imposed for Title II violation

    • Person has no MBR

    • Person is in current pay in Title XVI

    • CMP should post to the SSR

    • CMP is sent to RO for processing/posting

  4. 4. 

    A CMP case may require action on both the MBR and SSR (e.g., CMP posted to SSR and Remarks and/or Special Messages added to the MBR and Debt Management System (DMS)). The CMP coordinator should send the case to both the PSC and RO CMP contacts. The first addressee on the route slip is responsible for posting the CMP and adding Remarks/Special Messages to that record. The subsequent addressee(s) is responsible for adding Remarks/Special Messages on other program records involved. Coordinate actions so all records involved in the posting are documented.

    EXAMPLE:

    • CMP imposed on representative payee of Title XVI recipient

    • Representative payee has no MBR or SSR

    • CMPs should post to a Title II ROAR record and remarks entered in DMS, Title XVI recipient’s SSR, and the Representative Payee System (RPS)

    • The CMP is sent to the PSC to establish the ROAR and to enter remarks in DMS, and also sent to the RO to enter remarks on the recipient’s SSR and RPS.

G. CMP collection

1. Who is responsible for paying the CMP?

The individual named in the imposition of the CMP is solely responsible for paying the CMP debt. If the person dies, SSA should seek payment from that individual’s estate. For information on estate development procedures, see GN 02230.060H.

2. Collection of a CMP from auxiliaries

The individual named in the imposition of the CMP is solely responsible for paying the CMP debt.

If the CMP is posted to a record containing auxiliaries,

  • Do not collect the CMP from the auxiliaries.

  • Do not transfer the debt to the auxiliaries’ records.

For information on CMP auxiliary procedures, see GN 02230.060E.

3. Collection of a CMP from an underpayment

Apply any underpayment due the debtor toward the recovery of a CMP. For information on CMP underpayment procedures, see GN 02230.060D.

4. Rate of withholding from benefits under Title II and Title XVI

When a signed settlement agreement exists, withhold at the rate specified in agreement between OCIE and individual.

When no settlement agreement exists and the CMP is imposed by default, the withholding rate from current benefits or payments must be 100 percent.

5. Debtor seeks to pay at a rate different than rate in signed settlement

If the debtor previously signed a settlement agreement with OCIE and requests a change in the monthly payment amount stated in the settlement agreement, use the form SSA-640 (Financial Disclosure for CMP Debts) to obtain the following information from the debtor:

  • Identifying information (name, address, SSN)

  • Number of dependents

  • Employer information (debtor and spouse)

  • Monthly income (debtor and spouse)

  • Sources of monthly income (salary, bonuses, rental income, worker’s compensation, Federal or state benefits/payments, interest, etc)

  • Monthly expenses (rent, utilities, groceries, transportation, medical, credit cards, loans payable to banks, insurance premiums, etc.)

  • List and value of assets (bank accounts, stocks, insurance policies, autos, public assistance, etc.)

  • List of liabilities, unpaid balance (mortgage, auto, credit cards, taxes owed, judgments)

Once received, the RO CMP Contact will verify that the information is correct and properly documented, then forward the information to ^DCO OPSOS CMP. The Office Of Public Service and Operations Support (OPSOS) will review the information and the Associate Commissioner of OPSOS will make a decision on whether or not we will approve the SSA-640 request. After a decision is made, OPSOS will notify the RO and the RO will process the request accordingly, including sending the debtor a decision notice.

6. Compromise CMP offer

During the CMP process and before the CMP became final, the person had the opportunity to request a compromise of the CMP amount OCIE intended to impose. Only the Commissioner of SSA has authority to compromise the amount of the CMP debt after it is imposed. No further delegation of authority exists. For information on compromise offer procedures, see GN 02230.060G.

7. Installment agreements

In the future, if the Commissioner authorizes Operations to consider CMP debtors’ requests to pay in installments and a CMP was imposed by default, the debtor may request to pay the CMP in installments. Currently, only the Commissioner can approve such requests. However, the Agency is not prohibited from accepting any payment(s) a CMP debtor offers if no employee suggests that accepting less than the full amount of the debt created an installment agreement.

