[Federal Register Volume 66, Number 249 (Friday, December 28, 2001)]
[Rules and Regulations]
[Pages 67078-67081]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-31897]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 416 and 422

RIN 0960-AF31


Supplemental Security Income; Disclosure of Information to 
Consumer Reporting Agencies and Overpayment Recovery Through 
Administrative Offset Against Federal Payments

AGENCY: Social Security Administration.

ACTION: Final rules.

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SUMMARY: We are modifying our regulations dealing with the recovery of 
supplemental security income (SSI) overpayments made under title XVI of 
the Social Security Act (the Act). The modifications reflect statutory 
authority for the Social Security Administration (SSA) to selectively 
refer information about SSI overpayments to consumer reporting agencies 
and to recover SSI overpayments through administrative offset by the 
Department of the Treasury against other Federal payments to which the 
overpaid individual may be entitled. These collection practices would 
be limited to overpayments made to a person after he or she attained 
age 18 that are determined to be otherwise unrecoverable under section 
1631(b) of the Act after the individual ceases to be a beneficiary 
under title XVI of the Act.

DATES: These regulations will be effective on January 28, 2002.

FOR FURTHER INFORMATION CONTACT: Patricia Hora, Social Insurance 
Specialist, Office of Process and Innovation Management, Social 
Security Administration, 2109 West Low Rise Building, 6401 Security 
Boulevard, Baltimore, MD 21235-6401, (410) 965-7183 or TTY (410) 966-
5609 for information about these rules. For information on eligibility 
or claiming benefits, call our national toll-free number, 1-800-772-
1213 or TTY 1-800-325-0778 or visit our Internet site, Social Security 
Online, at http://www.ssa.gov/.

SUPPLEMENTARY INFORMATION: Section 1631(b) of the Act prescribes the

[[Page 67079]]

methods SSA may use to recover SSI overpayments. Until enactment of 
Pub. L. 106-169 on December 14, 1999, SSA was not authorized to use 
certain tools found in 31 U.S.C. Chapter 37 to recover title XVI 
program overpayments. Section 203 of Pub. L. 106-169 amended section 
1631(b) of the Act to permit SSA to use for SSI overpayments several of 
the debt collection practices that have been available for use 
regarding social security benefit overpayments under title II of the 
Act. Among other things, these practices include reporting delinquent 
debts to consumer reporting agencies and recovering debts by 
administrative offset against other Federal payments to which the 
overpaid person is entitled. Under section 1631(b) of the Act, these 
additional practices may be used only if the SSI overpayment was made 
to a person after he or she attained age 18 and the overpayment has 
been determined to be otherwise unrecoverable under section 1631(b) of 
the Act after the overpaid person is no longer entitled to benefits 
under title XVI of the Act.
    Before we will refer information to consumer reporting agencies or 
refer an SSI overpayment to the Department of the Treasury for 
administrative offset, we will send the overpaid person a notice that 
explains the individual's statutory rights regarding the referral. 
Specifically, we will send the overpaid person written notice (or, in 
the case of an individual for whom we do not have a current address, 
take reasonable action to locate and send written notice) describing, 
among other things, the amount and nature of the overpayment, the 
action that we propose to take, and the overpaid person's rights to 
request us to review the debt and to inspect or copy our records about 
the overpayment. We will also explain in the notice that the overpaid 
person has at least 60 calendar days to present evidence that all or 
part of the overpayment is not past-due or not legally enforceable, or 
enter into a written agreement to pay the overpayment.
    In these final rules, we set forth our policies on referral of 
information on title XVI overpayment debts to consumer reporting 
agencies and referral of such debts to the Department of the Treasury 
for administrative offset. In the future, as we make the necessary 
systems changes and develop policies and procedures to enable us to use 
additional debt collection tools for recovery of SSI overpayments, we 
will make further modifications to our overpayment recovery rules.

