Overpayment Appeal and Waiver Rights

SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 410

RIN 0960-AD99

Overpayment Appeal and Waiver Rights

AGENCY: Social Security Administration (SSA).

ACTION: Final rules.

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SUMMARY: In these final regulations we address the rights of

individuals regarding overpayment and waiver

[[Page 56127]]

determinations in the Social Security and Black Lung benefits programs

by stating policy established as a result of a series of court

decisions, beginning with the 1974 court decision in Buffington, et al.

v. Weinberger and including the Supreme Court decision in Califano v.

Yamasaki. The effect of these final regulations is to codify these

additional rights for overpaid individuals established in these court

decisions.

EFFECTIVE DATE: These final rules are effective December 2, 1996.

FOR FURTHER INFORMATION CONTACT: Lois Berg, Legal Assistant, 3-B-1

Operations Building, 6401 Security Boulevard, Baltimore, MD 21235,

(410) 965-1713 for information about these rules. For information on

eligibility or claiming benefits, call our national toll-free number,

1-800-772-1213.

SUPPLEMENTARY INFORMATION:

Background

Section 204(b) of the Social Security Act (the Act) provides that

the Commissioner of Social Security (the Commissioner) shall not

recover an old-age, survivors, and disability insurance (OASDI)

overpayment from any individual who is without fault in causing the

overpayment if recovery from that individual would ``defeat the

purpose'' of title II of the Act or be ``against equity and good

conscience.'' Sections 205(a) and 702(a)(5) of the Act authorize the

issuance of regulations regarding our overpayment recovery policies.

Sections 411(b) and 426(a) of the Black Lung Benefits Act (30

U.S.C. 921(b) and 936(a)), authorize the Commissioner to issue

regulations to administer the provisions of the Black Lung benefits

program. The provisions for recovery of an overpayment from an

individual under the Black Lung benefits program (Part B) regulations

generally parallel the regulations of the OASDI programs.

On October 22, 1974, the U.S. District Court for the Western

District of Washington in Buffington, et al. v. Weinberger, No. 734-

73C2, stopped SSA from recovering overpaid Social Security benefits

without first giving each member of the plaintiff class adequate

written notice of the overpayment determination and the right to a pre-

recoupment hearing.

The court ordered that the written notice must include:

1. A statement of the alleged overpayment, an explanation of the

basis for the overpayment and SSA's proposed action to recover the

overpayment;

2. A statement of the individual's right to a pre-recoupment

hearing;

3. Instructions and forms for requesting a pre-recoupment hearing;

4. An explanation that if the individual did not request a pre-

recoupment hearing within 30 days of the date of mailing of the

overpayment notice, it would be presumed that the individual waived

his/her right to the hearing and recovery of the alleged overpayment

would begin;

5. A statement of any other administrative relief available (i.e.,

reconsideration of the fact and/or amount of overpayment and waiver of

recovery of the overpayment); and

6. A statement that an SSA office would help the individual

complete and submit forms for appeal or waiver requests.

The court also ordered the following:

1. SSA had to restore all benefits withheld from the named

plaintiffs pending an opportunity for a pre-recoupment hearing.

2. Each individual had to be given the opportunity to examine his/

her claims file at least 5 days prior to the date of the pre-recoupment

hearing.

3. The pre-recoupment hearing had to be conducted by an SSA

employee who had no prior knowledge of the events leading to the

overpayment determination and the decision to recover the overpayment.

4. At the hearing, the individual had to be given the opportunity

to:

Appear personally, testify, and cross-examine any

witnesses;

Be represented by an attorney or other representative; and

Submit documents for consideration at the hearing.

The court did not require that a transcript be made of the hearing.

5. After the hearing, SSA had to issue a written decision to the

individual (and his/her representative, if any) specifying the findings

of fact and conclusions in support of the decision and advising of the

individual's right to appeal the decision.

In accordance with the court order, SSA began to issue overpayment

notices containing all of the aforementioned information and to offer

pre-recoupment hearings to all class members.

On June 20, 1979, the Supreme Court held in Califano v. Yamasaki,

442 U.S. 682 (1979), that individuals who file a written request for

waiver are entitled to the opportunity for a pre-recoupment oral

hearing, but those who request only reconsideration are not so

entitled. Thereafter, SSA applied revised overpayment notice and pre-

recoupment hearing procedures to all individuals determined to be

overpaid under the title II or Black Lung benefit programs. On July 31,

1981, the Buffington court required SSA to schedule pre-recoupment

hearings automatically for individuals whose request for waiver of

overpayment recovery could not be approved after initial paper review.

