Along with filing an appeal of the overpayment and requesting a waiver, advocates have the option of negotiating directly with Social Security Administration (SSA) to create a repayment plan. For a beneficiary receiving Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), lowering the monthly repayment amount compared to what SSA may automatically deduct from the beneficiary's check, or reducing the total amount owed compared to what SSA alleges was overpaid is achieving a good result. Since SSA leaves itself plenty of room to negotiate repayment amounts, advocates have several avenues in which to work with the agency to arrange the best outcome for the beneficiary.
Change in repayment rate form and procedural steps
No Limit on Collection
There are no automatic limits on the amount that will be collected from monthly checks (“adjustment”) for persons receiving SSDI benefits. SSA will recoup the entire amount payable in a recipient’s monthly checks until the overpayment is recouped. POMS GN 02210.016. However, the regulations require a reduction of the amount withheld if:
"it is determined that withholding the full amount each month would defeat the purpose of title II, e.g. deprive the person of income needed for ordinary and necessary living expenses (see 20 C.F.R. § 404.508), adjustment … may be effected by withholding of an amount of not less than $10 of the monthly benefit payable to an individual."
In other words, SSA has the ability to withhold a SSDI beneficiary's entire monthly check until the full overpayment amount is repaid, unless doing so would defeat the purpose of Title II of the Social Security Act. 20 C.F.R. § 404.502. To defeat the purpose of the Title II, withholding would have to deprive the person of money needed for “ordinary and necessary living expenses.” § 404.502(c). Ordinary living expenses may include fixed expenses like food, rent/mortgage, medical bills, and other miscellaneous expenses. In these cases, SSA will accept a deduction of the person’s SSDI check of at least $10.
Defeats the Purpose of Title II
SSA determines adjustment or recover will defeat the purpose of Title II, in situations where the person from whom recovery is sought needs substantially all of his current income (including social security monthly benefits) to meet current ordinary and necessary living expenses.
20 C.F.R. § 404.508.
An individual's ordinary and necessary expenses include:
- Fixed living expenses, such as food and clothing, rent, mortgage payments, utilities, maintenance, insurance (e.g., life, accident, and health insurance including premiums for supplementary medical insurance benefits under title XVIII), taxes, installment payments, etc.;
- Medical, hospitalization, and other similar expenses;
- Expenses for the support of others for whom the individual is legally responsible; and
- Other miscellaneous expenses which may reasonably be considered as part of the individual's standard of living. 20 C.F.R. § 404.508.
Extending the Duration for Repayment
The POMS provide guidance on how an SSA representative should attempt to negotiate a payment plan. First, representatives are directed to attempt to create a plan that would allow full recovery of the debt within 12 months. POMS GN 02210.030(B)(1). In fact, if a plan is proposed that will allow repayment within 12-months and pays at least $10 a month, the representative is to accept the plan without further development. GN 02210.030(B)(2).
If SSA cannot negotiate a plan that results in a 12-month payback, representatives are then required to consider a 36-month payment plan. Again, if the beneficiary is paying at least $10 a month, such a plan must be approved. GN 02210.030(B)(3). The 12-month and 36-month repayment plans are an agency preference, but are not the only options for advocates to negotiate on behalf of their clients.
Options Based on Client's Income Sources
Depending on a client's sources of income, advocates may have other possible grounds to negotiate a lower payment with SSA. For example, if the beneficiary receives SSI as well as SSDI, SSA will withhold just 10% of the beneficiary's SSDI check. POMS GN 02210.045. If the beneficiary receives another type of cash benefit; such as, VA benefits or TANF, then SSA will withhold whatever rate the beneficiary proposes, as long as it is at least $10 a month. POMS GN 02210.030(B)(5).
If the beneficiary receives neither SSI nor another type of cash benefit, SSA will evaluate the person’s situation and will withhold one of the following:
- The amount by which income exceeds expenses, as long as it is at least $10 a month; or
- The amount by which assets exceed $3,000 (or $5,000 for someone with a dependent), as long as it is at least $10 a month; or
- The full monthly check if the person still has the overpaid funds in their possession. POMS GN 002210.030(B)(6).
Another basis for negotiating with SSA is available for SSDI beneficiaries who also receive a full Medicare Part D subsidy. If SSA receives a requested repayment rate that would not permit recovery within 36-months, but the person has a 100% Medicare Part D subsidy, they are to automatically approve the request as long as it pays at least $10 a month. POMS GN 02210.030(B)(6). Advocates review a client's Medicare Part D especially for where the person:
- Is currently working and could be eligible for Health Benefits for Workers with Disabilities, which will make them eligible for 100% Medicare Part D subsidy;
- Receives an SSDI amount less than the 135% of the current federal poverty level;
- Is on both Medicare and Medicaid or a Medicare Savings Program; or
- Was on both Medicare and Medicaid or a Medicare Savings Program for at least one month from July to December of the previous year.
