[Federal Register Volume 62, Number 234 (Friday, December 5, 1997)]
[Rules and Regulations]
[Pages 64274-64279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32008]
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SOCIAL SECURITY ADMINISTRATION
20 CFR Parts 404 and 422
RIN 0960-AE09
Federal Old-Age, Survivors, and Disability Insurance; Disclosure
of Information to Consumer Reporting Agencies and Overpayment Recovery
Through Administrative Offset Against Federal Payments
AGENCY: Social Security Administration.
ACTION: Final rule.
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SUMMARY: In this final rule, we are making several revisions to our
regulations dealing with debt collection. First, we are modifying the
regulations dealing with the recovery of benefit overpayments under
title II of the Social Security Act (the Act) to reflect statutory
authority for the Social Security Administration (SSA) to selectively
refer information to consumer reporting agencies and to recover title
II overpayments through administrative offset by the Department of the
Treasury against other Federal payments to which the overpaid
individual may be entitled. These collection practices are limited to
overpayments made to a person after he or she attained age 18 that are
determined to be otherwise unrecoverable under section 204 of the Act
after the individual ceases to be a beneficiary under title II of the
Act. Second, as an independent agency in the executive branch of the
U.S. Government, we are establishing a new subpart D in part 422 of
title 20 of the Code of Federal Regulations which explains our rules on
debt collection procedures for both administrative debts and for title
II program overpayments determined to be otherwise unrecoverable under
section 204 of the Act. These rules for the new subpart D address the
reporting of delinquent debts to consumer and other credit reporting
agencies and the use of administrative offset through the Department of
the Treasury. Third, we are revising our rules on the recovery of title
II program overpayments through the use of the Federal income tax
refund offset (TRO) provisions to reflect that, beginning January 1,
1998, the Department of the Treasury, rather than the Internal Revenue
Service (IRS), will administer the TRO program, and to reflect other
changes in policies and procedures applied by the IRS and the
Department of the Treasury in the TRO program.
EFFECTIVE DATE: This final rule is effective January 5, 1998.
FOR FURTHER INFORMATION CONTACT: Robert J. Augustine, Legal Assistant,
Division of Regulations and Rulings, Social Security Administration,
6401 Security Boulevard, Baltimore, MD 21235, (410) 966-5121. For
information on eligibility or claiming benefits, call our national
toll-free number, 1-800-772-1213.
SUPPLEMENTARY INFORMATION: Section 204 of the Act prescribes the
methods SSA may use to recover Social Security benefits erroneously
paid under title II of the Act (title II program overpayments), as
distinguished from the methods SSA may use to collect other debts owed
the agency (administrative debts) that are recoverable under other
statutory authority. Until recently, SSA was authorized to recover
title II program overpayments only through adjustment of future
benefits payable to the overpaid individual or to others on the
earnings record on which the overpayment was made, by direct recovery
from the overpaid person (or the overpaid person's estate, if
deceased), or by offset against Federal income tax refunds due from the
Department of the Treasury. Amendments to section 204 of the Act by
section 5 of Pub. L. 103-387 (1994) and section 31001(z)(2) of Pub. L.
104-134 (1996) permit SSA to use several debt collection procedures
that have been available to Federal agencies (including SSA) by statute
since 1982, but that SSA had been precluded from using to recover title
II program overpayments. Among other things, these procedures include
reporting delinquent debts to consumer and other credit reporting
agencies and recovering debts by administrative offset against other
Federal payments to which the debtor is entitled. Under section 204(f)
of the Act (42 U.S.C. 404(f)), these additional debt collection
procedures may be used to recover title II program overpayments only if
the overpayment was made to a person after he or she attained age 18
and the overpayment has been determined to be otherwise unrecoverable
under section 204 of the Act after the overpaid person is no longer
entitled to benefits under title II of the Act.
