20 CFR 416.550, 416.551, 416.552, 416.553, 416.554, 416.555, 416.1160, 416.1165, 416.1167(a), and 416.1856
The issue before the AC was whether recovery of the overpayment of SSI benefits incurred by R can be waived.
The representative payee was receiving SSI benefits on behalf of R, her 13-year-old son. Although R was residing at a school for the mentally retarded in Pennsylvania beginning September 8, 1980, he was subject to parental control and came home every third weekend and for several 2-week vacations during the year. Accordingly, under § 416.1167(a)(2) of Regulations No. 16, R, while attending school, was considered only temporarily absent from his parents' household. Therefore, under § 416.1165 of Regulations No. 16, R's ineligible parents' income, less the applicable allocations explained in that section, was deemed to R as unearned income.
R's deemed income was $2,913.48 a month. He was, therefore, not eligible for SSI benefits effective October 1980. He was erroneously paid SSI benefits through August 1981 and thus was overpaid $2,671.40 for the period October 1980 through August 1981.
The AC concurred with the decision of an administrative law judge (ALJ) that R and the payee were "without fault" in causing the overpayment and that the payee was not liable for its recovery. R was eligible for SSI benefits while he was at the New Jersey school, and the ALJ had found that neither he nor his parents could have been expected to know that a transfer to the Pennsylvania school would have caused him to become ineligible. Because the payee was "without fault" and the record showed that she had used the amounts received for the benefit of R, the ALJ had concluded, under SSR 64-7 (C.B. 1964), that the payee was not liable for refund of the overpayment. SSR 64-7 provides, however, that a representative payee and a beneficiary may, under certain circumstances, be jointly and individually liable for an overpayment. R had received the use and benefit of the amount overpaid, and the question remained as to whether the overpayment should be recovered from him.
Section 1611(a) of the Act, in part, provides certain income limitations that a person must meet to be eligible for SSI benefits.
Section 1614(c) of the Act defines "child" to mean an individual who is neither married nor the head of a household, and who is (a) under the age of 18 or (b) under the age of 22 and a student regularly attending school, college, or university, or a course of vocational or technical training designed to prepare him for gainful employment.
Section 1614(f)(2) of the Act provides that "For purposes of determining eligibility for and the amount of benefits for any individual who is a child under age 18, such individual's income and resources shall be deemed to include any income and resources of a parent of such individual (or the spouse of such a parent) who is living in the same household as such individual, whether or not available to such individual, except to the extent determined by the Secretary to be inequitable under the circumstances."
Section 416.1160(a) of Regulations No. 16 provides, in pertinent part, that, "if you are a child living in the same household as your ineligible parent, we look at that person's income to determine whether we must consider (deem) some of it to be your income . . . . We use the term 'deeming' to identify the process of considering another person's income to be your own income . . . . We deem income because we expect your . . . ineligible parent with whom you live to use part of his or her income to take care of some of your needs. . . ."
Section 416.1165 of Regulations No. 16 explains how income from an ineligible parent is deemed to a child as unearned income.
Section 416.1167(a) of Regulations No. 16, in part, provides that "if you and your ineligible . . . parent stop living in the same household, we stop applying deeming rules with the first full month that one of you is absent, unless the absence is temporary. . . . (2) If you are an eligible child who is away at school but comes home on some weekends or lengthy holidays and if you are subject to the control of your parents, we consider you temporarily absent from your parent's household. . . ."
Section 416.550 of Regulations No. 16 provides that "Waiver of adjustment or recovery of an overpayment of supplemental security income benefits is applicable (see section 1631(b) of the Act) when:
Section 416.551 of Regulations No. 16 provides, in pertinent part, that "Waiver of adjustment or recovery of an overpayment from anyone other than the overpaid person himself . . . does not preclude adjustment or recovery against the overpaid person . . . ."
Section 416.552 of Regulations No. 16 provides, in pertinent part, that "Whether an individual is 'without fault' depends on all the pertinent circumstances surrounding the overpayment in the particular case. The Social Security Administration considers the individual's understanding of the reporting requirements, the agreement to report events affecting payments, knowledge of the occurrence of events that should have been reported, efforts to comply with the reporting requirements, opportunities to comply with the reporting requirements, understanding of the obligation to return checks which were not due, and ability to comply with the reporting requirements (e.g., age, comprehension, memory, physical and mental condition). Although the finding depends on all of the circumstances in the particular case, an individual will be found to have been at fault in connection with an overpayment when an incorrect payment resulted from one of the following:
Section 416.553(a) of Regulations No. 16 provides that "We consider adjustment or recovery of an overpayment to defeat the purpose of the supplemental security income (SSI) program if the individual's income and resources are needed for ordinary and necessary living expenses under the criteria set out in § 404.508(a) of this chapter."
Section 416.554 of Regulations No. 16 provides, in pertinent part, that "Adjustment or recovery is considered to be inequitable and contrary to good conscience when such person, in reliance on such payments or on notice that such payment would be made relinquished a valuable right or changed his position for the worse . . . ."
Section 416.555 of Regulations No. 16 provides, in pertinent part, that whether recovery or adjustment of an overpayment would impede efficient or effective administration "is measured by the current average administrative cost of handling such overpayment case through such adjustment or recovery process."
Under § 416.551, the ALJ's decision that the payee was not liable for refund of the overpayment did not preclude recovery from R, even though R was "without fault." R's deemed monthly income of $2,913.48 greatly exceeded his ordinary and necessary living expenses as the New Jersey Division of Mental Retardation paid the cost of his attending the Pennsylvania school. Therefore, recovery of the overpayment from R would not defeat the purpose of title XVI. Furthermore, there was no indication that recovery would be against equity or good conscience, nor was the overpayment so small that its recovery would impede efficient or effective administration. Accordingly, the AC concluded that recovery of the overpayment from R cannot be waived.
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