SSR 94-4p

July 11, 1994

SSR 94-4p: POLICY INTERPRETATION RULING
TITLE II OF THE SOCIAL SECURITY ACT AND TITLE IV OF THE FEDERAL MINE SAFETY AND HEALTH ACT OF 1977: WAIVER OF RECOVERY OF OVERPAYMENTS -- NOTICE OF APPEAL AND WAIVER RIGHTS -- RIGHT TO A PRE-RECOUPMENT ORAL HEARING BEFORE WAIVER CAN BE DENIED

Purpose: To state the longstanding Social Security Administration (SSA) policy of:

• Giving adequate written notice of a determination of overpayment and the right to contest such determination and request waiver of recovery of the overpayment; and
• Providing the person from whom we are seeking recovery of an overpayment with the opportunity for a face-to-face oral hearing before we deny a request for waiver of recovery of the overpayment.

The policy is based on the court decisions and orders discussed below.

Citations (Authority): Section 204(a) and (b) of the Social Security Act, as amended, and Title IV of the Federal Mine Safety and Health Act of 1977; 20 CFR sections 404.502a, 404.506, 404.904, 410.561, 410.561a, and 410.620.

Pertinent History: On October 22, 1974, the U.S. District Court for the Western District of Washington in Buffington, et al. v. Weinberger, No. 734-73C2 (W.D. Wash. October 22, 1974) stopped SSA from recovering overpaid Social Security benefits without giving each member of the plaintiff class adequate written notice of the overpayment determination, the right to contest such determination and the right to a pre-recoupment hearing. Moreover, the court stopped SSA from taking any action to recover the overpayments before affording the class member the opportunity for a hearing.

The court ordered that the written notice must include:

• A statement of the alleged overpayment, an explanation of the basis for the overpayment and SSA's proposed action to recover the overpayment;
• A statement of the individual's right to a pre-recoupment hearing;
• Instructions and forms for requesting a pre-recoupment hearing;
• An explanation that if the person did not request a pre- recoupment hearing within 30 days of the date of mailing of the overpayment notice, it would be presumed that the person waived his/her right to the hearing and recovery of the alleged overpayment would begin;
• A statement of any other administrative relief available (i.e., reconsideration of the fact and/or amount of overpayment and waiver of recovery of the overpayment); and
• A statement that the local SSA office would help him/her to complete and submit forms for appeal.

The court also ordered the following:

1. SSA had to restore all benefits withheld from the named plaintiffs pending an opportunity for a pre-recoupment hearing. The person had to be given the opportunity to examine his/her claims file at least 5 days prior to the date of the hearing.

2. The pre-recoupment hearing had to be conducted by an SSA employee who had no prior knowledge of the events leading to the overpayment determination and the decision to recover the overpayment. At the hearing the person requesting waiver had to be given the opportunity to:

• Personally appear, testify, and cross-examine any witnesses;
• Be represented by an attorney or other representative; and
• Submit documents for consideration at the hearing.

The court, however, did not require that a transcript be made of the hearing.

3. After the hearing, SSA had to issue a written decision to the individual (and his/her representative, if any) specifying the findings of fact and conclusions in support of the decision to approve or deny waiver and advising of the individual's right to appeal the decision.

In accordance with the court order, SSA began to issue overpayment notices containing all of the aforementioned information and to offer pre-recoupment hearings to all class members.

On June 20, 1979, the Supreme Court held in Califano v. Yamasaki, 442 U.S. 682 (1979), that individuals who filed a written request for waiver were entitled to the opportunity for a pre-recoupment oral hearing, but those who requested only reconsideration were not so entitled. Thereafter, SSA applied its revised overpayment notice and pre-recoupment hearing procedures to all individuals who are determined to be overpaid under the title II or Black Lung programs.

On July 31, 1981, the court in Buffington, et al. v. Schweiker, No 734-73C2 (W.D. Wash.) required SSA to automatically schedule pre-recoupment hearings for persons whose request for waiver of overpayment recovery could not be approved after initial paper review. On February 10, 1983, the court in Buffington, et al. v. Schweiker, No 734-73C2 (W.D. Wash.) approved procedures developed by SSA in response to the 1981 decree whereby pre-recoupment hearings would be automatically scheduled provided that the scheduling would be in writing. The scheduling letter had to contain all the necessary information about the date, time, and place of the hearing; the procedure for reviewing the file prior to the hearing; the procedure for seeking a change in the scheduled date, time, or place; and all other information necessary to fully inform the claimant about the pre-recoupment hearing. SSA began to automatically schedule pre-recoupment hearings in writing in April 1983.

In its order of October 19, 1987, the court in Buffington, et al. v. Bowen, No. 734-73C2 (W.D. Wash.) approved SSA's plan to transfer waiver decisionmaking authority from the processing centers to the field offices for Retirement and Survivors Insurance overpayments. SSA implemented this change in July 1988.

