oversight

Recovery of Old-Age, Survivors and Disability Insurance Overpayments When a Contingently Liable Beneficiary Stops Receiving Benefits

Published by the Social Security Administration, Office of Inspector General on 2019-05-15.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

             Audit Report



Recovery of Old-Age, Survivors and
 Disability Insurance Overpayments
    When a Contingently Liable
Beneficiary Stops Receiving Benefits




        A-04-18-50651 | May 2019
MEMORANDUM


Date:      May 15, 2019                                                     Refer To:

To:        The Commissioner
From:      Inspector General
Subject:   Recovery of Old-Age, Survivors and Disability Insurance Overpayments When a Contingently
           Liable Beneficiary Stops Receiving Benefits (A-04-18-50651)

           The attached final report presents the results of the Office of Audit’s review. The objective was
           to determine whether the Social Security Administration should have initiated recovery of
           Old-Age, Survivors and Disability Insurance overpayments after a contingently liable
           beneficiary stopped receiving benefits.

           If you wish to discuss the final report, please call me or have your staff contact Rona Lawson,
           Assistant Inspector General for Audit, 410-965-9700.




                                                          Gail S. Ennis

           Attachment
Recovery of Old-Age, Survivors and Disability Insurance
Overpayments When a Contingently Liable Beneficiary Stops
Receiving Benefits
A-04-18-50651
May 2019                                                                   Office of Audit Report Summary

Objective                                  Findings

To determine whether the Social            Of the $17.7 million in overpayments, SSA should have initiated
Security Administration (SSA) should       recovery of over
have initiated recovery of Old-Age,
Survivors and Disability Insurance            $2.6 million through benefit adjustments by removing the
(OASDI) overpayments after a                   uncollected debt from 1,030 terminated contingently liable
contingently liable beneficiary stopped        beneficiaries and resuming recovery from the overpaid person
receiving benefits.                            or from another contingently liable beneficiary on the overpaid
                                               record and
Background                                    $15.1 million by removing the uncollected debt from
                                               4,690 terminated contingently liable beneficiaries and
An OASDI overpayment occurs when               transferring the balance to the overpaid person for an immediate
SSA pays a beneficiary more than               payment or until future recovery was available.
he/she is due for a given period. When
the overpaid person is not due a benefit   According to SSA, staff is not alerted to all records that allow for
and additional efforts to collect from     continued benefit adjustments. Further, when benefit adjustments
the overpaid person are unsuccessful,      are not available, SSA’s systems do not prompt staff to remove the
any beneficiary receiving benefits on      balance and re-establish the debt to the original debtor.
the same Social Security record as the
overpaid person can be held liable for     Recommendations
repaying an overpayment. This is
known as contingent liability. SSA         We recommend SSA:
will cease recovery efforts from a
contingently liable beneficiary when       1. Review the 1,030 terminated contingently liable records and
benefits are suspended or terminated,         take action to adjust benefits.
the overpaid person re-establishes         2. Review and take action to remove the overpayment balance
eligibility, or SSA grants a waiver of        from the 4,690 terminated contingently liable beneficiaries and
recovery.                                     transfer the debt balance to the original debtor for an immediate
                                              payment of the overpayment or seek recovery through
We identified 5,720 beneficiaries with
                                              additional debt collection tools.
an overpayment established under
SSA’s contingent-liability policy. As      3. Establish controls to remove the outstanding debt from
of March 2018, SSA had terminated             terminated contingently liable beneficiaries and transfer the
benefits for these contingently liable        balance to the original debtor for an immediate payment of the
beneficiaries and stopped its collection      overpayment or seek recovery through additional debt
efforts for the contingently liable           collection tools when available.
overpayments, totaling over
$17.7 million.                             SSA agreed with our recommendations.
TABLE OF CONTENTS
Objective ..........................................................................................................................................1
Background ......................................................................................................................................1
Results of Review ............................................................................................................................2
     Overpayment Recovery from Original Debtors and Other Contingently Liable Beneficiaries
     Through Benefit Adjustments ....................................................................................................3
     Overpayment Recovery Through Payment of Uncollected Balance .........................................5
Conclusions ......................................................................................................................................6
Recommendations ............................................................................................................................7
Agency Comments ...........................................................................................................................7
                    – Scope and Methodology ..................................................................................... A-1
                    – The Agency’s Overpayment Recovery Methods ................................................ B-1
                    – Agency Comments .............................................................................................. C-1