On February 10, 1983, the Buffington court approved procedures

developed by SSA in response to the 1981 decree whereby pre-recoupment

hearings would be scheduled automatically but ordered SSA to schedule

the hearings through a written notice to the claimant. The scheduling

letter had to contain the date, time and place of the hearing; the

procedure for reviewing the claims file before the hearing; the

procedure for seeking a change in the scheduled date, time, and/or

place; and all other information necessary to fully inform the claimant

about the pre-recoupment hearing. SSA began to automatically schedule

pre-recoupment hearings in writing in April 1983. The court also

retained jurisdiction over the matter and prohibited any changes in the

overpayment procedures it had approved without prior notification of

plaintiffs' counsel and prior approval from the court.

In its order of October 19, 1987, the Buffington court approved

SSA's plan to transfer waiver decisionmaking authority for Retirement

and Survivors Insurance overpayments from the processing centers to the

field offices. SSA implemented this change in July 1988.

On April 13, 1994, the Buffington court approved a stipulation

modifying the court's injunction in this matter. Under the stipulation,

plaintiffs agreed to withdraw counsel notification and court approval

requirements for future changes to SSA overpayment policies. In return,

SSA agreed to promulgate a Social Security Ruling (SSR) and then final

regulations embodying the overpayment requirements set forth in

Yamasaki, above. SSA published the SSR on July 11, 1994 (59 FR 35378),

published proposed regulations on June 2, 1995 (60 FR 28767), and is

now publishing final regulations to fulfill its commitments under the

stipulation.

Current Regulations

Our current regulations do not address the adequate notice, face-

to-face oral hearing, or appeal step issues noted above. However, SSA

has been complying with the court orders described above through

program instructions approved by the Buffington court.

[[Page 56128]]

Regulations Changes

We are restating in regulations the policies enunciated in the

court decisions and established in our program instructions. The final

regulations provide that when an overpayment is discovered, we notify

the individual immediately. The notice includes:

1. The overpayment amount and how and when it occurred;

2. A request for full, immediate refund, unless the overpayment can

be withheld from the next month's benefit;

3. The proposed adjustment of benefits if refund is not received

within 30 days after the date of the notice and adjustment of benefits

is available;

4. An explanation of the availability of a different rate of

withholding when full withholding is proposed, installment payments

when refund is requested and adjustment is not currently available,

and/or cross-program recovery when refund is requested and the

individual is receiving another type of payment from SSA (language

about cross-program recovery is not included in notices sent to

individuals in jurisdictions where this recovery option is not

available; currently, cross-program recovery is not available to

residents of New York and Pennsylvania);

5. An explanation of the right to request waiver of adjustment or

recovery and the automatic scheduling of a file review and pre-

recoupment hearing (commonly referred to as a personal conference) if a

request for waiver cannot be approved after initial paper review;

6. An explanation of the right to request reconsideration of the

fact and/or amount of the overpayment determination;

7. Instructions about the availability of forms for requesting

reconsideration and waiver;

8. An explanation that if the individual does not request waiver or

reconsideration within 30 days of the date of the overpayment notice,

adjustment or recovery of the overpayment will begin;

9. A statement that an SSA office will help the individual complete

and submit forms for appeal or waiver requests; and

10. A statement that the individual should notify SSA promptly if

reconsideration, waiver, a lesser rate of withholding, repayment by

installments or cross-program adjustment is wanted.

Form SSA-3105 (Important Information About Your Appeal and Waiver

Rights) is included with each overpayment notice. The SSA-3105 further

explains the pre-recoupment review process and contains a tear-off form

which the individual may complete and return to SSA if he/she wants

reconsideration and/or waiver.

The final regulations also provide that to ensure meaningful

opportunity to contest the correctness of an overpayment determination

and/or establish entitlement to waiver, the date on which full refund

is due and, if appropriate, the date on which adjustment will begin

must be at least 30 days after the date of the overpayment notice. If

the individual responds within 30 days after the date of the

overpayment notice, SSA must take action to ensure that benefit

payments are not interrupted. Any time waiver is requested, SSA stops

adjustment or recovery.

When waiver is requested, the individual gives SSA information

(usually on Form SSA-632-BK (Request for Waiver of Overpayment Recovery

or Change in Repayment Rate)) to support his/her contention that he/she

is without fault in causing the overpayment and that recovery would

either cause financial hardship or be inequitable. That information,

along with supporting documentation, is reviewed to determine if waiver

can be approved.

If waiver cannot be approved after this review, the individual is

notified in writing and given the dates, times and place of the file

review and personal conference; the procedure for reviewing the claims

file prior to the personal conference; the procedure for seeking a

change in the scheduled dates, times, and/or place; and all other

information necessary to fully inform the individual about the personal

conference. The file review is always scheduled at least 5 days before

the personal conference.

At the file review, the individual and the individual's

representative have the right to review the claims file and applicable

law and regulations with the decisionmaker or another SSA

representative who is prepared to answer questions. We will provide

copies of material related to the overpayment and/or waiver from the

claims file or pertinent sections of the law or regulations that are

requested by the individual or the individual's representative.

