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The Social Security Administration is becoming increasingly aggressive regarding collecting overpayments. Today is May 24, 2023, and I received a call this week from someone needing help for an alleged overpayment that occurred in 2009. That’s right, Social Security is attempting to collect an overpayment that allegedly occurred 14 years ago. No template can cover all the possible defenses to an overpayment situation, but this one can be used to argue the overpayment is improper, and to argue for waiver.
To: Social Security Administration
Dear Social Security Administration:
Thank you for your correspondence dated (INSERT DATE) regarding the alleged overpayment. Please let this correspondence serve as 1) an appeal of the overpayment determination with corresponding reconsideration request, and 2) a request for waiver of the overpayment. (ATTACH THE RECONSIDERATION REQUEST)
Recalculation (if applicable)
The overpayment is appealed and recalculation is necessary pursuant to POMS GN 02201.005. This POMS requires the administration to recalculate the amount of overpayment when additional benefits were due in the overpayment period. In the correspondence you sent me, you listed two columns labeled “What you were paid” and “What you should have been paid.” Based on the figures you have provided some months were overpayments, and some months were underpayments leaving additional benefits due in the overpayment period. Please find a spread sheet attached hereto showing the monthly amounts paid and what you say I should have been paid (Exhibit ‘A’.)
Using your figures, beginning (Date) continuing through (Date), an overpayment did occur; however, the amount of overpayment was calculated incorrectly. Per your figures, in that time frame the claimant received $XXX.XX; however, however was only entitled to receive $YYY.YY. The amount of overpayment received in that time period was $ZZZ.ZZ. In accordance with POMS GN 02201.005 the amount of overpayment must be recalculated and correctly assessed as $ZZZ.ZZ.
This is not an admission that the overpayment is correct. This simply addresses the miscalculation and duty to recalculate based on your numbers provided in the notice of overpayment.
(Insert any Income Related Work Expenses and show how that dropped earnings below SGA levels if appropriate. Then add this sentence: Because the IRWE reduced my income below SGA levels for the following months [list months] they do not count as overpayments and the amount needs to be recalculated.)
Administrative Finality Precludes Assessing the Overpayment
POMS SI 02201.005 establishes the rules for assessing an overpayment. Subsection E specifically addresses administrative finality and states:
1. Do not apply the rules of Administrative Finality to cases involving fraud.
2. Make any revision to a prior overpayment determination only under the rules of administrative finality. These rules permit the recovery of overpayments which occurred more than 2 years in the past as long as the determination was made timely.
3. If the rules of administrative finality permit the determination of an overpayment more than 24 months in the past, post this overpayment to the Supplemental Security Record (SSR).
4. If the SSR shows an overpayment, assume that any changes made to the system which resulted in the overpayment being computed were properly made within the rules of administrative finality. For more information about administrative finality, see SI 04070.001.
Although the POMS says to “assume that any changes made to the system which resulted in the overpayment being computed were properly made within the rules of administrative finality” the claimant disputes that the changes adhere to the rules of administrative finality. POMS SI 02201.005(E)(2) requires the overpayment determination to be made in a timely manner in order to satisfy the rules of administrative finality. The alleged overpayment occurred in (year) and the assessment occurred in (year) a (year) difference.
Timely is a defined term in the POMS found in POMS 27501.005(2)(d) which states:
“Timely” means within the timeframes and conditions described in DI 27505.001 Conditions for Reopening a Final Determination or Decision
In turn, DI 27505.001 states the timeframes and conditions for reopening are satisfied when both of the following conditions are met:
The determination or decision was incorrect when made; and
The time limits are the usual 1 year, 2 year, 4 year, and unrestricted periods as applicable. Since the alleged overpayment occurred more than 4 years ago the only way that the administration is able to reopen is if they can establish fraud or similar fault occurred, which they cannot do as set forth in the waiver request section below. Since the claimant is without fault administrative finality has occurred, and the reopening to assess an overpayment is prohibited.
The alleged overpayment is greater than 10 years old
An additional bar to collecting the overpayment is the alleged overpayment is greater than 10 years old. POMS SI 04070.010(C)(2) states:
If we change our position because of a court order, legal precedent, or policy considerations, we can go back for up to one year and revise determinations, even though they were correct when made under the old position.
The administration has changed the position regarding the 10 year bar to collecting overpayments. Emergency Message (EM) – 22017 indicated that POMS GN 02210.003 was archived. This POMS section established the 10 year bar to collecting overpayments. The rationale in the Emergency Message was that the bar was based on a Health and Human Services regulation, and nothing in the Social Security Act or Social Security Regulations prohibited such a collection effort.