Before we can refer information to consumer or other credit
reporting agencies or refer a debt to the Department of the Treasury
for administrative offset (either title II program overpayments or
administrative debts), we must (1) send the debtor written notice (or,
in the case of an individual for whom we do not have a current address,
take reasonable action to locate and send written notice) describing
the amount and nature of the debt, the action that we propose to take,
and the debtor's rights to an explanation of the debt, to request us to
review the debt, to dispute the accuracy of the information about the
debt, and to inspect or copy our records about the debt; and (2) give
the debtor at least 60
[[Page 64275]]
calendar days to present evidence that all or part of the debt is not
past-due or not legally enforceable, or enter into a written agreement
to pay the debt.
Prior to March 31, 1995, SSA was an operating division of the
Department of Health and Human Services (DHHS). SSA relied on the DHHS
rules at 45 CFR part 30 for debt collection (other than collection of
title II program overpayments). The Social Security Independence and
Program Improvements Act of 1994 (SSIPIA), Pub. L. 103-296, established
SSA as an independent agency in the executive branch of the Federal
government effective March 31, 1995, and vested general regulatory
authority in the Commissioner of Social Security (the Commissioner).
Under section 106(b) of the SSIPIA, DHHS regulations in effect
immediately before March 31, 1995, which relate to functions now vested
in the Commissioner by reason of SSA's independence, continue to apply
to SSA until such time as they are modified, suspended, terminated, or
repealed by the Commissioner. In this final rule, we are establishing a
new subpart D in part 422 of our regulations which sets forth the SSA
rules on debt collection for title II program overpayments that have
been determined to be otherwise unrecoverable under section 204 of the
Act and for administrative debts. At this time, we are setting forth in
subpart D our rules on referral to consumer and other credit reporting
agencies and referral to the Department of the Treasury for
administrative offset. In the future, as we make the necessary systems
changes and develop policies and procedures to enable us to use
additional debt collection tools for recovery of title II program
overpayments, we will modify subpart D of part 422. In the meantime, we
will continue to rely on the definitions and additional collection
methods contained in the DHHS regulations in 45 CFR part 30 to recover
administrative debts owed the Federal government.
We are also revising our rules on the recovery of title II program
overpayments through the withholding of amounts due to former
beneficiaries as Federal income tax refunds to reflect the fact that,
beginning January 1, 1998, the TRO program will be administered by the
Department of the Treasury, Financial Management Service (FMS), instead
of the IRS. The policy requiring agencies to delay referral of debts
for TRO for three months after the right to collect first accrued has
been rescinded. Also, the TRO program, as administered by FMS, will be
ongoing rather than cyclical so that it will no longer be necessary for
agencies to recertify amounts of a particular debt for collection by
TRO each year. Instead, if the entire debt is not recovered in a given
year, the case will remain with FMS for collection of the remainder by
offset in succeeding years.
Public Comments
On August 7, 1997, we published proposed rules in the Federal
Register at 62 FR 42439 and provided a 60-day period for interested
individuals to comment. We received a total of three letters on the
proposed rules: one from a private attorney, one from a disability law
center, and one from a member of Congress. After carefully considering
the comments received, we have decided to adopt the proposed rules with
only a few clarifying changes. The comments and our responses to them
are summarized below.
Comment: Two commenters objected to the proposed rules based on the
assumption that the debtors subject to these rules have no input into
the calculation of their debts and are without adequate protections.
Response: The debtors who will be selected for the new debt
collection techniques are those from whom SSA has attempted numerous
times to collect the debts, both by written notices and personal
contacts. In the initial overpayment notice, SSA advises the debtor of
the right to request reconsideration of the fact and amount of the
debt, and thereby challenge the calculation and existence of the debt.
In this same notice, SSA also advises the debtor about the right to
request waiver. In addition, SSA's separate notice to the debtor of the
Agency's intent to refer information about the debt to the Department
of the Treasury and to the consumer reporting agencies offers the
debtor the opportunity to request waiver, present evidence showing that
the debt is not past-due and/or legally enforceable, and dispute the
accuracy of information about the debt that we would refer. We believe
that our procedures adequately protect individuals by allowing ample
opportunity to the debtors to both dispute the amount of the
overpayment and/or to request waiver.