Although the individual may be represented at the personal

conference, he/she must also be present. This requirement is consistent

with the Supreme Court's reasoning in Califano v. Yamasaki. In

Yamasaki, the court concluded that written review could not satisfy

SSA's obligation to make an accurate waiver determination because an

evaluation of fault requires an evaluation of all pertinent

circumstances, such as the recipient's intelligence, and physical and

mental condition. The court said, ``We do not see how these can be

evaluated absent personal contact between the recipient and the person

who decides his case.'' Id. at 698.

SSA will provide suitable private space for the personal

conference. However, if the individual cannot come to the conference

site for a legitimate reason (e.g., he/she is incapacitated), SSA

personnel will travel as far as necessary to conduct the conference.

At the personal conference, the individual is given the opportunity

to:

1. Appear personally, testify, cross-examine any witnesses, and

make arguments;

2. Be represented by an attorney or other representative, although

the individual must be present at the conference; and

3. Submit documents for consideration by the decisionmaker.

At the personal conference, the decisionmaker:

1. Tells the individual that the decisionmaker was not previously

involved in the issue under review, that the waiver decision is solely

the decisionmaker's, and that the waiver decision is based only on the

evidence or information presented or reviewed at the conference;

2. Ascertains the role and identity of everyone present;

3. Indicates whether or not the individual reviewed the claims

file;

4. Explains the provisions of law and regulations applicable to the

issue;

5. Briefly summarizes the evidence already on file which will be

considered;

6. Ascertains from the individual whether the information presented

is correct and whether he/she fully understands it;

7. Allows the individual and the individual's representative, if

any, to present the individual's case;

8. Secures updated financial information and verification, if

necessary;

9. Allows each witness to present information and allows the

individual and the individual's representative to question each

witness;

10. Ascertains whether there is any further evidence to be

presented;

11. Reminds the individual of any evidence promised by the

individual which has not been presented;

12. Lets the individual and the individual's representative, if

any, present any proposed summary or closing statement;

[[Page 56129]]

13. Explains that a decision will be made and the individual will

be notified in writing; and

14. Explains further appeal rights in the event the decision is

adverse to the individual.

SSA issues a written decision to the individual (and his/her

representative, if any) specifying the findings of fact and conclusions

in support of the decision to approve or deny waiver and advising of

the individual's right to appeal the decision. If waiver is denied,

adjustment or recovery of the overpayment begins even if the individual

appeals.

If it appears that the waiver cannot be approved, and the

individual declines a personal conference or fails to appear for a

second scheduled personal conference, a decision regarding the waiver

will be made based on the written evidence of record. Reconsideration

is then the next step in the appeals process.

The final regulations also state that although a personal

conference decision on the waiver issue is an initial determination,

when an individual is appealing an initial determination of waiver

denial based on a personal conference, the first appeal step is an

administrative law judge (ALJ) hearing, bypassing the reconsideration

which generally follows initial determinations. We provide that the

appeal goes directly to an ALJ hearing in this situation because a

reconsideration is a review of the written evidence and would be less

comprehensive in scope than the preceding personal conference. However,

where an individual is appealing an initial determination of waiver

denial based solely on a review of the written evidence rather than a

personal conference (i.e., the individual chose to forego the personal

conference) the first appeal step is a reconsideration.

Additionally, an individual may concurrently appeal the substantive

determination that the overpayment occurred and request waiver of

recovery of the overpayment. The final regulations provide that when

the substantive determination is upheld on reconsideration and the

waiver is denied, even if it is denied solely on the basis of a review

of the written evidence, the next step in the appeal process for both

determinations is an ALJ hearing.

In addition to revising the regulations to codify the policy

established in these court decisions, we are also removing references

to title XVIII from Secs. 404.502a and 404.506. These references

address Medicare overpayment situations, which fall within the purview

of the Health Care Financing Administration (HCFA). Before HCFA became

a separate agency, SSA was responsible for both the Social Security

cash benefit program and the Medicare program. Consequently, HCFA has

historically relied on many of SSA's regulations that addressed similar

situations under titles II and XVIII of the Act. The recoupment of

overpayments has been one of these situations. However, because

differences in the two programs have increased, HCFA has determined

that modifications to the rules are necessary. As a result, HCFA is in

the process of promulgating its own regulations with regard to Medicare

overpayments. In the meantime, on September 19, 1996 (61 FR 63404),

HCFA published a final rule that incorporated the substantive content

of 20 CFR 404.502a and 404.506 into 42 CFR 405.357 and 404.358,

respectively. Therefore, we are removing the references to title XVIII

from the regulations text of these final regulations.

Comments on Notice of Proposed Rulemaking (NPRM)

On June 2, 1995, we published proposed rules in the Federal

Register at 60 FR 28767 with a 60-day comment period. We received three

letters with comments. Following are summaries of those comments and

our responses to them.

Comment: The final rules should also make comparable changes to the

title XVI overpayment/waiver regulations.