Overpayment Recovery When a Contingently Liable Beneficiary Stops Receiving Benefits (A-04-18-50651)
ABBREVIATIONS
ECO                  External Collection Operation

MBR                  Master Beneficiary Record

OASDI                Old-Age, Survivors and Disability Insurance

OIG                  Office of the Inspector General

POMS                 Program Operations Manual System

ROAR                 Recovery of Overpayments, Accounting and Reporting

SSA                  Social Security Administration

U.S.C.               United States Code




Overpayment Recovery When a Contingently Liable Beneficiary Stops Receiving Benefits (A-04-18-50651)
OBJECTIVE
Our objective was to determine whether the Social Security Administration (SSA) should have
initiated recovery of Old-Age, Survivors and Disability Insurance (OASDI) overpayments after a
contingently liable beneficiary stopped receiving benefits.

BACKGROUND
The OASDI program provides monthly benefits to retired and disabled workers as well as their
dependents and survivors. 1 An OASDI overpayment occurs when SSA pays a beneficiary more
than he/she is due for a given period. 2 When a beneficiary is overpaid, SSA will attempt
recovery from the overpaid person by requesting a full and immediate payment. 3 However, if the
overpaid person receives a benefit, SSA may withhold all or part of the monthly benefit to repay
the overpayment. SSA may withhold benefits payable on the overpaid record, on a separate
benefit record, 4 or from another SSA-administered program. 5

When the overpaid person is not due a benefit and additional efforts to collect from the overpaid
person are unsuccessful, SSA may recover the overpayment from benefits payable to another
beneficiary on the same Social Security record. This is known as contingent liability. 6 Any
beneficiary receiving benefits on the same Social Security record 7 as the overpaid person can be
held liable for repaying an overpayment, whether living in the same or a different household. 8
SSA will cease recovery efforts from a contingently liable beneficiary when his/her benefits are
suspended or terminated, the overpaid person re-establishes eligibility, or SSA grants a waiver of
recovery. 9




1
    Social Security Act, 42 U.S.C. §§ 401, 402, 423 (govinfo.gov 2017).
2
    Social Security Act, 42 U.S.C. § 404 (govinfo.gov 2017); SSA, POMS, GN 02201.001, A (October 31, 2017).
3
    SSA, POMS, GN 02210.150, A (August 6, 2006) and GN 02210.001 (October 12, 2018).
4
 SSA, POMS, GN 02210.001, A (October 12, 2018); GN 02210.015, A.1 and A.2 (February 13, 2012); and
GN 02210.016, A.1 and A.2 (June 14, 2010).
5
    SSA, POMS, GN 02210.008, A (April 25, 2013).
6
 SSA, POMS, GN 02205.005, A (December 20, 2012); GN 02210.015, A.2 (February 13, 2012); and
GN 02210.007, A (October 12, 2018).
7
  SSA establishes a Master Beneficiary Record (MBR) for each OASDI claimant. The MBR maintains pertinent
information needed to pay benefits to the claimant and all entitled auxiliary beneficiaries. Auxiliary beneficiaries
can be children, widows, spouses, and parents who receive OASDI benefits based on a primary wage earner’s Social
Security record.
8
    SSA, POMS, GN 02205.005, A (December 20, 2012).
9
    SSA, POMS, GN 02210.007, B (October 12, 2018).