Comment: One commenter asked the Agency not to issue final
regulations until it: (1) runs a test program to assure that
overpayments preventable by SSA are not occurring; (2) tests a program
of appointing free advocates (who may be SSA employees) to counsel and
represent those accused of receiving overpayments; and (3) assures that
people accused of using overpayments understand that a report is made
to a consumer reporting agency immediately unless they appeal or reach
agreement with SSA.
Response: We are not adopting this comment. With regard to the
commenter's first concern above, SSA has had a longstanding and
comprehensive quality assurance program that reviews overpayments,
including those preventable by SSA. The program studies significant
samples of claims, identifying problem areas that need to be corrected.
We believe this quality assurance program corresponds to the test
program suggested by the commenter.
With regard to the commenter's second point, SSA already takes
several steps toward helping overpaid individuals obtain
representation. Information on the individual's right to seek and use
representation is included in SSA's initial overpayment notices. In
addition, SSA offers to provide information on advocacy groups that do
not charge people who qualify for their services.
Regarding the commenter's third point, SSA will not report
information to consumer reporting agencies immediately. SSA will wait
at least 60 days after the date of the notice to report the delinquency
to consumer reporting agencies. During the 60-day due process period,
SSA provides the debtor with the opportunity to request review of the
debt, dispute the accuracy of the information to be reported, request
waiver, or enter into an installment agreement. All of these rights are
clearly explained in the notice to the debtor.
Comment: One commenter objected to the practice of sending one pre-
offset notice to the debtor explaining that the debt is being referred
to the Department of the Treasury for TRO and that future tax refunds
will be offset to recover the overpayment. The commenter believes that
we should provide separate notices before subsequent offsets.
Response: This practice is consistent with the Department of the
Treasury's existing process whereby no additional notice is necessary
if there are multiple offsets in one year to recover an overpayment
debt. It is also consistent with the Department of the Treasury's
regulations and operating procedures which require notice at least 60
calendar days before the date of referral to the Department of the
Treasury.
Comment: SSA's notices described in Sec. 404.521 of the proposed
rules should contain language explaining that the debtor may enter into
a repayment agreement with SSA.
Response: Since the beginning of the TRO program, SSA's notices
have contained such language. The notices issued under these final
regulations also
[[Page 64276]]
contain the language which offers the opportunity to pay the debt by
installments. One of the principles that SSA uses in the offset program
is to extend to the debtor as many opportunities as possible to pay the
debt voluntarily, rather than by offset. As long as the debtor repays
by regular installments in accordance with his or her payment agreement
with SSA, offset will not be used to collect the debt.
Comment: No referral to the Department of the Treasury should occur
until all administrative reviews have been completed or until a
decision of the Agency becomes final, in the event that no appeal is
taken. In addition, recovery efforts by the SSA and the Department of
the Treasury should be stopped until a waiver request received after
referral to the Department of the Treasury has been given full
consideration.
Response: When an individual submits a timely request for
reconsideration of the initial overpayment decision and/or requests
waiver of collection of the overpayment, SSA is precluded from any
recovery action until SSA renders a decision affirming the initial
determination and/or denying the waiver request. See Califano v.
Yamasaki, 442 U.S. 682 (1979) and Sec. 404.506. SSA is not required to
refrain from taking collection action concerning a title II overpayment
debt after a decision on a request for reconsideration of the initial
overpayment determination is issued and after a determination on a
request for waiver of recovery of the overpayment is made after the
debtor had the opportunity for a prerecoupment personal conference.
However, under the process adopted to implement these final regulations
SSA would not select a title II overpayment debt for referral to the
Department of the Treasury while an administrative appeal regarding
that debt is pending.