Response: Many title XVI overpayment/waiver policies are the same

as those in title II. As a result of the comments, we will begin a

separate NPRM to make conforming changes to the title XVI regulations

where the procedures are already the same. We will also evaluate the

need for any additional changes in the title XVI overpayment/waiver

procedures. If we determine additional changes are needed, we will

address them in the separate NPRM.

Comment: Additional improvements not specifically addressed in the

Buffington court order should be made to SSA's overpayment notices, and

these changes should be codified in the final rules.

Response: All of the notice requirements ordered by the court in

Buffington are addressed in the final rules. In addition, SSA has an

ongoing initiative to improve the quality of our notices, and our goal

is to examine and revise overpayment notices as necessary to meet

changing public needs. As part of this initiative, we solicited

comments from advocacy groups and made interim improvements to the

language. The National Senior Citizens Law Center and the Legal

Services for the Elderly, who were two of the commenters on the

proposed rules, were among those groups whose comments were used to

improve the notices. However, as a result of the longstanding court

injunction in Buffington which said we could not change overpayment/

waiver policy without court approval, the changes were never

implemented. Now that the injunction has been modified, we have focus-

tested the revised language and plan for further improvements.

As we work on the notices improvement initiative, we will

thoroughly consider all comments concerning the overpayment notices

that we received on the NPRM. However, any changes we adopt as a result

of these comments will be in the actual notices or in our operating

instructions, rather than in regulations. It is not appropriate for the

regulations to prescribe individual notice content at the level of

specificity advocated in the comments. Including in the regulations

overly restrictive provisions on notice content would eliminate our

flexibility in addressing other public concerns about the notices.

Comment: The regulations should explain circumstances where the

personal conference can address whether an overpayment exists, as

contrasted with whether the overpayment can be waived.

Response: The regulations do not impose restrictions on matters

that can be addressed at a personal conference. If SSA employees have

any confusion on this point, clarification through program instructions

would be a more appropriate remedy.

Comment: If the claimant does not clearly indicate which option he

or she wishes to pursue, it will be presumed that the claimant wishes

to challenge the overpayment.

Response: Adopting this comment could disadvantage the claimant. If

the presumption is that only the fact of overpayment is being

challenged (i.e., a request for reconsideration of the overpayment

determination), recovery efforts stop until a reconsideration

determination is made. If the determination is unfavorable to the

claimant, recovery efforts resume, even if the person appeals that

determination. When only reconsideration is requested, there is no

right to a personal conference with recovery delayed until the

determination is made. That right only attaches to a waiver request.

Comment: The regulations should state that SSA will refund all

withheld benefits if waiver is approved.

[[Page 56130]]

Response: SSA policy is to pay any improperly withheld benefits if

waiver is approved. However, this does not mean full repayment is

proper every time waiver is approved. For example, waiver may be denied

because, although the person was without fault in causing the

overpayment, recovery would not cause financial hardship. Recovery

begins. Subsequently, the person's financial situation changes for the

worse and waiver is again requested. Waiver is approved effective with

the date we determine the financial situation changed. Monies withheld

before that date were withheld properly and will not be repaid. SSA

policy also requires stopping recovery as of the month waiver is

requested. If SSA does not stop recovery timely, any money withheld as

of the date of the waiver request will be paid back.

Comment: The regulations should provide for the record of the

personal conference to be made available to the claimant.

Response: As stated in Secs. 404.506(d) and 410.561a(d), the

claimant has the right to review the claims file before the personal

conference. However, no transcript is made of the personal conference,

and no court has required one. The person is given a written record in

the form of the waiver determination. The new regulations at

Secs. 404.506(g) and 410.561a(g) provide that the written decision will

include findings of fact and conclusions in support of the decision.

Current program instructions explain that this determination will

specify all the evidence considered and the rationale for the

determination reached. This rationale must include any rebuttal of the

person's arguments. We believe the regulations, as drafted, along with

these program instructions provide sufficient safeguards while

retaining adequate agency flexibility.

Comment: The regulations should explain that any adjustment or

recovery that occurs before issuance of the notice of overpayment, or

after a claimant requests waiver or appeals the overpayment notice,

will be refunded promptly to the claimant.

Response: SSA does not begin overpayment adjustment or recovery

efforts until at least 30 days after the overpayment notice is sent.

However, we do have the right to refigure the overpayment amount before

we issue the overpayment notice. This policy was upheld in the Supreme

Court decision in Everhart, et al. v. Sullivan, 494 U.S. 83 (1990). If,

through error, benefits are improperly withheld, SSA policy is to pay

the benefits. To reemphasize this policy to all field employees who

deal with the overpayment and waiver processes, we will be sure that

program instructions clearly state that the money should be paid

promptly. However, we do not believe that it is appropriate to put this

in the regulations.

Comment: The regulations should mention the right of claimants to

subpoena witnesses at a personal conference or, if they need to,

escalate a matter to the administrative hearing level.