Explanation of Changes to Regulations

    We are adding a new Sec. 416.590 to our regulations to explain that 
we will use the additional tools authorized by section 1631(b) of the 
Act when the title XVI program overpayments occurred after the 
individual attained age 18, and the overpayment has been determined to 
be otherwise unrecoverable under section 1631(b) of the Act after the 
individual is no longer entitled to benefits under title XVI of the 
Act. Section 416.590 also contains the criteria under which we 
determine that an overpayment is otherwise unrecoverable under section 
1631(b) of the Act. An overpayment will be determined to be 
unrecoverable when all of the following conditions are met:
    <bullet> We completed our billing sequence (i.e., we have sent the 
overpaid person an initial notice of the overpayment, a reminder 
notice, and a past-due notice) or suspended or terminated collection 
activity in accordance with applicable rules, such as the Federal 
Claims Collection Standards in 31 CFR 903.2 or 903.3;
    <bullet> There is no installment payment agreement, or the overpaid 
person has failed to pay in accordance with such an agreement for two 
consecutive months;
    <bullet> We cannot collect the overpayment by adjusting benefits 
payable to individuals other than the overpaid person.
    For purposes of Sec. 416.590, if the overpaid person is a member of 
an eligible couple that is legally separated and/or living apart, we 
will deem unrecoverable from the overpaid person's spouse that part of 
the overpayment which the overpaid person's spouse did not receive. 
Adjustment of benefits will be waived for the overpaid person's spouse 
when that spouse is without fault (as defined in Sec. 416.552) and 
waiver is requested under these circumstances. See Sec. 416.554.
    In these final rules, we made one change in new Sec. 416.590(b)(1) 
from the version published in the Notice of Proposed Rulemaking of 
October 23, 2000 (65 FR 63221). We deleted the terms ``the Federal 
Claims Collection Standards in 4 CFR 104.2 or 104.3'' and inserted the 
terms ``applicable rules, such as the Federal Claims Collection 
Standards in 31 CFR 903.2 or 903.3.'' The change reflects the revision 
and relocation of the Federal Claims Collection Standards within the 
Code of Federal Regulations effective December 22, 2000. See 65 FR 
70390-70406 (November 22, 2000). As revised, new Sec. 416.590(b)(1) 
provides that we will find an SSI overpayment to be ``otherwise 
unrecoverable'' under section 1631(b) of the Act if, among other 
things, we completed our billing system sequence for the overpayment or 
we suspended or terminated our collection activity under the Federal 
Claims Collection Standards that applied at the time of the suspension 
or termination.
    As set out in the proposed rules, we are adding to Sec. 416.1403(a) 
(the list of administrative actions that are not initial 
determinations) new paragraphs (18) and (19) to include our 
determinations whether we will refer information about an overpayment 
to consumer reporting agencies and whether we will refer the 
overpayment to the Department of the Treasury for offset against other 
Federal payments due the overpaid person. Administrative actions that 
are not initial determinations may be reviewed by us, but they are not 
subject to the administrative review process provided by subpart N of 
our regulations at 20 CFR part 416, and they are not subject to 
judicial review under section 1631(c)(3) of the Act.
    We are also expanding our existing regulations in subpart D of part 
422 to cover SSI overpayments. Specifically, we have revised 
Sec. 422.301 to add language to specify that the debt collection tools 
in subpart D may be used to recover title XVI program overpayments the 
Commissioner has determined, through Sec. 416.590, to be unrecoverable 
under section 1631(b) of the Act. In Sec. 422.305, we have revised both 
the section title and paragraph (a). The changes we are making to 
Secs. 422.301 and 422.305 will allow us to apply to overpayments under 
both title II and title XVI of the Act the rules in subpart D on the 
referral of information to consumer reporting agencies and collection 
through administrative offset by the Department of the Treasury.
    In addition to the one change noted above, these final rules 
contain several non-substantive revisions to correct minor 
typographical errors and to make the regulations easier to read.

Public Comments

    On October 23, 2000 we published a Notice of Proposed Rulemaking in 
the Federal Register at 65 FR 63221 and provided a 60-day period for 
interested individuals and organizations to comment on the proposed 
rules. We received comments from two organizations. A summary of the 
comments and our responses to them follow.
    Comment: One organization recommended that we include language in 
the notice advising individuals of

[[Page 67080]]