Section 204(f) of the Act, as amended, authorizes SSA to collect
such debts through administrative offset by the Department of the
Treasury against Federal payments due the debtor when, among other
things, SSA determines, under regulations, that such debts are
otherwise unrecoverable under section 204 of the Act. In accordance
with Sec. 404.527(b) of these final regulations, SSA would not select a
debt as ``unrecoverable'' until a reconsideration determination
requested on the initial determination of overpayment, or an initial
determination (after opportunity for a personal conference) on a
request for waiver of collection, is issued and either the billing
system sequence is completed or further collection action is suspended
or terminated. The billing system sequence on a title II overpayment
debt would not be completed, and collection action on such a debt would
not be suspended or terminated, while an administrative appeal at any
level of adjudication is pending on the matter. Thus, under these final
regulations SSA would not select a title II overpayment debt for
collection by the Department of the Treasury through offset against
other Federal payments while an administrative appeal is pending at any
level of adjudication on the fact or amount of the overpayment or on
waiver.
Similarly, the changes in these regulations will not affect any
former beneficiary's ability to request waiver. If the debtor requests
waiver after a case has been referred, SSA will instruct the Department
of the Treasury to cease collection efforts until the waiver request is
adjudicated.
Comment: SSA should raise its monetary threshold for referral to
the Department of the Treasury from $25 to $500.
Response: The $25 debt threshold is consistent with the regulations
issued by Treasury and is used governmentwide. SSA has also determined
it to be cost-effective. SSA will continue to use the $25 threshold in
applying these rules.
Comment: The notice SSA will send to debtors informing them that
the Agency intends to report their debts to consumer reporting agencies
should include the right to request waiver of the overpayment.
Response: Unlike 31 U.S.C. 3720A(f) pertaining to the TRO notice to
debtors, the statute (31 U.S.C. 3711(e)(1)(C)) pertaining to the notice
to debtors about referral to consumer reporting agencies does not
require an explanation of waiver. However, SSA notifies debtors about
TRO, offset of other Federal payments and referral to consumer
reporting agencies concurrently, and these notices explain the debtors'
waiver rights. If the debtor requests waiver within the 60-calendar-day
period allowed by the notice, SSA will not report the debt to the
credit bureaus until the waiver request has been adjudicated.
Explanation of Changes to Regulations
We are revising our title II rules on TRO at Secs. 404.520-404.526
to reflect several changes in the TRO process promulgated by the
Department of the Treasury. Beginning January 1, 1998, we will be
referring title II program overpayments for TRO to the Department of
the Treasury, rather than to IRS. Section 404.520 is revised to delete
the requirement that a debt may not be referred for TRO before the
expiration of three months after our right to collect first accrued.
Section 404.526 is also revised by deleting reference to the need to
recertify an overpayment for TRO in cases where a tax refund is
insufficient to recover the entire amount of an overpayment in a given
year, reflecting the fact that the case will now remain with the
Department of the Treasury for offset in succeeding years without need
for recertification. In this final rule, we have inserted at the end of
Sec. 404.520(a) a reference to the current regulation of the Department
of the Treasury (31 CFR 285.2) which supersedes the IRS regulation (26
CFR 301.6402-6) that was cited in the notice of proposed rulemaking.
We are adding a new Sec. 404.527 to our regulations to explain that
we will use the additional debt collection methods authorized by
section 204(f) of the Act to recover title II program overpayments if
the overpayment occurred after the individual attained age 18, and the
overpayment has been determined to be otherwise unrecoverable under
section 204 of the Act after the individual is no longer entitled to
benefits under title II of the Act. Section 404.527 also contains the
criteria under which we determine that an overpayment is ``otherwise
unrecoverable under section 204 of the Act.'' An overpayment debt will
be determined to be unrecoverable when all of the following conditions
are met: we completed our billing sequence or collection activity has
been suspended or terminated in accordance with the Federal Claims
Collection Standards in 4 CFR 104.2 and 104.3; there is no installment
payment agreement or the overpaid person has failed to pay in
accordance with such an agreement for two consecutive months; the
overpaid individual has not requested waiver or, after appropriate
review of such a request, we have determined that we will not waive
collection of the overpayment; the overpaid person has not requested
reconsideration of the initial overpayment determination or, after our
review of such determination, we have affirmed such determination
wholly or partially; we cannot collect the overpayment by adjusting
benefits payable to individuals other than the overpaid person. For
purposes of Sec. 404.527, an overpayment will be deemed to be
unrecoverable from an individual who lived in a separate household from
the overpaid person when the overpayment occurred and who did not
receive the overpayment.