Response: Claimants may have witnesses testify at the personal

conference. If it becomes necessary to subpoena witnesses, SSA

procedures provide for escalating the matter to an ALJ hearing. We are

not changing the regulations to reflect this at this time because we

are looking into the feasibility of giving subpoena power to the

personal conference decisionmaker in the field office.

Comment: The regulations should mention SSA's policy to permit a

claimant to request waiver and appeal of the overpayment concurrently

or in any sequence.

Response: The commenter indicated that the policy should be stated

in the regulations because ``many agency employees appear to believe

that it is necessary for an overpayment appeal to be fully resolved

before any request for waiver can be processed or adjudicated.'' We do

not agree that ``many agency employees'' are confused about this

policy, which is currently in program instructions (section GN

02201.011 of the Program Operations Manual System (POMS)). However, we

will reemphasize this policy to all field employees who deal with the

overpayment and waiver processes the next time we issue this chapter of

the POMS or sooner, if necessary.

The following comments concern matters outside the scope of, and

therefore are not addressed in, these final regulations.

1. The regulations should clarify the relationship between the 30-

day rule, 60-day rule, and 10-day rule concerning overpayments.

2. The regulations should mention the claimants' right to receive

notice of the opportunity to decline cross-program recovery. (We note,

however, that this principle is already established at 20 C.F.R.

416.570.)

3. The regulations should explain how representative payees will be

treated.

4. The regulations should explain claimants' rights with respect to

underpayments and netted overpayments.

For the reasons discussed above, we have not changed the text of

the proposed rules to reflect the public comments. We have, however,

revised the introductory paragraph in Sec. 410.561, as shown in the

proposed rules, to add a phrase which is currently in that section of

the regulations and which was inadvertently omitted from the proposed

rules. Section 410.561 will then agree with Sec. 404.502a, which is a

corresponding section of the regulations. With this one exception, we

are publishing the proposed regulations unchanged as final regulations.

Regulatory Procedures

Executive Order 12866

We have consulted with the Office of Management and Budget (OMB)

and determined that these final regulations do not meet the criteria

for a significant regulatory action under Executive Order 12866. Thus,

they were not subject to OMB review.

Paperwork Reduction Act of 1980

These final regulations impose no new reporting or recordkeeping

requirements which are subject to review by OMB.

Regulatory Flexibility Act

We certify that these final regulations will not have a significant

economic impact on a substantial number of small entities because they

affect only individuals. Therefore, a regulatory flexibility analysis

as provided in Public Law 96-354, the Regulatory Flexibility Act, is

not required.

(Catalog of Federal Domestic Assistance: Program Nos. 96.001, Social

Security--Disability Insurance; 96.002, Social Security--Retirement

Insurance; 96.003, Social Security--Special Benefits for Persons

Aged 72 and Over; 96.004, Social Security--Survivors Insurance; and

96.005, Special Benefits for Disabled Coal Miners)

List of Subjects

20 CFR Part 404

Administrative practice and procedure; Death benefits; Old-Age,

Survivors, and Disability Insurance; Reporting and recordkeeping

requirements.

20 CFR Part 410

Administrative practice and procedure; Black lung benefits; Death

benefits; Disability benefits; Miners; Reporting and recordkeeping

requirements.

Dated: October 8, 1996.

Shirley S. Chater,

Commissioner of Social Security.

For the reasons set out in the preamble, parts 404 and 410 of

chapter

[[Page 56131]]

III of title 20 of the Code of Federal Regulations are amended as

follows.

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE

(1950- )

Subpart F--[Amended]

1. The authority citation for subpart F of part 404 continues to

read as follows:

Authority: Secs. 204(a)-(d), 205(a), and 702(a)(5) of the Social

Security Act (42 U.S.C. 404(a)-(d), 405(a), and 902(a)(5)); 31

U.S.C. 3720A.

2. Section 404.502a is revised to read as follows:

Sec. 404.502a Notice of right to waiver consideration.

Whenever an initial determination is made that more than the

correct amount of payment has been made, and we seek adjustment or

recovery of the overpayment, the individual from whom we are seeking

adjustment or recovery is immediately notified. The notice includes:

(a) The overpayment amount and how and when it occurred;

(b) A request for full, immediate refund, unless the overpayment

can be withheld from the next month's benefit;

(c) The proposed adjustment of benefits if refund is not received

within 30 days after the date of the notice and adjustment of benefits

is available;

(d) An explanation of the availability of a different rate of

withholding when full withholding is proposed, installment payments

when refund is requested and adjustment is not currently available,

and/or cross-program recovery when refund is requested and the

individual is receiving another type of payment from SSA (language

about cross-program recovery is not included in notices sent to

individuals in jurisdictions where this recovery option is not

available);

(e) An explanation of the right to request waiver of adjustment or

recovery and the automatic scheduling of a file review and pre-

recoupment hearing (commonly referred to as a personal conference) if a

request for waiver cannot be approved after initial paper review;

(f) An explanation of the right to request reconsideration of the

fact and/or amount of the overpayment determination;

(g) Instructions about the availability of forms for requesting

reconsideration and waiver;

(h) An explanation that if the individual does not request waiver

or reconsideration within 30 days of the date of the overpayment

notice, adjustment or recovery of the overpayment will begin;

(i) A statement that an SSA office will help the individual

complete and submit forms for appeal or waiver requests; and

(j) A statement that the individual receiving the notice should

notify SSA promptly if reconsideration, waiver, a lesser rate of

withholding, repayment by installments or cross-program adjustment is

wanted.