their rights to request that we waive collection of the overpayment. 
This organization expressed concern that individuals likely to be 
affected by our new statutory authority to report information on SSI 
overpayments to consumer reporting agencies and collect such debts 
through administrative offset by the Department of the Treasury may not 
realize that they may request waiver at any time.
    Response: We agree with the organization. Before we will report 
information on an SSI overpayment debt to consumer reporting agencies 
and to the Department of the Treasury for administrative offset, we 
will send the overpaid individual a notice in accordance with 31 U.S.C. 
3711(e) and 3716(a), advising him or her of our plans to take those 
actions. See 20 CFR 422.305(b) and 422.310(c). In addition to the 
information required by those provisions, we will include language in 
the notice advising the individual of his or her right to request that 
we waive collection of the overpayment. We will inform the individual 
that if the individual requests waiver within 60 days following the 
date of the notice, we will not take the actions to report information 
on the overpayment debt to consumer reporting agencies or to Treasury 
while we review the matter. Under the usual waiver procedures, the 
individual has the opportunity for a prerecoupment personal conference 
before waiver of collection can be denied. If we then decide that 
waiver of collection is not appropriate, we will refer the overpayment 
information to consumer reporting agencies and the Department of the 
Treasury after we notify the individual of our decision on the waiver 
request. We do not need to change our regulations in order to adopt 
these practices.
    Comment: One organization stated that SSA should not apply the 
additional debt collection activities in subpart D of part 422 while an 
appeal of the overpayment decision or waiver decision is pending at any 
level of appeal. The organization felt that the reviews done by the 
field offices (reconsideration and waiver) are cursory because of the 
lack of staff.
    Response: When an individual submits a timely request for 
reconsideration of the initial overpayment decision and/or requests 
waiver of collection of the overpayment, we are precluded from taking 
any recovery action until we render a decision affirming the initial 
determination and/or (after the individual had the opportunity for a 
prerecoupment personal conference) denying the waiver request. See 
Califano v. Yamasaki, 442 U.S. 682 (1979). We are not required to 
refrain from taking collection action concerning a title XVI 
overpayment debt after a decision is issued on a request for 
reconsideration of the initial overpayment determination and/or after a 
determination is made on a request for waiver of recovery of the 
overpayment. However, under the process adopted to implement these 
final regulations we would not select a title XVI overpayment debt for 
referral to the Department of the Treasury or consumer reporting 
agencies while an administrative appeal regarding that debt is pending 
at any level of adjudication on the fact or amount of the overpayment 
or on waiver.
    Comment: One organization asserted that there are problems in our 
administration of our programs that cause overpayments. Among the 
concerns are staffing in local offices, training for our employees, and 
documenting and acting on reports of changes potentially affecting 
eligibility or benefit amounts.
    Response: Overpayments of benefits occur for many reasons. We take 
our responsibility for stewardship of the programs that we administer 
very seriously. That is why we constantly track our payment accuracy 
and strive to minimize overpayments. In addition, we are pursuing 
several initiatives that address the causes of overpayments and other 
matters described in the concerns and allegations conveyed by the 
organization. Notwithstanding the reasons for overpayments, we are 
responsible for recovering as much of the overpaid money as possible 
consistent with the law.
    Comment: One organization stated that SSA should report information 
to consumer reporting agencies in accordance with the Fair Credit 
Reporting Act (FCRA). Specifically, SSA should use the credit reporting 
industry standard Metro2 format for reporting to consumer reporting 
agencies former SSI recipients who owe delinquent debts. In addition, 
SSA should use the automated consumer dispute verification process, 
which is a credit reporting industry facility for reporting and 
resolving consumer disputes about the credit report. It also encouraged 
SSA to meet with members of the organization to ensure the consistent 
reporting of accurate and complete information.
    Response: Although the comment is not directly pertinent to these 
rules, we agree with the organization. We have been reporting 
delinquent title II overpayment debts to consumer reporting agencies 
since 1998. We realize the importance of reporting complete and 
accurate information to credit repositories. We have always complied 
with the FCRA. Additionally, SSA has been using both the Metro2 format 
and the automated consumer dispute verification process suggested by 
the commenter. In the Fall of 2000, SSA staff met with members of the 
credit reporting industry at workshops sponsored by them. We also 
communicate with members of the credit reporting industry throughout 
the year to remain current on the latest standards.

Regulatory Procedures

Executive Order 12866

    The Office of Management and Budget (OMB) has reviewed these 
proposed rules in accordance with Executive Order (E.O.) 12866.

Regulatory Flexibility Act

    We certify that these final regulations will not have a significant 
impact on a substantial number of small entities. Therefore, a 
regulatory flexibility analysis, as provided in the Regulatory 
Flexibility Act, as amended, is not required.

Paperwork Reduction Act

    These final regulations will impose no reporting or recordkeeping 
requirements requiring OMB clearance.

(Catalog of Federal Domestic Assistance Program No. 96.006, 
Supplemental Security Income)

List of Subjects

20 CFR Part 416

    Administrative practice and procedure, Aged, Blind, Disability 
benefits, Public assistance programs, Reporting and recordkeeping 
requirements, Supplemental Security Income (SSI).

20 CFR Part 422

    Administrative practice and procedure, Organization and functions 
(Government agencies), Social Security.

    Dated: December 19, 2001.
Jo Anne B. Barnhart,
Commissioner of Social Security.