[[Page 64277]]
Adjustment of benefits is waived when waiver is requested under these
circumstances. See Sec. 404.509.
We are adding to Sec. 404.903 new paragraphs (t) and (u) to include
in the list of administrative actions that are not initial
determinations our determinations whether we will refer information
about an overpayment debt to consumer reporting agencies and whether we
will refer the debt to the Department of the Treasury for offset
against other Federal payments due the overpaid person. Administrative
actions that are not initial determinations may be reviewed by us, but
they are not subject to the administrative review process provided by
subpart J of our regulations at 20 CFR Part 404, and they are not
subject to judicial review.
We are also creating a new subpart D to part 422 of our regulations
to contain our rules on certain debt collection practices and
procedures. In Sec. 422.301, we specify that the debt collection tools
in subpart D may be used to recover both title II program overpayments
the Commissioner has determined to be unrecoverable under section 204
of the Act and overdue administrative debts owed the agency.
In Sec. 422.305, we explain that we will refer all overdue title II
program debts over $25, found to be otherwise unrecoverable under
section 204 of the Act, to consumer reporting agencies. We describe the
information we must include in the notice we send to the debtor before
we report the debt to a consumer reporting agency. We also explain in
this section that, in cases where an individual disputes the
information we propose to refer to a consumer reporting agency within
60 calendar days of our notice of our proposed referral, we will not
send the information until we determine the correct information.
In Sec. 422.306, we explain that we will refer all overdue
administrative debts over $25 to credit reporting agencies. We also
describe the information we must include in the notice we send to the
debtor before we report the debt to a credit reporting agency. Examples
of administrative debts are overpayments of employees' pay and
allowances, debts for civil money penalties imposed under section
1140(b) of the Act, debts for unpaid fees for reimbursable services by
SSA (e.g., disclosure of information), contractor debts, etc.
In Sec. 422.310, we explain our rules relating to referring debts
to the Department of the Treasury for administrative offset.
Specifically, we explain that we will refer overdue debts over $25 to
the Department of the Treasury for offset against any Federal payments
due the debtor. We also describe the information we must include in the
notice we send to the debtor before referring the debt to the
Department of the Treasury for administrative offset.
In this final rule, we are revising the language of
Secs. 422.305(b)(2), 422.306(b)(2) and 422.310(c)(2) as it appeared in
the proposed rules to clearly state that we will not refer information
on debts to consumer reporting agencies or to the Department of the
Treasury for administrative offset before the expiration of 60 calendar
days from the dates of the notices described in those regulations.
In Sec. 422.315, we explain that a debtor has the right to inspect
or copy our records related to a debt before we refer the debt to a
consumer or credit reporting agency or to the Department of the
Treasury for administrative offset, and the procedures for exercising
that right.
In Sec. 422.317, we explain that a debtor has the right to have us
review the debt. To exercise this right, the debtor must notify us
within 60 calendar days from the date of our notice of proposed
referral and give us evidence that he or she does not owe all or part
of the debt, or we do not have the right to collect it. After our
review of the evidence, we explain that we will issue written findings
of our review. If the debtor requests review and submits evidence
within the 60-day period, we will not refer the debt to consumer or
credit reporting agencies or to the Department of the Treasury unless
and until we have completed our review and sent our findings to the
debtor that all or part of the debt is overdue and legally enforceable.