Overpayment Recovery When a Contingently Liable Beneficiary Stops Receiving Benefits (A-04-18-50651)              1
SSA uses the Recovery of Overpayments, Accounting and Reporting (ROAR) system to track
overpayments. 10 From the ROAR, we identified 5,720 beneficiaries with an overpayment
established under SSA’s contingent-liability policy. As of March 2018, SSA had terminated
their benefits 11 and stopped its collection efforts 12 for over $17.7 million 13 in contingently liable
overpayments. For these 5,720 beneficiaries, the ROAR showed the terminated contingently
liable beneficiaries remained responsible for any future repayment. From this population, we
selected a random sample of 50 beneficiaries to determine whether SSA re-established the
overpayment to the overpaid person or another contingently liable beneficiary. See Appendix A
for our scope and methodology.

RESULTS OF REVIEW
Of the $17.7 million in overpayments, SSA should have initiated recovery of over

    $2.6 million through benefit adjustments by removing the uncollected debt from
     1,030 terminated contingently liable beneficiaries and resuming recovery from the overpaid
     person or another contingently liable beneficiary on the overpaid record and
    $15.1 million by removing the uncollected debt from 4,690 terminated contingently liable
     beneficiaries and transferring the balance to the overpaid person for an immediate payment
     or until future recovery was available.

SSA’s ROAR erroneously showed the 5,720 terminated contingently liable beneficiaries
remained responsible for any future repayment. Also, our review of 50 sampled beneficiaries
verified that SSA did not re-establish the overpayment to the overpaid person or another
contingently liable beneficiary. If SSA resumes benefit payments to the overpaid person or starts
paying benefits to a contingently liable beneficiary, SSA’s system will alert staff to these
beneficiaries. However, according to SSA, the alerts do not identify all records where continued
benefit adjustments are possible. Further, when benefit adjustments are not available, SSA’s
systems do not prompt staff to remove the balance and re-establish the debt to the original
debtor.




10
  SSA’s ROAR controls the recovery and collection activity of OASDI overpayments. The ROAR contains the
cause and amount of the overpayment, person liable for the debt, actions against the overpayment record, and status
of the overpayment.
11
  There are certain events that terminate a beneficiary’s entitlement to OASDI benefits. For 91 percent of the
contingently liable beneficiaries, SSA terminated their benefits because they turned age 18 and were not a full-time
student or disabled; the student was no longer in school full-time; or they died.
12
   When SSA terminates its internal collection efforts, it deems the debt temporarily unrecoverable. The
overpayment remains on the benefit record for collection when a future recovery method is available. When SSA
terminates its internal collection efforts, and the debt meets certain criteria, SSA can attempt collection through its
External Collection Operation. SSA, POMS, GN 02215.235, B.1, B.4, and C.6 (January 14, 2019). See Appendix B
for a description of SSA’s External Collection Operation.
13
  These overpayments ranged from $255 to $80,139. In Fiscal Year 2017, the average cost to collect a Disability
Insurance overpayment was $254. Therefore, we excluded all overpayments less than $255 from our review.


Overpayment Recovery When a Contingently Liable Beneficiary Stops Receiving Benefits (A-04-18-50651)                   2
Overpayment Recovery from Original Debtors and Other
Contingently Liable Beneficiaries Through Benefit Adjustments
SSA should have initiated recovery of over $2.6 million through benefit adjustments by having
staff remove the outstanding debt from 1,030 terminated contingently liable beneficiaries and
resume recovery from beneficiaries receiving benefits. Table 1 shows the number of terminated
contingently liable beneficiaries and the outstanding debt SSA could have recovered from
beneficiaries (original debtors or other contingently liable beneficiaries) who were receiving
benefits.

                    Table 1: Overpayment Recovery Through Benefit Adjustments
                                                                Number of              Overpayment Balance
                                          Number of
                                                               Terminated                Uncollected from
       Person Receiving Benefits         Beneficiaries
                                                            Contingently Liable       Terminated Contingently
                                       Receiving Benefits
                                                               Beneficiaries            Liable Beneficiaries

            Original Debtor                   608                   605                      $1,460,664

     Additional Contingently Liable
                                              448                   392                       1,144,720
               Beneficiary
          Original Debtor and a
                                              72                     33                         63,453
     Contingently Liable Beneficiary

                 Total                       1,128                  1,030                    $2,668,837

Source: SSA’s ROAR and Master Beneficiary Record.

