I-2-9-65.Conditions Necessary for Reopening Due to Fraud or Similar Fault

Last Update: 9/28/05 (Transmittal I-2-65)

Citation:

In order for an Administrative Law Judge (ALJ) to reopen a determination or hearing decision, which is otherwise final, on the basis that it was obtained by fraud or similar fault, the conditions set forth below must be met.

NOTE:

Fraud or similar fault may be perpetrated by a claimant or any other person (e.g., a representative, interpreter, medical provider, or an SSA employee). It is not necessary that the other person have any direct relationship to the claimant or be acting on behalf of the claimant.

A. Fraud requires establishment of the intent to defraud.

Fraud is present when an individual, with intent to defraud, either:

  1. makes or causes to be made a false statement or a misrepresentation of a material fact for use in determining rights under Title II or Title XVI; or

  2. conceals or fails to disclose a material fact for use in determining rights under Title II or Title XVI.

NOTE:

Because fraud requires the establishment of the intent to defraud, it is generally appropriate to limit findings of fraud to specific cases in which an involved party has pleaded guilty or has been convicted of a criminal offense involving fraud.

B. Similar fault is present when an individual either:

  1. knowingly makes an incorrect or incomplete statement that is material to the determination; or

  2. knowingly conceals information that is material to the determination.

    • A statement or information is material if it could influence SSA in determining rights to payments under the Social Security Act.

    • “Knowingly” is used to describe how a person acts in furnishing information that he or she knows is false or incomplete.

C. Considerations for Reopening for "Similar Fault" in Title XVI Cases.

The following factors are needed to establish "similar fault" to reopen an SSI determination which is more than 2 years old:

  1. The changed event is material (i.e., will change the SSI payments) and will create a new overpayment or enlarge an existing overpayment;

  2. A wide discrepancy exists between the new data and the data reported;

  3. The SSI recipient (or other person) knowingly completed an incorrect or incomplete report, knowingly concealed events or changes, or knowingly neglected to report events or changes that affect payments;

  4. The event (income, resource, etc.) can and will be verified;

  5. The event (income, resource, etc.) is clearly attributable to the SSI recipient (or the ineligible spouse, parent or sponsor of an alien in deeming situations); and

  6. The case does not involve intent to defraud.

D. Evaluation of Evidence in Reopened Cases

When an ALJ has made the determination to reopen a determination or ALJ decision on the basis that it was obtained by fraud or similar fault, the ALJ, for the purpose of making a revised determination or decision, should adhere to the guidance provided in SSR 00-2p and I-5-1-15 as to the evaluation of evidence and re-adjudication of the reopened claim. When the ALJ makes the decision to reopen a determination or decision on the basis that it was obtained by fraud or similar fault, then the guidance and rules for evaluating evidence in initial claims involving fraud or similar fault are equally applicable in such instances.

E. Notice Requirements in Reopened Cases

In preparing the Notice of Hearing for readjudication of a determination or decision which has been reopened on the basis that the prior determination or decision was obtained through “fraud or similar fault”, provide notice of the issue of “fraud or similar fault”. Sample language for such notice is:

The Administrative Law Judge will determine whether a prior favorable determination or decision rendered on _____ [date] based upon a claim for benefits which you filed on ______ [date] should be reopened on the basis that Sections 205(u) and 1631(e)(7) of the Social Security Act, as amended, require that evidence in a claim for benefits be disregarded if there is reason to believe that “fraud or similar fault” was involved in providing such evidence. If the Administrative Law Judge determines that your claim should be reopened and revised based upon a finding that “fraud or similar fault” was involved in providing such evidence to support your prior favorable claim, then the Administrative Law Judge will consider what evidence which was provided in the prior determination or adjudication, if any, should be disregarded on the basis that “fraud or similar fault” was involved in providing such evidence for consideration in the adjudication of your claim.

Provide other notice provisions (i.e., issues involved in the adjudication of an initial claim).

F. Contents of Revised Decision

The revised Decision must:

  1. Explain the provision of the Social Security Act that allows particular evidence to be disregarded due to a “similar fault” finding.

  2. Identify the documents being disregarded.

  3. Discuss the evidence and provide rationale for a finding that evidence be disregarded.

  4. Provide a revised decision based on an evaluation of the remaining evidence using the criteria for such determination as if the claim were an initial claim.

  5. Include standard appeal language.