Regulatory Procedures
Executive Order 12866
We have consulted with the Office of Management and Budget (OMB)
and determined that these proposed rules do not meet the criteria for a
significant regulatory action under Executive Order 12866. Thus, they
were not subject to OMB review.
Regulatory Flexibility Act
We certify that these proposed regulations will not have a
significant impact on a substantial number of small entities.
Therefore, a regulatory flexibility analysis, as provided in the
Regulatory Flexibility Act, as amended, is not required.
Paperwork Reduction Act
These proposed regulations will impose no new reporting or
recordkeeping requirements requiring OMB clearance.
(Catalog of Federal Domestic Assistance Programs No. 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)
List of Subjects
20 CFR Part 404
Administrative practice and procedure, Death benefits, Blind,
Disability benefits, Old-Age, Survivors and Disability Insurance,
Reporting and recordkeeping requirements, Social Security.
20 CFR Part 422
Administrative practice and procedure, Organization and functions
(Government agencies), Social Security.
Dated: December 2, 1997.
Kenneth S. Apfel,
Commissioner of Social Security.
For the reasons set out in the preamble, subparts F and J of Part
404 of Chapter III of Title 20 of the Code of Federal Regulations are
amended and a new subpart D is added to Part 422 of Chapter III of
Title 20 of the Code of Federal Regulations as follows:
PART 404--[AMENDED]
1. The authority citation for subpart F of Part 404 is revised to
read as follows:
Authority: Secs. 204, 205(a), and 702(a)(5) of the Social
Security Act (42 U.S.C. 404, 405(a), and 902(a)); 31 U.S.C. 3720A.
2. Section 404.520 is revised to read as follows:
Sec. 404.520 Referral of overpayments to the Department of the
Treasury for tax refund offset--General.
(a) The standards we will apply and the procedures we will follow
before requesting the Department of the Treasury to offset income tax
refunds due taxpayers who have an outstanding overpayment are set forth
in Secs. 404.520 through 404.526. These standards and procedures are
authorized by 31 U.S.C. 3720A and are implemented through Department of
the Treasury regulations at 31 CFR 285.2.
(b) We will use the Department of the Treasury tax refund offset
procedure to collect overpayments that are certain in amount, past due
and legally enforceable, and eligible for tax refund offset under
regulations issued by the Department of the Treasury. We will use these
procedures to collect overpayments only from individuals who are not
currently entitled to
[[Page 64278]]
monthly Social Security benefits under title II of the Act. We will
refer an overpayment to the Department of the Treasury for offset
against tax refunds no later than 10 years after our right to collect
the overpayment first accrued.
3. Section 404.521 is amended by revising the introductory text to
read as follows:
Sec. 404.521 Notice to overpaid individual.
A request for reduction of a Federal income tax refund will be made
only after we determine that an amount is owed and past due and send
the overpaid individual written notice. Our notice of intent to collect
an overpayment through tax refund offset will state:
* * * * *
4. Section 404.526 is revised to read as follows:
Sec. 404.526 Tax refund insufficient to cover amount of overpayment.
If a tax refund for a given taxable year is insufficient to recover
an overpayment completely, the case will remain with the Department of
the Treasury for offset, assuming that all criteria for offset continue
to be met.
5. Section 404.527 is added to subpart F to read as follows:
Sec. 404.527 Additional methods for recovery of title II benefit
overpayments.
(a) General. In addition to the methods specified in Secs. 404.502
and 404.520, an overpayment under title II of the Act is also subject
to recovery under the rules in subpart D of part 422, provided:
(1) The overpayment occurred after the individual has attained age
18;
(2) The overpaid individual is no longer entitled to benefits under
title II of the Act; and
(3) Pursuant to paragraph (b) of this section, we have determined
that the overpayment is otherwise unrecoverable under section 204 of
the Act.