For 605 terminated contingently liable beneficiaries, 608 original debtors were receiving
monthly Social Security benefits. 14 The overpayment record identified the original debtor for
whom SSA initially established the overpayment before it transferred the debt balance to the
contingently liable beneficiary. According to policy, SSA stops its recovery from a contingently
liable beneficiary when collection is available from the overpaid person. 15




14
   Our population included instances where SSA combined multiple beneficiaries’ overpayment balances and
transferred the debt to a contingently liable beneficiary.
15
     SSA, POMS, GN 02210.007, B (October 12, 2018) and GN 02210.015, A.2 (February 13, 2012).



Overpayment Recovery When a Contingently Liable Beneficiary Stops Receiving Benefits (A-04-18-50651)       3
For these debts, SSA either resumed the original debtor’s monthly benefits on the overpaid
record or the original debtor received benefits under his/her own account. 16 Had SSA removed
the outstanding debt from the terminated contingently liable beneficiaries and re-established the
overpayment to original debtors receiving benefits, it could have initiated recovery of over
$1.4 million in overpayments through benefit adjustments. These original debtors were
receiving monthly benefits that ranged from $34 to $2,368 from which SSA could have
recovered the debt. 17

For 392 terminated contingently liable beneficiaries, the overpaid record showed additional
contingently liable beneficiaries receiving benefits. 18 Specifically, there were 448 other
beneficiaries receiving monthly benefits that ranged from $23 to $2,460 from which SSA could
have recovered the debt. 19 According to policy, if recovery from the overpaid person is
unsuccessful, any beneficiary receiving benefits on the same Social Security record as the
overpaid person can be held contingently liable to repay an overpayment. 20 SSA will notify the
contingently liable beneficiary of his/her responsibility to repay the overpayment and the
proposed adjustment against monthly benefits. 21 SSA will also provide the contingently liable
beneficiary an opportunity to contest the decision or request that SSA waive liability. 22 Had SSA
removed the outstanding debt from the terminated contingently liable beneficiaries and pursued
collection from another contingently liable beneficiary, it could have initiated recovery of over
$1.1 million in overpayments through benefit adjustments.

For 33 terminated contingently liable beneficiaries, the benefit record showed the original debtor
and a contingently liable beneficiary were receiving benefits. For these records, there were
72 beneficiaries receiving monthly benefits that ranged from $116 to $1,857. 23 According to
policy, when multiple beneficiaries are receiving benefits, SSA applies a priority of adjustments
to recover an overpayment. 24 SSA will first attempt recovery from the overpaid person and
adjust benefits payable to the overpaid person on any earnings record. 25 If SSA cannot collect




16
  For example, an original debtor could be an auxiliary beneficiary on the overpaid record and later become entitled
to benefits under his/her own Social Security number.
17
  We acknowledge the range of monthly benefits received. However, SSA offers liable beneficiaries options to
repay or protest recovery of the debt.
18
  When multiple beneficiaries are receiving benefits, SSA applies a priority of adjustment to recover an
overpayment. SSA, POMS, GN 02210.016 (June 14, 2010).
19
     See Footnote 17.
20
     SSA, POMS, GN 02205.005, A (December 20, 2012).
21
     SSA, POMS, GN 02210.007, B and C (October 12, 2018).
22
     SSA, POMS, GN 02210.007, D and E (October 12, 2018).
23
     See Footnote 17.
24
     SSA, POMS, GN 02210.015, A (February 13, 2012).
25
     SSA, POMS, GN 02210.015, A.1 (February 13, 2012).



Overpayment Recovery When a Contingently Liable Beneficiary Stops Receiving Benefits (A-04-18-50651)               4
from the overpaid person, it will apply its contingent liability policy. 26 Had SSA removed the
outstanding debt from the terminated contingently liable beneficiaries and pursued recovery from
either the original debtor or another contingently liable beneficiary, it could have initiated
recovery of over $63,000 through benefit adjustments.

