Transcript Slide 1

Introduction to SSA
Overpayment Issues
Kirkland & Ellis
September 2009
Presentation by: Thomas Yates, Health &
Disability Advocates
Some Background Terminology
Programs offered by Social Security
Administration (SSA):
o Social Security Old Age, Retirement,
and Disability Programs (OASDI); and
o Supplemental Security Income (SSI).
Old Age, Retirement, and
Disability Insurance
o Social Security taxes pay for three kinds of benefits:
retirement, disability and survivors. Payment amounts
vary.
o If you are eligible for retirement or disability benefits,
other family members might receive benefits. These
include: your spouse if s/he is at least 62 years old or
under 62 but caring for a child under age 16 or 16 and
older but disabled and entitled to benefits on your record;
and your children if they are unmarried and are under
age 18, age 18–19 and attending high school full-time or
18 or older but disabled. If you are divorced, your exspouse could be eligible for benefits on your record.
o Social Security disability is also called SSDI.
Supplemental Security Income
o SSI provides monthly support to persons who are either
age 65 or older, disabled, or blind.
o Maximum SSI monthly payment for individual in Illinois in
2009 is $674; couples are paid $1,011. For comparison,
FPL for one person is $903, couple is $1,214.
o Must be U.S. Citizen or immigrant eligible for SSI
o Income limits: based on amounts of earned and
unearned income, size of household, and number of
persons who are SSI-eligible in household
o Resources limits: no more than $2,000 in countable
resources (home, personal belongings, and one motor
vehicle exempt); $3,000 for couple.
SSI Rules and Regulations
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Because SSI is need-based welfare program, it has
extensive rules about eligibility. The rules address the
following requirements:
Family status
Living Arrangements
Gifts, inheritances, tax refunds, and other unearned
income
Salaries and wages
Real and personal property
Savings
Disability Standard
o Social Security pays SSDI and SSI benefits to people who cannot
work because they have a medical condition that is expected to last
at least one year or result in death.
o People who have worked 5 out of the last 10 years prior to disability
onset are SSDI-eligible. Others must look to SSI.
o Social Security defines work to exclude jobs in which a person’s
gross monthly wages or salary are less than $980. Thus, many
Social Security and SSI recipients who are disabled work part-time
jobs.
o The Social Security Administration encourages disability claimants
to return to work in hopes that they will leave the disability rolls.
o Work earnings may impact amount of benefits to be paid in SSDI
and SSI programs.
Overpayments
o For both programs, OASDI and SSI, federal law requires
that SSA collect all overpayments made, regardless of
cause. Overpayments are collected by recouping
overpaid amounts from future checks, seizing federal
income tax returns and other federal funds owed, and in
some cases by collection lawsuits or wage garnishment.
o SSA will waive collection of overpayments when
claimants show that they were without fault in causing
overpayment. The fault standard is strict.
o Even when claimants cannot show they were without
fault, SSA will agree to repayment plans that recoup less
or require smaller monthly payments in many cases.
How SSA Recoups
Overpayments
o For persons currently receiving benefits, SSA
will recoup from monthly benefits checks. For
OASDI checks, SSA takes 100% of each check
until recovery is completed. For SSI, assuming
no fraud, only 10% of SSI amount ($67.40 in
2009) can be recouped monthly.
o SSA also can seize other government payments
such as income tax refunds or, in limited
circumstances, garnish wages if the person who
was overpaid is working.
SSA Processes are Confusing
o Sometimes overpayment notices come out of SSA
headquarters in Baltimore and the local Social
Security office (District Office) is unaware.
o Sometimes overpayments notices are issued by
Social Security local offices or Regional Offices.
o SSA notices are often poorly drafted and confusing.
o Notices can be different---”overpayment is coming”
notice vs. “overpayment is here!” notice.