However, the Emergency Message establishes that the change in procedure comes from a change in position, not a change in the statute or regulations. Accordingly, POMS SI 04070.010(C)(2) creates an administrative finality exception for one year to go back and reopen a determination. As the overpayment notice is greater than one year after the Emergency Message transmission the one year exception to administrative finality window has closed, and per the POMS the action is untimely.
Additionally, the principle of latches applies since the administration specifically granted a one year window to retroactively reopen the otherwise extremely remote decision. The issuance of such a dated overpayment creates significant substitutive Due Process concerns. The normal person will not keep records over a decade old as a matter of course. For that matter, most state laws only require up to seven year record retention periods. The position change regarding overpayments over 10 years old precludes the claimant from mounting a meaningful defense to the alleged overpayment on the merits by the sheer passage of time and unavability of records.
In addition to the request for reconsideration this correspondence serves to request waiver of the overpayment. Waiver is appropriate when I am 1) without fault in the overpayment and 2) collecting the overpayment would defeat the purpose of the program. For the reasons set forth below both prongs of the waiver test are met, and waiver is appropriate.
The detailed breakdown you provided regarding the amount of payments due on a month by month basis is (insert the basis of the overpayment.) POMS GN 02250.005 sets forth the criteria for determining fault. It does so by establishing when the duty of good faith is not met. The criteria are:
a. an incorrect statement by the person which he/she knew or should have known was false,
b. the person’s failure to furnish information which he/she knew or should have known was material,
c. the person’s acceptance of any payment that he/she knew or should have known was incorrect.
(Insert reasoning as to why the a and b criterion are not present.)
For criterion ‘c’, you have policies in place that prevent you from finding the claimant at fault for the overpayment. POMS GN 02250.020 sets forth policy regarding benefit calculation and notes, “[u]sually a person cannot be charged with knowledge of how benefit rates are computed.”
Since all three prongs of the without fault test have been shown to be not present the claimant has acted without fault. As the claimant’s actions are without fault a reopening based on fraud or similar fault cannot occur, and administrative finality precludes assessing the overpayment.
Defeats the Purpose of the Program
For the purpose of completeness, the defeats the purpose of the program prong is also argued. The administrative policy regarding defeats the purpose of the program is set forth in POMS GN 02250.100. The policy is:
Recovery of an overpayment will defeat the purpose of title II of the Social Security Act if recovery would deprive the person of income required for ordinary and necessary living expenses.
Recovery will defeat the purpose of title II to the extent that the person does not have any of the overpaid funds in his possession when notified of the overpayment (GN 02250.105) and the person:
Receives cash public assistance (GN 02250.110); or
In order to assess the defeats the purpose prong of the analysis POMS GN 02250.115 requires the financial information used be, “no more than one year old when the waiver decision is made.” I have undergone credit counseling in regards to my financial situation, and a copy of the report is attached hereto as exhibit ‘B’. The credit counseling was conducted and report generated in September 2018 satisfying the “no more than one year old” requirement.
POMS GN 02250.100 controls the analysis of ordinary and necessary living expenses. The POMS directs:
B. Policy – Expenses
A persons particular circumstances and lifestyle determine whether expenses are ordinary and necessary. Patterns of living are established over time and these patterns must be considered when evaluating the facts. This policy, however, does not imply acceptance of unreasonable expenses which are neither ordinary nor necessary.
a. fixed living expenses such as food and clothing, rent, mortgage payments, maintenance, utilities, transportation, necessary household help, insurance, taxes, etc.;
b. medical, hospitalization and other similar expenses not covered by insurance;
c. expenses for the support of others for whom the person is responsible;
d. miscellaneous expenses consistent with the individual’s life style, such as newspaper, hairdresser, pet maintenance, entertainment, charitable donations, etc.
a. Do not impose rigid restrictions on acceptable expenses.
b. Do not allow unlimited amounts for necessities such as food and shelter or exclude nonessential expenses such as entertainment.
c. Allow such expenses as are consistent with the person’s standard of living.
d. Do not allow extraordinary and unnecessary expenses (e.g., expenses related to a travel trailer used for vacationing) regardless of the person’s standard of living.
e. Do not allow expenses that help a person maintain a luxurious standard of living that developed as the result of the incorrect payments.
f. Fully document and explain any unusual individual circumstances.
(Insert a monthly budget along with supporting documentation as exhibits. Include all sources of income as well as all bills. The documentation needs to be less than 6 months old. Given the time it takes Social Security to made a decision these documents age out and need to be provided multiple times over the course of the case.)
(Fact pattern) establishes that the claimant is without fault. As such, administrative finality is intact and POMS SI 02201.005(E) prevents the administration from assessing an overpayment. Accordingly the claimant prays that a fully favorable decision issue and the overpayment be released.
If you need help with an overpayment issue, please complete the form below and we will be glad to contact you and discuss your situation with you.