When staff delays initiating benefit adjustments, SSA may not fully recover overpaid benefits.
Policy27 prohibits SSA from using benefit adjustment to recover an overpayment more than
10 years after a debt accrues 28 and benefit withholding was available but not initiated. For 665 of
these terminated contingently liable beneficiaries, SSA may be prohibited from recovering over
$1.5 million in overpaid benefits because it did not resume collection efforts when the original
debtor or contingently liable beneficiary began receiving benefits. Each June, SSA’s system
produces the Reentitled and Contingently Liable Overpayment Alerts File. This File identifies
records where SSA resumed benefit payments to the overpaid person or started paying benefits
to a contingently liable beneficiary living in the same household. However, according to SSA,
the alerts do not identify all records where continued benefit adjustments are possible. SSA told
us it had begun work to correct the problem in December 2018 and plans to resolve the issue by
late summer 2019. 29 While reviewing its programming rules, SSA should review the
1,030 terminated contingently liable records and take action to begin benefit adjustments.

Overpayment Recovery Through Payment of Uncollected Balance
The remaining 4,690 records, with a debt balance of over $15.1 million, did not contain an
original debtor or another contingently liable beneficiary who was receiving benefits. According
to policy, when a contingently liable beneficiary stops receiving benefits, and further benefit
adjustments are not available, SSA will transfer the balance to the original debtor for an
immediate payment or until future recovery is available. 30 SSA will notify the original debtor of




26
     SSA, POMS, GN 02210.015, A.2 (February 13, 2012) and GN 02210.016, A (June 14, 2010).
27
     SSA, POMS, GN 02210.003, A.1 (August 16, 2010).
28
  A debt accrues with the later of the following events: the initial overpayment decision; date the overpayment
decision was upheld; benefit adjustments stop; debtor defaults on a repayment agreement; or the last External
Collection Operation action. SSA, POMS, GN 02210.003, A.2 (August 16, 2010).
29
   We provided SSA our 50 randomly sampled beneficiaries. SSA’s review of our sampled beneficiaries identified
records that should have been included on the Reentitled and Contingently Liable Overpayment Alerts File.
30
     See Appendix B for a description of the Agency’s internal and external overpayment recovery methods.



Overpayment Recovery When a Contingently Liable Beneficiary Stops Receiving Benefits (A-04-18-50651)              5
the uncollected balance and seek payment of the debt. 31 Although SSA terminated benefits 32 for
this population of contingently liable beneficiaries and temporarily stopped its collection
efforts, 33 the overpayment record showed they remained liable to repay the debt. Also, for our
50 randomly sampled records, SSA had not re-established the overpayment to the overpaid
person. When SSA terminates a contingently liable beneficiary’s benefits, and further benefit
adjustments are not available, SSA’s systems do not prompt staff to remove the balance and
re-establish the debt to the original debtor. Unless SSA removes the uncollected balance from
terminated contingently liable beneficiaries and transfers the debt to the original debtor, it may
miss an opportunity to fully recover overpaid benefits through an immediate payment or future
benefits payable the original debtor.

In Fiscal Year 2017, SSA began work on a new Debt Management modernization initiative that
includes a redesign of the debt management databases and applications. Among several features,
the redesign will allow for improved debt collection capabilities and for staff to better track debt
collections. This initiative is a 6-year project. SSA is scheduled to begin implementing its
improvements in year 2021. While SSA is developing this project, it should establish controls to
remove the outstanding debt from terminated contingently liable beneficiaries and transfer the
balance to the original debtor. For example, the control should periodically identify terminated
contingently liable beneficiaries and prompt staff to re-establish the debt to the original debtor
when further benefit adjustments are not available.

