SSR 70-54: SECTION 204(a). -- OVERPAYMENT -- ADJUSTMENT OR RECOVERY -- LIMITED TO BENEFITS PAYABLE ON RECORD OF DECEASED OVERPAID INDIVIDUAL OR FROM HIS ESTATE
20 CFR 404.502(b)
- Where an overpaid title II beneficiary dies, leaving no estate, and, pursuant to section 204(a) of the Social Security Act, adjustment of a portion of the overpayment can be made by withholding the lump-sum death payment and the single month's widow's insurance benefit then payable to the widow on the decedent's earnings record, held, the widow has no personal liability under the law for making such refund of the balance of the overpayment out of her own earnings or out of any benefits she may subsequently be entitled to receive on her own earnings record other than that of the decedent.
R, a retirement insurance beneficiary, died after having been overpaid $2,133 in social security benefits. Following R's death, D, his widow, filed an application for the lump-sum death benefit payable on his earnings record, as well as for a widow's insurance benefit to which she was also entitled on his earnings record. D was notified that the overpaid amount, $2,133, must be recovered by the Social Security Administration in accordance with the terms of section 204(a) of the Social Security Act which provides, as pertinent here, that:
- Whenever the Secretary finds that more or less than the correct amount of payment has been made to any person under this title, proper adjustment or recovery shall be made, under regulations prescribed by the Secretary, as follows: (1) With respect to payment to a person of more than the correct amount, the Secretary shall decrease any payment under this title to which such overpaid person is entitled, or shall require such overpaid person or his estate to refund the amount in excess of the correct amount, or shall decrease any payment under this title payable to his estate or to any other person on the basis of the wages and self- employment income which were the basis of the payments to such overpaid person, or shall apply any combination of the forgoing. . . .
Pursuant to these provisions, the Administration withheld the lump-sum death benefit payable to D on her deceased husband's earnings record. The one-month's widow's insurance benefit to which she was found entitled on his earnings record has also been withheld. However, while this reduced the amount of the overpayment to be recouped, a balance of $1,766.40 remains. R, the deceased overpaid person, died insolvent, leaving no estate out of which recovery could be sought. Also, no further widow's insurance benefits are currently payable to D because of the amount of her earnings. This has raised a question whether D, as the widow of the deceased overpaid person, may be personally liable for refund of the overpayment balance out of her own earnings.
Section 204(a) of the Act, cited supra, permits the Administration to recoup an overpayment of benefits from the overpaid person or from his estate, or by withholding benefits payable on the overpaid person's earnings record. Further, in some instances, the distributee of an estate may be required to make a refund from his personal assets if the proceeds of an overpayment can actually be traced to him. Applying these rules in this case, then, the overpayment at issue may be recovered from the widow only as long as widow's benefits are payable to her on her deceased husband's earnings record. To recoup this overpayment such benefits may be completely withheld, or payments to her may be reduced, until the entire overpayment is recovered. Where can individual entitled to widow's insurance benefits is working and has earnings in an amount precluding payment of such benefits to her under section 203(b) of the Act, she is not required, during such period, to repay the overpayments made to her deceased husband. However, if and when the widow no loner has such "excess earnings" and payment to her of widow's benefits is resumed, those benefits would again be subject to deductions. The Administration's right to continue these deductions is not subject to any statute of limitations.
It is accordingly held that where a deceased overpaid beneficiary left no estate from which the overpayment might be recouped, section 204(a) of the Social Security Act imposes no personal liability for refund on the widow, D, or on benefits due her on her own earnings record.