Reducing Total Amount Owed
Advocates may have grounds to negotiate for a reduction in the total amount owed to SSA if the overpayment is less than $20,000 and the beneficiary “does not have the present or prospective ability to pay the full amount of the claim within a reasonable time,” or SSA's cost of collection is likely to exceed the amount of recovery. 20 C.F.R. § 404.515(a). When considering a beneficiary's inability to pay the claim for recovery of the overpayment, SSA will look at a person's age, health, present and potential income (including inheritance prospects), assets, possible concealment or improper transfer of assets, and the person's assets or income that may be available in enforced collection proceedings. 20 C.F.R. § 404.515(c) Under these circumstances, SSA has discretion to settle for a lower amount in order to facilitate payment of the claim for overpayment. 20 C.F.R. § 404.515(e).
There are exceptions to the basic rules for negotiating a repayment plan for SSDI beneficiaries. The most important exception is that SSA has a policy of not compromising, suspending or terminating collection of a claim for overpayment if “there is an indication of fraud, the filing of a false claim, or misrepresentation on the part of such individual." 20 C.F.R. § 404.515. If an overpayment involves fraud, SSA will recoup the overpayment by withholding the beneficiary's entire monthly check until the amount is recovered. 20 C.F.R. § 404.502(c)(2).
10% Collection Limit
When collecting an overpayment from an SSI beneficiary, SSA will take the lesser of:
- 10% of the beneficiary’s total monthly income, which includes countable income plus SSI and State supplementary payment; or
- The beneficiary's entire monthly benefit. 20 C.F.R. § 416.571, POMS SI 02220.016.
This means that if a client’s only income is the maximum SSI benefit amount of $733 (in 2015), SSA will recover 10% ($73.30) from the person’s check each month until the overpayment is recouped.
Exceptions to 10% Limit
The 10% limitation does not apply for recovery of an overpayment from a SSI beneficiary in the following circumstances:
- In cases in which overpayment occurred because of fraud, willful misrepresentation, or concealment of material information committed by the individual or his or her spouse. Concealment of material information means an intentional, knowing, and purposeful delay in making or failure to make a report that will affect payment amount and/or eligibility. It does not include a mere omission on the part of the recipient; it is an affirmative act to conceal. 20 C.F.R. § 416.571;
- In cases where there were agreements to dispose of resources pursuant to § 416.1240;
- In cases occurring as a consequence of the misuse of funds set aside in accordance with § 416.1231(b) to meet burial expenses.
An SSI beneficiary can request a different rate of overpayment adjustment at any time. SSA provides as follows:
If a lower rate is requested, a rate of withholding that is appropriate to the financial condition of the overpaid individual will be set after an evaluation of all the pertinent facts. An appropriate rate is one that will not deprive the individual of income required for ordinary and necessary living expenses. This will include an evaluation of the individual's income, resources, and other financial obligations. 20 C.F.R. § 416.571.
If a SSI beneficiary requests a repayment rate that is less than 10% per month, SSA provides the following guidance in its POMS instructions to district office personnel:
- Negotiate a recovery rate that will complete recovery within 12 months and, if this is not possible, try to arrange for repayment within 36 months;
- Set the rate of adjustment appropriate for the financial situation of the individual. Determine a rate that allows the individual to meet his or her necessary and ordinary living expenses. POMS SI 02220.17.
As stated in the POMS, SSA representatives are directed to first attempt to find a 12-month or 36-month repayment solution. If this is not possible, SSA is to set the rate of adjustment appropriate for the financial situation of the individual. SSA will determine a rate that allows the individual to meet their necessary and ordinary living expenses. POMS SI 02220.17. As a result, SSA has the option to accept any amount of SSI withholding as a payment plan. To ensure clients retain as much of their monthly benefit as possible, it is important for advocates to be able to account for all of their clients' living expenses.
As a policy, SSA will suspend recovery of an overpayment claim from SSI beneficiaries who are residing in a medical treatment facility in which Medicaid is paying a substantial portion of the recipient's cost of care. 20 C.F.R. § 416.414.
The Request for Waiver form is also used for requests to negotiate the overpayment amount. To initiate a negotiation request, complete Change in Repayment Rate form. Instructions for filling out the form are available on SSA's website.
For SSI and SSDI beneficiaries, the process for requesting the opportunity to negotiate repayment of the overpayment proceeds in the same way as Requests for a Waiver. The Request for Change in Repayment Rate form (same as the Request for Waiver form) is submitted to the beneficiary's local SSA district office. SSA will consider the Request and make a decision. If the district office denies the Request, SSA is required to send the beneficiary a written notice stating a basis for the denial as well as how the overpayment will be collected. POMS GN 02210.030(B)(7).