    For the reasons set out in the preamble, we are amending subparts E 
and N of part 416 and subpart D of part 422 of Chapter III of Title 20 
of the Code of Federal Regulations as follows:

PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND AND 
DISABLED

    1. The authority citation for subpart E of part 416 continues to 
read as follows:


[[Page 67081]]


    Authority: Secs. 702(a)(5), 1601, 1602, 1611(c) and (e), and 
1631(a)-(d) and (g) of the Social Security Act (42 U.S.C. 902(a)(5), 
1381, 1381a, 1382(c) and (e), and 1383(a)-(d) and (g)); 31 U.S.C. 
3720A.


    2. Section 416.590 is added to read as follows:


Sec. 416.590  Are there additional methods for recovery of title XVI 
benefit overpayments?

    (a) General. In addition to the methods specified in Secs. 416.560, 
416.570 and 416.580, we may recover an overpayment under title XVI of 
the Act from you under the rules in subpart D of part 422, provided:
    (1) The overpayment occurred after you attained age 18;
    (2) You are no longer entitled to benefits under title XVI of the 
Act; and
    (3) Pursuant to paragraph (b) of this section, we have determined 
that the overpayment is otherwise unrecoverable under section 1631(b) 
of the Act.
    (b) When we consider an overpayment to be otherwise unrecoverable. 
We consider an overpayment under title XVI of the Act to be otherwise 
unrecoverable under section 1631(b) of the Act if all of the following 
conditions are met:
    (1) We have completed our billing system sequence (i.e., we have 
sent you an initial notice of the overpayment, a reminder notice, and a 
past-due notice) or we have suspended or terminated collection activity 
under applicable rules, such as, the Federal Claims Collection 
Standards in 31 CFR 903.2 or 903.3.
    (2) We have not entered into an installment payment arrangement 
with you or, if we have entered into such an arrangement, you have 
failed to make any payment for two consecutive months.
    (3) You have not requested waiver pursuant to Sec. 416.550 or 
Sec. 416.582 or, after a review conducted pursuant to those sections, 
we have determined that we will not waive collection of the 
overpayment.
    (4) You have not requested reconsideration of the initial 
overpayment determination pursuant to Secs. 416.1407 and 416.1409 or, 
after a review conducted pursuant to Sec. 416.1413, we have affirmed 
all or part of the initial overpayment determination.
    (5) We cannot recover your overpayment pursuant to Sec. 416.570 by 
adjustment of benefits payable to any individual other than you. For 
purposes of this paragraph, if you are a member of an eligible couple 
that is legally separated and/or living apart, we will deem 
unrecoverable from the other person that part of your overpayment which 
he or she did not receive.

    3. The authority citation for subpart N of part 416 is revised to 
read as follows:

    Authority: Secs. 702(a)(5), 1631, and 1633 of the Social 
Security Act (42 U.S.C. 902(a)(5), 1383, and 1383b).


    4. Section 416.1403 is amended by removing the word ``and'' at the 
end of paragraph (a)(16), removing the first period in paragraph 
(a)(17), removing ``See'' and adding ``see'' in its place in the 
parenthetical in paragraph (a)(17), removing the second period at the 
end of paragraph (a)(17) and adding a semicolon in its place, and 
adding new paragraphs (a)(18) and (19) to read as follows:


Sec. 416.1403  Administrative actions that are not initial 
determinations.

    (a) * * *
* * * * *
    (18) Determining whether we will refer information about your 
overpayment to a consumer reporting agency (see Secs. 416.590 and 
422.305 of this chapter); and
    (19) Determining whether we will refer your overpayment to the 
Department of the Treasury for collection by offset against Federal 
payments due you (see Secs. 416.590 and 422.310 of this chapter).
* * * * *

PART 422--ORGANIZATION AND PROCEDURES

    5. The authority citation for subpart D of part 422 is revised to 
read as follows:

    Authority:  Secs. 204(f), 205(a), 702(a)(5), and 1631(b) of the 
Social Security Act (42 U.S.C. 404(f), 405(a), 902(a)(5), and 
1383(b)); 31 U.S.C. 3711(e); 31 U.S.C. 3716.


    6. Section 422.301(b) is amended by removing the words ``title II'' 
and by removing ``Sec. 404.527'' and adding ``Secs. 404.527 and 
416.590'' in its place.

    7. Section 422.305 is amended by removing the reference to ``title 
II'' in the heading and in paragraph (a).

[FR Doc. 01-31897 Filed 12-27-01; 8:45 am]
BILLING CODE 4191-02-P