Policy Interpretation:

Overpayment Notice

In accordance with the court decisions, when an overpayment is discovered, the person is immediately notified. The notice includes:

• The overpayment amount and how and when it occurred;
• A request for full, immediate refund, unless the overpayment can be withheld from the next month's benefit;
• The proposed adjustment of benefits if refund is not received within 30 days after the date of the notice and adjustment of benefits is available;
• An explanation of the availability of a different rate of withholding when full withholding is proposed, installment payments when refund is requested and adjustment is not currently available, and/or cross- program recovery when refund is requested and the person is receiving another type of benefit from SSA (cross- program recovery is not available to residents of New York and Pennsylvania);
• An explanation of the right to request waiver of recovery and the automatic scheduling of a folder review and pre- recoupment hearing (commonly referred to as a personal conference) if a request for waiver cannot be approved after initial paper review;
• Instructions about the availability of forms for requesting reconsideration and waiver;
• An explanation that if the person does not request waiver or reconsideration within 30 days of the date of the overpayment notice, recovery of the overpayment will begin;
• An explanation of the right to request reconsideration of the overpayment determination;
• A statement that the local SSA office will help him/her to complete and submit forms for appeal; and
• An explanation that the person receiving the notice should notify SSA promptly if reconsideration, waiver, a lesser rate of withholding, repayment by installments, or cross-program adjustment is wanted.

Form SSA-3105

Form SSA-3105 (Important Information About Your Appeal and Waiver Rights) is included with each overpayment notice. The SSA-3105 further explains the pre-recoupment review process and contains a tear-off form which the person may complete and return to SSA if he/she wants reconsideration and/or waiver.

Delaying Recovery of the Overpayment

To ensure meaningful opportunity to contest the correctness of an overpayment determination and/or establish entitlement to waiver, the date on which full refund is due and, if appropriate, the date on which adjustment will begin must be at least 30 days after the date of the overpayment notice. If the individual responds within 30 days after the date of the overpayment notice, SSA must take action to ensure that benefit payments are not interrupted. If the 30-day period cannot be assured, SSA must postpone any proposed recoupment for a longer period. Anytime waiver is requested, SSA stops recovery.

Requesting Waiver

When waiver is requested, the individual gives SSA information (usually on Form SSA-632-BK (Request for Waiver of Overpayment Recovery or Change in Repayment Rate)) to support his/her contention that he/she is without fault in causing the overpayment and that recovery would either cause financial hardship or be inequitable. That information, along with supporting documentation, is reviewed to determine if waiver can be approved.

Reviewing Waiver Request

In Retirement and Survivors Insurance overpayments, the waiver request is reviewed in the field office; in Disability Insurance overpayments, it is reviewed in the processing center. If waiver cannot be approved after review of the claims folder, the person is notified in writing and given necessary information about the dates, times, and place of the folder review and personal conference; the procedure for reviewing the claims folder prior to the personal conference; the procedure for seeking a change in the scheduled dates, times, or place; and all other information necessary to fully inform the person about the personal conference. The folder review is always scheduled at least 5 days before the personal conference.

Folder Review

At the folder review, the person and/or the person's representative has the right to review the claims folder and applicable law and regulations with the decisionmaker or another SSA representative who is prepared to answer questions. The individual can get copies of any requested material from the claims folder or pertinent sections of the law or regulations.

Personal Conference

At the personal conference, the person is given the opportunity to:

• Personally appear, testify, cross-examine any witnesses, and make arguments;
• Be represented by an attorney or other representative; and
• Submit documents for consideration by the decisionmaker.

The decisionmaker:

• Tells the person that the decisionmaker was not previously involved in the issue under review, that the waiver decision is solely the decisionmaker's, and that the waiver decision is based only on the evidence or information presented or reviewed at the conference;
• Ascertains the role and identity of everyone present;
• Indicates whether or not the person reviewed the claims file;
• Explains the provisions of law and regulations applicable to the issue;
• Briefly summarizes the evidence already in file which will be considered;
• Ascertains from the person whether the information presented is correct and whether he/she fully understands it;
• Allows the person and the person's representative, if any, to present the person's case;
• Secures updated financial information, if necessary;
• Allows each witness to present information and allows the person and the person's representative, if any, to question the witness;
• Ascertains whether there is any further evidence to be presented;
• Reminds the person of any evidence promised by the person which has not been presented;
• Lets the person and the person's representative, if any, present any final summary or closing statement;
• Explains that a decision will be made and the person will be notified in writing; and
• Explains further appeal rights in the event the decision is adverse to the person.

Personal Conference Decision

SSA issues a written decision to the individual (and his/her representative, if any) specifying the findings of fact and conclusions in support of the decision to approve or deny waiver and advising of the individual's right to appeal the decision.

Effective Date: This Ruling is effective upon publication in the Federal Register.

Cross References: Program Operations Manual System, Part 02, Chapter 022, Subchapter 01, Sections 009, 011, 021, and 023; Subchapter 50, Sections 301, 302, 370, and 390; Subchapter 70, Sections 003-017; SSR 79-30c, Recovery of Overpayment -- Prerecoupment Oral Hearings.

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