When our efforts to recover an overpayment from a primarily liable individual (i.e. original overpaid individual) are unsuccessful, propose adjustment of benefits payable to any other individual currently receiving benefits on the same earnings record as the primarily liable individual. We call this contingent liability (see GN 02205.005). For more information regarding a waiver and a reconsideration (appeal) request, see GN 02201.019 and GN 02201.025.

We will not propose adjustment until we notify the contingently liable individual about the overpayment. We will not propose adjustment when we waived recovery of the overpayment from the primarily liable individual. In addition, we will stop collection activity when the contingently liable individual is no longer entitled to benefits or when the originally overpaid individual re-establishes eligibility to benefits.

EXAMPLE 1: We determined that Shawn Smith (C1) and his representative payee (mother), Susan Smith, are jointly liable for a $1,000 overpayment due to the number holder’s receipt of workers’ compensation payments. We approved their waiver request based on not at fault and recovery would defeat the purpose due to their inability to repay the overpayment. Because we approved the waiver request, we will not transfer the overpayment to any other individual currently receiving benefits on the same earnings record for collection based on contingent liability.

Based on the Privacy Act, when we send the notice about the overpayment to the contingently liable individual, we may only disclose:

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  The name of the primarily liable individual,

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  The amount of the overpayment, and

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  The month(s) of the overpayment.

We must not disclose the full explanation of reasons behind overpayment, the monthly amounts paid, the monthly amounts that we should have paid, and the reason that a different amount was actually due. Instead, provide a simple explanation that we cannot collect the overpayment from the primarily liable individual along with the waiver and appeal rights.

If the contingently liable individual requests an explanation of the overpayment, reconsideration (appeal), or waiver of recovery, stop collection activity. We may have to repay any monies withheld after we received the request. For an explanation request, we may only disclose the name of the primarily liable individual, the amount of the overpayment, and the month(s) of the overpayment as stated in GN 02210.007C above.

For more information regarding a reconsideration or waiver request, see GN 02201.025, and GN 02201.019.

NOTE: When an individual requests waiver and we receive the request within 30 days of the date of the overpayment notice, we consider the individual to have made the request in the same month we issued the notice.

If the 60-day due process period expires without a due process request from the individual, the automated system will reduce or withhold the monthly benefit payment until we have fully recovered the overpayment.

EXAMPLE 1: Mary Green was overpaid wife's benefits after her divorce. Her daughter, Theresa, is her own payee receiving student benefits on her father’s record (Mrs. Green’s ex-husband) and lives with her mother. We notified Mrs. Green of her overpayment in 01/2015. Mrs. Green did not request a reconsideration or a waiver; nor did she submit a full refund within 30 days. Mrs. Green did not repay her overpayment or make installment payments. In 08/2015, we notified Theresa of Mrs. Green’s overpayment and proposed adjustment of her benefits to recover her mother's overpayment. Since Theresa did not protest the proposed recovery, we started withholding from Theresa’s benefits to recover the overpayment beginning in 10/2015.

EXAMPLE 2: In 08/2015, we notified Theresa of Mrs. Green’s overpayment and proposed adjustment of her benefits to recover her mother's overpayment. Theresa requested waiver in 08/2015 when we notified her of Mrs. Green’s overpayment and proposed adjustment. Because of Theresa’s waiver request, we would stop recovery actions until we make a determination on her request.

EXAMPLE 3: In 08/2015, we notified Theresa of Mrs. Green’s overpayment and proposed adjustment of her benefits to recover her mother's overpayment. Theresa requested waiver in 12/2015 but we did not stop collection activity until 01/2016. The amount we withheld from her 10/2015 and 11/2015 benefits was proper. However, we would refund the amount we withheld from her 12/2015 benefits.

After notifying the contingently liable individual about the overpayment, withhold any underpayment that becomes due as long as he or she does not protest the overpayment.

Example 1: In 10/2015, when we were taking action to notify Lane Davis of a proposed adjustment of his retirement benefits to recover his wife's overpayment, we discovered he was due an AERO increase of his monthly benefit effective 01/2014 and 01/2015. Since we had not notified Mr. Davis of his wife's overpayment when we determined he was underpaid, we will not withhold any part of the additional benefits due to him for 1/2014 through 09/2015 in order to recover the overpayment.