8. Waiver of CMPs

CMPs are not subject to waiver. CMPs are fines resulting from fraud and other misconduct; the regulations do not permit waiver of fines arising from fraud and other misconduct.

9. Administrative sanctions for CMP

To avoid interfering with other proceedings, SSA does not pursue administrative sanctions until OIG determines whether it will pursue criminal, civil, or CMP action. OCIE notifies the referring SSA office of the decision whether to pursue a CMP and provide a courtesy copy to the RO.

The agency should continue to defer pursuit of the sanction while any CMP proceeding is ongoing. If appropriate, SSA can pursue administrative actions.

See Details

For administrative sanctions when there is a CMP proceeding see

10. Bankruptcy and CMPs

CMPs are considered fines (not overpayments), which are not subject to discharge in bankruptcy. If the CMP includes an assessment, contact the Regional Chief Counsel. See procedure for CMP debtors involved in bankruptcy proceedings in GN 02230.065B.3.

11. Effect of CMP on continued eligibility to serve as payee

Do not appoint a representative payee applicant who has had a CMP imposed on him or her unless

  • you have evidence that he or she poses no risk to the beneficiary,

  • there are no other more suitable applicants, and

  • the debt has been satisfied or currently being paid per a settlement agreement.

Develop for a more suitable payee when there is an imposition of a CMP on the current representative payee.

See Details

  • GN 00502.000 Determining the Need for, Developing and Selecting a Representative Payee - Table of Contents

  • GN 00502.132 B.3.c. Instructions for representative payees applicants with CMPs imposed

12. How to contact OCIE

The name and phone number of the OCIE attorney involved in the case is in the case documentation sent to Operations. If questions arise about the case that need input from the OCIE attorney involved:

  • FO requests RO CMP Contact to contact the DCO/OPSOS/CMP coordinator who contacts the OCIE attorney involved .

  • PSC requests DCO/OPSOS/CMP coordinator to contact the OCIE attorney involved in the case.

H. Debtor notification of collection of CMP

1. Notification to debtor of SSA’s intent to collect CMP

The OCIE demand letter satisfies SSA’s obligation to provide at least one notice demanding payment. OCIE’s demand letter notifies the person that it has imposed a CMP against him or her and advises the debtor to send his or her payment to SSA and provides the Mid-Atlantic Program Servicing Center (MATPSC) P.O. Box address. The address is:

Social Security Administration
MATPSC
P.O. Box 3430
Philadelphia, PA 19122

If the debtor does not send his or her payment, SSA must begin collection efforts. SSA is not required to send further notice of its intent to collect the CMP debt.

2. Notification when benefit withholding is involved

Although SSA is not required to send further notice of its intent to collect the CMP debt, it is the Agency’s practice to send the debtor a notice of planned action when it plans to withhold Title II benefits or Title XVI payments to collect a debtor’s CMP.

The notice of SSA’s intent to withhold benefits

  • is manually prepared from AURORA or from Document Processing System (DPS).

  • includes paragraphs appropriate either to full withholding or to partial withholding (partial withholding according to an OCIE settlement agreement).

  • is available in DPS in the overpayment folder and in AURORA with the exhibit forms number E3963.

See the CMP withholding notice in NL 00703.963. A Spanish language version of this notice is available only in DPS. For information on the Spanish cover letter see NL 00601.600C.2.

NOTE: This notice contains limited appeal rights. The individual has the right to appeal whether SSA is collecting the CMP from the correct person and whether the CMP amount is correct. These appeal rights relate to SSA’s collection of the CMP, not to OCIE’s actions to impose the CMP.

3. Notification for use of debt collection tools

The law also requires SSA to send notices before taking other specific actions (e.g., offset against Federal payments, administrative wage garnishment, and sending information about the debt to consumer reporting agencies).

SSA plans to implement collection of CMPs via all authorized debt collection tools and develop CMP-specific notices.


GN 02230 TN 16 - Special Overpayment Procedures - 9/11/2020