3. Section 404.506 is revised to read as follows:

Sec. 404.506 When waiver may be applied and how to process the

request.

(a) Section 204(b) of the Act provides that there shall be no

adjustment or recovery in any case where an overpayment under title II

has been made to an individual who is without fault if adjustment or

recovery would either defeat the purpose of title II of the Act, or be

against equity and good conscience.

(b) If an individual requests waiver of adjustment or recovery of a

title II overpayment within 30 days after receiving a notice of

overpayment that contains the information in Sec. 404.502a, no

adjustment or recovery action will be taken until after the initial

waiver determination is made. If the individual requests waiver more

than 30 days after receiving the notice of overpayment, SSA will stop

any adjustment or recovery actions until after the initial waiver

determination is made.

(c) When waiver is requested, the individual gives SSA information

to support his/her contention that he/she is without fault in causing

the overpayment (see Sec. 404.507) and that adjustment or recovery

would either defeat the purpose of title II of the Act (see

Sec. 404.508) or be against equity and good conscience (see

Sec. 404.509). That information, along with supporting documentation,

is reviewed to determine if waiver can be approved. If waiver cannot be

approved after this review, the individual is notified in writing and

given the dates, times and place of the file review and personal

conference; the procedure for reviewing the claims file prior to the

personal conference; the procedure for seeking a change in the

scheduled dates, times, and/or place; and all other information

necessary to fully inform the individual about the personal conference.

The file review is always scheduled at least 5 days before the personal

conference.

(d) At the file review, the individual and the individual's

representative have the right to review the claims file and applicable

law and regulations with the decisionmaker or another SSA

representative who is prepared to answer questions. We will provide

copies of material related to the overpayment and/or waiver from the

claims file or pertinent sections of the law or regulations that are

requested by the individual or the individual's representative.

(e) At the personal conference, the individual is given the

opportunity to:

(1) Appear personally, testify, cross-examine any witnesses, and

make arguments;

(2) Be represented by an attorney or other representative (see

Sec. 404.1700), although the individual must be present at the

conference; and

(3) Submit documents for consideration by the decisionmaker.

(f) At the personal conference, the decisionmaker:

(1) Tells the individual that the decisionmaker was not previously

involved in the issue under review, that the waiver decision is solely

the decisionmaker's, and that the waiver decision is based only on the

evidence or information presented or reviewed at the conference;

(2) Ascertains the role and identity of everyone present;

(3) Indicates whether or not the individual reviewed the claims

file;

(4) Explains the provisions of law and regulations applicable to

the issue;

(5) Briefly summarizes the evidence already in file which will be

considered;

(6) Ascertains from the individual whether the information

presented is correct and whether he/she fully understands it;

(7) Allows the individual and the individual's representative, if

any, to present the individual's case;

(8) Secures updated financial information and verification, if

necessary;

(9) Allows each witness to present information and allows the

individual and the individual's representative to question each

witness;

(10) Ascertains whether there is any further evidence to be

presented;

(11) Reminds the individual of any evidence promised by the

individual which has not been presented;

(12) Lets the individual and the individual's representative, if

any, present any proposed summary or closing statement;

(13) Explains that a decision will be made and the individual will

be notified in writing; and

(14) Explains repayment options and further appeal rights in the

event the decision is adverse to the individual.

(g) SSA issues a written decision to the individual (and his/her

representative, if any) specifying the

[[Page 56132]]

findings of fact and conclusions in support of the decision to approve

or deny waiver and advising of the individual's right to appeal the

decision. If waiver is denied, adjustment or recovery of the

overpayment begins even if the individual appeals.

(h) If it appears that the waiver cannot be approved, and the

individual declines a personal conference or fails to appear for a

second scheduled personal conference, a decision regarding the waiver

will be made based on the written evidence of record. Reconsideration

is then the next step in the appeals process (but see

Sec. 404.930(a)(7)).

Subpart J--[Amended]

4. The authority citation for subpart J of part 404 continues to

read as follows:

Authority: Secs. 201(j), 205(a), (b), (d)-(h), and (j), 221,

225, and 702(a)(5) of the Social Security Act (42 U.S.C. 401(j),

405(a), (b), (d)-(h), and (j), 421, 425, and 902(a)(5)); 31 U.S.C.