Overpayments Happen
o Situations change and the SSA rules about how those
changes impact eligibility are complex and confusing.
o SSA beneficiaries often don’t know what needs to be
reported, assume SSA knows what is happening, or
otherwise don’t report the changes. For example,
many recipients also receive benefits through the
Illinois Department of Human Services and they do
not understand that SSA and the Illinois Department
of Human Services do not communicate with each
other regarding information regarding eligibility.
o SSA has never come up with an adequate system for
tracking changes and implementing its rules despite
repeated complaints by Congress and the public.
The Problem of Overpayments
o General Accounting Office Report Released in 2004
demonstrates the widespread and enormous problem
with overpayments.
o Dollar amount of overpayments has increased from
$772 Million in 1999 to $990 Million in 2003.
o The more complex eligibility rules become, the often
overpayments occur.
o Employment by recipients and recipients’ family
members is most common cause of overpayments:
31% of SSDI overpayments attributable to
employment.
Most Overpaid Claimants Aren’t
Cheats!
o Most overpaid claimants are not trying to get away
with something. People who are cheating the system
are referred to local U.S. Attorney for criminal
prosecutions or face administrative fines. This
Project will not refer such clients for pro bono help.
o Most SSA beneficiaries assume that SSA knows what
it is doing even though many overpayments are the
fault of SSA.
o The rules are confusing enough that people often do
not actually know if they are/were entitled to a check.
o Others have cognitive difficulties or low reading levels
and do not understand the eligibility rules.
Common Causes of Overpayments
o Employment Income and Failure to Report
Wages or Failure of SSA to Act on Claimant’s
Report of Income;
o SSA fails to determine whether claimants are
entitled to possible deductions from earned
income.
o Resource Changes affect SSI eligibility.
o Life Status Changes affect SSI eligibility
(marriage, new living arrangement, child in
household turns 18, etc.)
Incomplete Information Abounds
o SSA often makes overpayment determinations based
upon inaccurate or incomplete information.
o SSA may not have properly determined countable
income because they have no information on possible
work deductions.
o SSA obtains information from IRS and IRS
information does not break down income by month,
so income averaging or when earned income was
received may be an issue.
o IRS information obtained by SSA makes no
distinction between earned and unearned income.
Working Up an Overpayment Case
o Legal Services agency will provide initial summary of
facts with relevant documents and recommended
course of action
o Interview client to fill in all the gaps in information.
o Accurately characterize the income/resources/other
eligibility factor that are seen as causing the
overpayment or obtain information for waiver and/or
negotiation.
o Follow up with Social Security to pursue chosen
remedy.
o Referring Legal Services agency contact is available
for questions/assistance.
Legal Options in Dealing with an
Overpayment
o Challenge Overpayment by Filing an Appeal
(Request for Reconsideration) or Seek ReOpening of Issue in which Appeal was not filed
Timely
o File a Request for Waiver
o Negotiate a Lower Payment Amount or More
Favorable Payment Plan
o Assist client whose benefits have been cut off in
qualifying for Expedited Reinstatement of
Benefits in appropriate cases.
Dealing with SSA
o Most cases will involve working with staff
at Social Security District Offices (DOs).
Metro Chicago area has 25 DOs.
o Each DO has an attorney liaison who is
first contact point. Case handlers will be
provided with direct dial numbers for
liaisons.
o Regional SSA staff, based in Chicago, can
be consulted in problematic cases.
Appealing Overpayment: Request
for Reconsideration
o SSA-561-U2 Form: “Request for Reconsideration” or
Letter requesting Reconsideration of Decision.
o Reason for appeal: “The overpayment amount is
incorrect and/or I was not overpaid.” If the claimant was
overpaid, but the overpayment was not his/her fault, then
waiver is appropriate remedy.
o Must be filed within 60 days unless good cause (within
65 day of date on notice) applies.
o If appeal period has run, request late filing of appeal
based on good cause or reopening based on new and
material evidence.
o Appeal should set forth legal and factual basis for
challenging overpayment.