CONCLUSIONS
SSA terminated benefits for a population of contingently liable beneficiaries and stopped its
collection efforts for the contingently liable overpayments. However, SSA should have initiated
recovery of $17.7 million in overpayments not collected from the 5,720 terminated contingently
liable beneficiaries. This included over

    $2.6 million through benefit adjustments when the overpaid person re-established eligibility
     or from another contingently liable beneficiary on the overpaid record and




31
  SSA, POMS, GN 02201.013, D.3 and D.4 (August 18, 2011). For 1,129 of our terminated contingently liable
beneficiaries, the original debtor is deceased. For 588 of these beneficiaries, both the terminated contingently liable
beneficiary and original debtor are deceased. Under certain conditions, when the overpaid person is deceased and
SSA cannot recover the overpayment from another beneficiary on the overpaid record, it may attempt recovery from
the deceased’s estate or terminate its collection efforts. SSA, POMS, GN 02215.050, A (December 21, 2018) and
GN 02215.070, B (January 18, 2007).
32
  There are certain events that terminate a beneficiary’s entitlement to OASDI benefits. For the majority
(91 percent) of the contingently liable beneficiaries, SSA terminated their benefits because they turned age 18 and
were not a full-time student or disabled; the student was no longer in school full-time; or because of death.
33
   When SSA terminates its internal collection efforts, it deems the debt temporarily unrecoverable. The
overpayment remains on the benefit record for collection when a future recovery method is available. When SSA
terminates its internal collection efforts, and the debt meets certain criteria, SSA can attempt collection through its
External Collection Operation. SSA, POMS, GN 02215.235, B.1, B.4, and C.6 (January 14, 2019).


Overpayment Recovery When a Contingently Liable Beneficiary Stops Receiving Benefits (A-04-18-50651)                      6
   $15.1 million by transferring the uncollected debt to the overpaid person when the
    contingently liable beneficiary stopped receiving benefits and further benefit adjustments
    were not available.

If SSA resumes benefit payments to the overpaid person or starts paying benefits to a
contingently liable beneficiary, SSA’s system will alert staff to these beneficiaries. However,
according to SSA, the alerts do not identify all records where continued benefit adjustments are
possible. SSA told us it had begun work to correct the problem.

Further, when benefit adjustments are not available, SSA’s systems do not prompt staff to
remove the balance and re-establish the debt to the original debtor. Unless SSA removes the
uncollected balance from terminated contingently liable beneficiaries and transfers the debt to
the original debtor, it may miss an opportunity to fully recover overpaid benefits.

RECOMMENDATIONS
We recommend SSA:

1. Review the 1,030 terminated contingently liable records and take action to adjust benefits.

2. Review and take action to remove the overpayment balance from the 4,690 terminated
   contingently liable beneficiaries and transfer the debt balance to the original debtor for an
   immediate payment of the overpayment or seek recovery through additional debt collection
   tools.

3. Establish controls to remove the outstanding debt from terminated contingently liable
   beneficiaries and transfer the balance to the original debtor for an immediate payment of the
   overpayment or seek recovery through additional debt collection tools when available.

AGENCY COMMENTS
SSA agreed with our recommendations; see Appendix C.




                                                  Rona Lawson
                                                  Assistant Inspector General for Audit




Overpayment Recovery When a Contingently Liable Beneficiary Stops Receiving Benefits (A-04-18-50651)   7
                                       APPENDICES




Overpayment Recovery When a Contingently Liable Beneficiary Stops Receiving Benefits (A-04-18-50651)
                        – SCOPE AND METHODOLOGY
To accomplish our objective, we:
     Reviewed applicable Federal laws and regulations and sections of the Social Security
      Administration’s (SSA) policies and procedures related to collecting Old-Age, Survivors and
      Disability Insurance (OASDI) overpayments and contingent liability.
     Obtained from the Recovery of Overpayments, Accounting and Reporting (ROAR) system, 1
      a file of 5,720 contingently liable beneficiaries with an overpayment established under SSA’s
      contingent liability policy. As of March 15, 2018, the contingently liable overpayments had
      an outstanding balance of $255 or more, 2 and the ROAR showed SSA terminated its
      collection efforts for the contingently liable overpayment. Also, SSA terminated benefits for
      the contingently liable beneficiaries.
     Identified the original debtor from the ROAR.
     Reviewed the Master Beneficiary Record (MBR) 3 and determined whether the original
      debtor was receiving benefits on the overpaid record or his/her own account. We also
      determined whether other beneficiaries were receiving benefits on the overpaid record.
     Reviewed the date SSA terminated the contingently liable beneficiaries’ benefits and
      determined whether recovery by adjustment was prohibited because a benefit withholding
      was available but not initiated within 10 years. 4
     Selected a random sample of 50 terminated contingently liable beneficiaries to test our data
      mining results and determine whether SSA re-established the overpayment to the overpaid
      person or another contingently liable beneficiary.