3720A; sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42 U.S.C. 405 note);

secs. 5, 6(c)-(e) and 15, Pub. L. 98-460, 98 Stat. 1802 (42 U.S.C.

421 note).

5. Section 404.907 is revised to read as follows:

Sec. 404.907 Reconsideration--general.

If you are dissatisfied with the initial determination,

reconsideration is the first step in the administrative review process

that we provide, except that we provide the opportunity for a hearing

before an administrative law judge as the first step for those

situations described in Sec. 404.930(a)(6) and (a)(7), where you appeal

an initial determination denying your request for waiver of adjustment

or recovery of an overpayment (see Sec. 404.506). If you are

dissatisfied with our reconsidered determination, you may request a

hearing before an administrative law judge.

6. Section 404.930 is amended by removing the word ``or'' at the

end of (a)(4) and the period at the end of (a)(5) and adding a

semicolon in its place and adding (a)(6) and (a)(7) as follows:

Sec. 404.930 Availability of a hearing before an administrative law

judge.

(a) * * *

(6) An initial determination denying waiver of adjustment or

recovery of an overpayment based on a personal conference (see

Sec. 404.506); or

(7) An initial determination denying waiver of adjustment or

recovery of an overpayment based on a review of the written evidence of

record (see Sec. 404.506), and the determination was made concurrent

with, or subsequent to, our reconsideration determination regarding the

underlying overpayment but before an administrative law judge holds a

hearing.

* * * * *

PART 410--FEDERAL COAL MINE HEALTH AND SAFETY ACT OF 1969, TITLE

IV--BLACK LUNG BENEFITS (1969- )

Subpart E--[Amended]

7. The authority citation for subpart E of part 410 is revised to

read as follows:

Authority: Secs. 411(a), 412(a) and (b), 413(b), 426(a), and 508

of the Federal Coal Mine Health and Safety Act of 1977, as amended

(30 U.S.C. 921(a), 922(a) and (b), 923(b), 936(a), and 957).

Section 410.565 also issued under 31 U.S.C. 952.

8. Section 410.561 is revised to read as follows:

Sec. 410.561 Notice of right to waiver consideration.

Whenever an initial determination is made that more than the

correct amount of payment has been made, and we seek adjustment or

recovery of the overpayment, the individual from whom we are seeking

adjustment or recovery is immediately notified. The notice includes:

(a) The overpayment amount and how and when it occurred;

(b) A request for full, immediate refund, unless the overpayment

can be withheld from the next month's benefit;

(c) The proposed adjustment of benefits if refund is not received

within 30 days after the date of the notice and adjustment of benefits

is available;

(d) An explanation of the availability of a different rate of

withholding when full withholding is proposed, installment payments

when refund is requested and adjustment is not currently available,

and/or cross-program recovery when refund is requested and the

individual is receiving another type of payment from SSA (language

about cross-program recovery is not included in notices sent to

individuals in jurisdictions where this recovery option is not

available);

(e) An explanation of the right to request waiver of adjustment or

recovery and the automatic scheduling of a file review and pre-

recoupment hearing (commonly referred to as a personal conference) if a

request for waiver cannot be approved after initial paper review;

(f) An explanation of the right to request reconsideration of the

fact and/or amount of the overpayment determination;

(g) Instructions about the availability of forms for requesting

reconsideration and waiver;

(h) An explanation that if the individual does not request waiver

or reconsideration within 30 days of the date of the overpayment

notice, adjustment or recovery of the overpayment will begin;

(i) A statement that an SSA office will help the individual

complete and submit forms for appeal or waiver requests; and

(j) A statement that the individual receiving the notice should

notify SSA promptly if reconsideration, waiver, a lesser rate of

withholding, repayment by installments or cross-program adjustment is

wanted.

9. Section 410.561a is revised to read as follows:

Sec. 410.561a When waiver may be applied and how to process the

request.

(a) There shall be no adjustment or recovery in any case where an

overpayment under part B of title IV of the Act has been made to an

individual who is without fault if adjustment or recovery would either

defeat the purpose of title IV of the Act, or be against equity and

good conscience.

(b) If an individual requests waiver of adjustment or recovery of

an overpayment made under Part B of title IV within 30 days after

receiving a notice of overpayment that contains the information in

Sec. 410.561, no adjustment or recovery action will be taken until

after the initial waiver determination is made. If the individual

requests waiver more than 30 days after receiving the notice of

overpayment, SSA will stop any adjustment or recovery actions until

after the initial waiver determination is made.