Request for Reconsideration, Cont.
o All correspondence with District Office needs to be
mailed by certified mail, or faxed to prove that it was
received at DO.
o Once Request for Reconsideration has been filed, or
Request for Late Filing or Reopening has been
requested, Advocate must be proactive in following up
with District Office to ensure that request is being
considered.
o If Request for Reconsideration is denied, Request for
Hearing may be requested within 60 days of decision
(within 65 days of date on notice). Non-adversarial de
novo hearing will be heard by Social Security
Administrative Law Judge.
Request for Waiver
o Form SSA-632-BK: “Request for Waiver of Overpayment
Recovery or Change in Repayment Rate”.
o May be filed at ANY TIME. No time limit.
o Reason for waiver: “I owe the overpayment but it was not
may fault and I cannot afford to repay it and/or it is unfair
and/or not worth it to make me repay it.”
o Must show 1) that claimant was not at fault in causing
the overpayment; and 2) recovery would a) defeat the
purpose of the SSA, b) be against equity and good
conscience, or (for SSI only) impede the effective and
efficient administration of the SSI program.
o If waiver is denied, appeal can be filed.
Negotiation
o Always an option at any stage in the process.
o No specified SSA form for requests for negotiation.
o Requests for Negotiation are handled at the SSA District
Office level.
o The claimant needs to provide a reasonable monthly
repayment plan and provide documentation to support
the plan (e.g., based on my current benefits and my
current monthly expenses for essential items (rent, food,
utilities, etc.) I can only pay proposed amount and still
meet my essential needs.
Expedited Reinstatement (EXR)
Must apply within 5 years of termination of
benefits.
Stopped receiving benefits because of work.
Must continue to meet the medical definition of
disability and not be earning over SGA.
Use medical improvement standard.
Decision is made quickly.
Eligible for 6 months provisional benefits while a
decision is pending.
How Attorneys and
Paralegals Can Help
o Clients do not understand legal standards for
overpayment appeals, waiver requests, and
negotiations.
o Clients are not able to succinctly state their cases to
SSA or let their emotions color their communications
with SSA.
o Legal Service agencies lack resources to address need.
o SSA is part of the problem: increased legal
representation on overpayment issues may provide
impetus to change complicated and unworkable eligibility
standards.
Case Example-Kathy Peoples
o Ms. Peoples has received SSDI disability benefits for 15
years. She was found disabled and eligible for SSDI
starting in January 1994. She received LTD benefits
from Cigna from August 1993 through August 1995
when those benefits ended.
o In 1999, Ms. Peoples worked as a classroom aide for an
elementary school near where she lived.
o In 2004-2005, Ms. Peoples worked a part-time work as a
secretary for her church. That job ended when she had
back surgery.
Kathy Peoples continued
Case raised three related issues:
o Trial work period—LTD benefits were improperly
considered to be work income.
o Information relied upon by SSA about wages relied in
1999 was incorrect.
o Wages received in 2005-2006 were not above the
substantial gainful activity level due to Ms. Peoples’s
Impairment-Related Work Expenses.
o Sample letter attached addressing these issues in
support of Request for Reconsideration.
Case Example: Carrie Askins
o Notice of Overpayment Reason: YOU SHOULD HAVE
REPORTED YOUR MARRIAGE.
o Notice does not indicate what proof they have that Carrie
Askins was married or living with a husband.
o SSI regulations provide that spousal income be
considered in determining SSI eligibility when SSI
applicant/recipient is married and living with spouse.
o Next step would be to file Request for Reconsideration
and provide evidence. A request for waiver may be filed
at the same time as well.
Carrie Askins continued
o Sample Referral form is attached that sets forth the facts
in Ms. Askins’s case. The form sets forth next steps and
proposes that a Request for Reconsideration and a
Request for Waiver be filed simultaneously.
Sources of Law
o OASDI and SSI overpayments, waivers, and
negotiations are governed by 3 sets of rules:
o Federal Regulations: 20 CFR Parts 404 and 416
o Program Operations Manual System (POMS)
o Social Security Rulings (SSRs)
All are found at the SSA website:
www.socialsecurity.gov.