The principal entities reviewed were the Offices of the Deputy Commissioners for Operations
and Systems. We conducted our review in Atlanta, Georgia, between May and November 2018.
We determined the data used in this report were sufficiently reliable given our review objective
and its intended use. We conducted this performance audit in accordance with generally
accepted government auditing standards. Those standards require that we plan and perform the
audit to obtain sufficient, appropriate evidence to provide a reasonable basis for findings and
conclusions based on our audit objective. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on our audit objective.



1
  SSA’s ROAR controls the recovery and collection activity of OASDI overpayments. The ROAR record contains
the cause and amount of the overpayment, person liable for the debt, actions against the overpayment record, and
status of the overpayment.
2
 In Fiscal Year 2017, the average cost to collect a Disability Insurance overpayment was $254. Therefore, we
excluded all overpayments less than $255 from our review.
3
 SSA establishes an MBR for each OASDI claimant. The MBR maintains pertinent information needed to pay
benefits to the claimant and all entitled auxiliary beneficiaries. Auxiliary beneficiaries can be children, widows,
spouses, and parents who receive OASDI benefits based on a primary wage earner’s Social Security record.
4
    SSA, POMS, GN 02210.003, A.1 and A.2 (August 16, 2010).


Overpayment Recovery When a Contingently Liable Beneficiary Stops Receiving Benefits (A-04-18-50651)                  A-1
                       – THE AGENCY’S OVERPAYMENT RECOVERY
                         METHODS
The Social Security Administration (SSA) attempts to fully and immediately recover an
Old-Age, Survivors and Disability Insurance (OASDI) overpayment. 1 If a full payment is not
possible, SSA may recover an overpayment through other methods, as follows.

      If an overpaid beneficiary is receiving Social Security benefits, SSA may withhold all or part
      of his/her monthly benefit to repay the overpayment. 2
      If an overpaid beneficiary receives a payment from another SSA-administered program, SSA
      may recover the overpayment by decreasing the amount payable from the other program
      through cross-program recovery. 3
      If an overpaid beneficiary is not due a benefit, SSA may recover the overpayment by
      withholding all or part of the benefits payable to another beneficiary on the same
      Social Security record as the overpaid person. This is called contingent liability. 4
      When benefit withholding is not possible and an overpaid person cannot repay in a single
      payment, he/she may enter into an agreement to repay the overpayment through monthly
      installment payments. 5
      SSA may also settle a debt through a compromise settlement, which occurs when a
      beneficiary offers to repay a lesser amount than the total amount owed and is relieved of
      responsibility for the remainder of the debt. 6
      If SSA issues benefits to a representative payee after an OASDI beneficiary’s death or the
      representative payee received overpaid benefits before the OASDI beneficiary’s death for
      which the payee is responsible, SSA may recover the overpayment through its Non-Entitled
      Debtors program. This program allows SSA to control debts owed by beneficiaries not
      entitled to Social Security benefits (or Supplemental Security Income 7 payments). 8




1
    SSA, POMS, GN 02210.150, A (August 16, 2006).
2
    SSA, POMS, GN 02210.001 (October 12, 2018).
3
    SSA, POMS, GN 02210.008, A (April 25, 2013).
4
    SSA, POMS, GN 02205.005, A (December 20, 2012) and GN 02210.015, A.2 (February 13, 2012).
5
    SSA, POMS, GN 02210.180, A (July 1, 2016).
6
    SSA, POMS, GN 02215.100, A (December 13, 2005).
7
  Supplemental Security Income is a needs-based program for aged, blind, or disabled persons. Recipients must
meet certain income and resource limits for eligibility. Social Security Act, 42 U.S.C. § 1381 (govinfo.gov 2017);
Social Security Act, 42 U.S.C. §§ 1382a-1382b (govinfo.gov 2017);and SSA, POMS, SI 00501.001, B.1
(January 18, 2005).
8
    SSA, POMS, GN 02230.035 (October 31, 2017).