(c) When waiver is requested, the individual gives SSA information

to support his/her contention that he/she is without fault in causing

the overpayment (see Sec. 410.561b), and that adjustment or recovery

would either defeat the purposes of this subpart (see Sec. 410.561c) or

be against equity and good conscience (see Sec. 410.561d). That

information, along with supporting documentation, is reviewed to

determine if waiver can be approved. If waiver cannot be approved after

this review, the individual is notified in writing and given the dates,

times and place of the file review and personal conference; the

procedure for reviewing the claims file prior to the personal

conference; the procedure for seeking a change in the scheduled dates,

times, and/or place; and all other information necessary to fully

inform the individual about the personal conference. The file

[[Page 56133]]

review is always scheduled at least 5 days before the personal

conference.

(d) At the file review, the individual and the individual's

representative have the right to review the claims file and applicable

law and regulations with the decisionmaker or another SSA

representative who is prepared to answer questions. We will provide

copies of material related to the overpayment and/or waiver from the

claims file or pertinent sections of the law or regulations that are

requested by the individual or the individual's representative.

(e) At the personal conference, the individual is given the

opportunity to:

(1) Appear personally, testify, cross-examine any witnesses, and

make arguments;

(2) Be represented by an attorney or other representative (see

Sec. 410.684), although the individual must be present at the

conference; and

(3) Submit documents for consideration by the decisionmaker.

(f) At the personal conference, the decisionmaker:

(1) Tells the individual that the decisionmaker was not previously

involved in the issue under review, that the waiver decision is solely

the decisionmaker's, and that the waiver decision is based only on the

evidence or information presented or reviewed at the conference;

(2) Ascertains the role and identity of everyone present;

(3) Indicates whether or not the individual reviewed the claims

file;

(4) Explains the provisions of law and regulations applicable to

the issue;

(5) Briefly summarizes the evidence already in file which will be

considered;

(6) Ascertains from the individual whether the information

presented is correct and whether he/she fully understands it;

(7) Allows the individual and the individual's representative, if

any, to present the individual's case;

(8) Secures updated financial information and verification, if

necessary;

(9) Allows each witness to present information and allows the

individual and the individual's representative to question each

witness;

(10) Ascertains whether there is any further evidence to be

presented;

(11) Reminds the individual of any evidence promised by the

individual which has not been presented;

(12) Lets the individual and the individual's representative, if

any, present any proposed summary or closing statement;

(13) Explains that a decision will be made and the individual will

be notified in writing; and

(14) Explains repayment options and further appeal rights in the

event the decision is adverse to the individual.

(g) SSA issues a written decision to the individual (and his/her

representative, if any) specifying the findings of fact and conclusions

in support of the decision to approve or deny waiver and advising of

the individual's right to appeal the decision. If waiver is denied,

adjustment or recovery of the overpayment begins even if the individual

appeals.

(h) If it appears that the waiver cannot be approved, and the

individual declines a personal conference or fails to appear for a

second scheduled personal conference, a decision regarding the waiver

will be made based on the written evidence of record. Reconsideration

is then the next step in the appeals process (but see Sec. 410.630(c)).

Subpart F--[Amended]

10. The authority citation for subpart F of part 410 is revised to

read as follows:

Authority: Secs. 413(b), 426(a), 507, and 508 of the Federal

Coal Mine Health and Safety Act of 1977, as amended (30 U.S.C.

923(b), 936(a), 956, and 957).

11. Section 410.623 is revised to read as follows:

Sec. 410.623 Reconsideration; right to reconsideration.

(a) We shall reconsider an initial determination if a written

request for reconsideration is filed, as provided in Sec. 410.624, by

or for the party to the initial determination (see Sec. 410.610). We

shall also reconsider an initial determination if a written request for

reconsideration is filed, as provided in Sec. 410.624, by an individual

as a widow, child, parent, brother, sister, or representative of a

decedent's estate, who makes a showing in writing that his or her

rights with respect to benefits may be prejudiced by such

determination.

(b) Reconsideration is the first step in the administrative review

process that we provide for an individual dissatisfied with the initial

determination, except that we provide the opportunity for a hearing

before an administrative law judge as the first step for those

situations described in Sec. 410.630(b) and (c), where an individual

appeals an initial determination denying waiver of adjustment or

recovery of an overpayment (see Sec. 410.561a).

12. Section 410.630 is revised to read as follows:

Sec. 410.630 Hearing; right to hearing.

An individual referred to in Secs. 410.632 or 410.633 who has filed

a written request for a hearing under the provisions in Sec. 410.631

has a right to a hearing if:

(a) An initial determination and reconsideration of the

determination have been made by the Social Security Administration

concerning a matter designated in Sec. 410.610;

(b) An initial determination denying waiver of adjustment of

recovery of an overpayment based on a personal conference has been made

by the Social Security Administration (see Sec. 410.561a); or

(c) An initial determination denying waiver of adjustment or

recovery of an overpayment based on a review of the written evidence of

record has been made by the Social Security Administration (see

Sec. 410.561a) and the determination was made concurrent with, or

subsequent to, our reconsideration determination regarding the

underlying overpayment but before an administrative law judge holds a

hearing.

[FR Doc. 96-27707 Filed 10-30-96; 8:45 am]

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