Overpayment Recovery When a Contingently Liable Beneficiary Stops Receiving Benefits (A-04-18-50651)             B-1
SSA’s External Collection Operation
If debts meet certain selection criteria, SSA uses its External Collection Operation to refer
delinquent debts to the following external collection methods.

      The Treasury Offset Program enables the Department of the Treasury to recover a
      beneficiary’s delinquent debt by offsetting any Federal or State payment due that
      beneficiary. 9

      Administrative Wage Garnishment is the process whereby SSA orders an employer to
      withhold amounts each pay period from an employee who owes a debt to the Agency, and
      the employer pays those amounts to SSA.10

      Federal Salary Offset is the process whereby the employing agency withholds amounts each
      pay period from a Federal employee who owes a debt to the Agency. 11

      Credit bureau reporting is the posting of a debt to a beneficiary’s credit record. SSA uses
      credit bureau reporting as a way of influencing a debtor to repay a debt. 12




9
    SSA, POMS, GN 02201.029, A.2 (March 9, 2016).
10
     SSA, POMS, GN 02201.040, A.2 (May 25, 2012).
11
     SSA, POMS, GN 02201.043, A.2 (March 9, 2016).
12
     SSA, POMS, GN 02201.032, A.2 (March 9, 2016).


Overpayment Recovery When a Contingently Liable Beneficiary Stops Receiving Benefits (A-04-18-50651)   B-2
                                – AGENCY COMMENTS




                                            SOCIAL SECURITY

MEMORANDUM


Date:      May 1, 2019                                                                   Refer To:   S1J-3

To:        Gail S. Ennis
           Inspector General


From:      Stephanie Hall
           Acting Deputy Chief of Staff

Subject:   Office of the Inspector General Draft Report, “Recovery of Old-Age, Survivors and Disability
           Insurance Overpayments When a Contingently Liable Beneficiary Stops Receiving Benefits” (A-
           04-18-50651) -- INFORMATION

           Thank you for the opportunity to review the draft report. Please see our attached comments.

           Please let me know if we can be of further assistance. You may direct staff inquiries to
           Trae Sommer at (410) 965-9102.




           Overpayment Recovery When a Contingently Liable Beneficiary Stops Receiving Benefits (A-04-18-50651)   C-1
SSA COMMENTS ON THE OFFICE OF THE INSPECTOR GENERAL DRAFT
REPORT, “RECOVERY OF OLD-AGE, SURVIVORS AND DISABILITY INSURANCE
OVERPAYMENTS WHEN A CONTINGENTLY LIABLE BENEFICIARY STOPS
RECEIVING BENEFITS” (A-04-18-50651)

GENERAL COMMENTS

We are working to strengthen our debt recovery processes, and in fiscal year 2018, we initiated a
comprehensive multi-year project to consolidate, modernize, and streamline our debt collection
processes into one system. This new system will improve our ability to track and transfer debts
when a contingently liable beneficiary stops receiving benefits.

Our response to the recommendations are below.

Recommendation 1

Review the 1,030 terminated contingently liable records and take action to adjust benefits.

Response

We agree.

Recommendation 2

Review and take action to remove the overpayment balance from the 4,690 terminated
contingently liable beneficiaries and transfer the debt balance to the original debtor for an
immediate payment of the overpayment or seek recovery through additional debt collection
tools.

Response

We agree.

Recommendation 3

Establish controls to remove the outstanding debt from terminated contingently liable
beneficiaries and transfer the balance to the original debtor for an immediate payment of the
overpayment or seek recovery through additional debt collection tools when available.

Response

We agree.




Overpayment Recovery When a Contingently Liable Beneficiary Stops Receiving Benefits (A-04-18-50651)   C-2
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the Inspector General (OIG) inspires public confidence in the integrity and security of the Social
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