(b) When an overpayment is considered to be otherwise
unrecoverable. An overpayment under title II of the Act is considered
to be otherwise unrecoverable under section 204 of the Act if all of
the following conditions are met:
(1) Our billing system sequence has been completed (i.e., we have
sent the individual an initial notice of the overpayment, a reminder
notice, and a past-due notice) or collection activity has been
suspended or terminated in accordance with the Federal Claims
Collection Standards in 4 CFR 104.2 or 104.3.
(2) We have not entered into an installment payment arrangement
with the overpaid individual or, if we have entered into such an
arrangement, the overpaid individual has failed to make any payment for
two consecutive months.
(3) The overpaid individual has not requested waiver pursuant to
Sec. 404.506 or Sec. 404.522 or, after a review conducted pursuant to
those sections, we have determined that we will not waive collection of
the overpayment.
(4) The overpaid individual has not requested reconsideration of
the initial overpayment determination pursuant to Secs. 404.907 and
404.909 or, after a review conducted pursuant to Sec. 404.913, we have
affirmed, in whole or in part, the initial overpayment determination.
(5) The overpayment cannot be recovered pursuant to Sec. 404.502 by
adjustment of benefits payable to any individual other than the
overpaid individual. For purposes of this paragraph, an overpayment
will be deemed to be unrecoverable from any individual who was living
in a separate household from the overpaid person at the time of the
overpayment and did not receive the overpayment.
6. In addition to the amendments set forth above, remove the
acronym ``IRS'' and add, in its place, the words ``Department of the
Treasury'' in the following places:
(a) Section 404.521(b);
(b) Section 404.522(b);
(c) Section 404.523 (a) and (c) (both places); and
(d) Section 404.525.
7. The authority citation for subpart J of Part 404 is revised to
read as follows:
Authority: Secs. 201(j), 204(f), 205(a), (b), (d)-(h), and (j),
221, 225, and 702(a)(5) of the Social Security Act (42 U.S.C.
401(j), 404(f), 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).
8. Section 404.903 is amended by deleting the word ``and'' at the
end of paragraph (r), replacing the period at the end of paragraph (s)
with a semicolon, and adding paragraphs (t) and (u) to read as follows:
Sec. 404.903 Administrative actions that are not initial
determinations.
* * * * *
(t) Determining whether we will refer information about your
overpayment to a consumer reporting agency (see Secs. 404.527 and
422.305 of this chapter); and
(u) Determining whether we will refer your overpayment to the
Department of the Treasury for collection by offset against Federal
payments due you (see Secs. 404.527 and 422.310 of this chapter).
PART 422--ORGANIZATION AND PROCEDURES
10. Subpart D is added to read as follows:
Subpart D--Claims Collection
Sec.
422.301 Material included in this subpart.
422.305 Report of overdue title II program overpayment debts to
consumer reporting agencies.
422.306 Report of overdue administrative debts to credit reporting
agencies.
422.310 Collection of overdue debts by administrative offset.
422.315 Review of our records related to the debt.
422.317 Review of the debt.
Subpart D--Claims Collection
Authority: Secs. 204(f), 205(a), and 702(a)(5) of the Social
Security Act (42 U.S.C. 404(f), 405(a), and 902(a)(5)); 31 U.S.C.
3711(e); 31 U.S.C. 3716.
Sec. 422.301 Material included in this subpart.
This subpart describes the procedures relating to collection of:
(a) Overdue administrative debts, and
(b) Overdue title II program overpayments described in Sec. 404.527
of this chapter.
Sec. 422.305 Report of overdue title II program overpayment debts to
consumer reporting agencies.
(a) Debts we will report. We will report to consumer reporting
agencies all overdue title II program overpayment debts over $25.
(b) Notice to debtor. Before we report any such debt to a consumer
reporting agency, we will send the debtor written notice of the
following:
(1) We have determined that payment of the debt is overdue;
(2) We will refer the debt to a consumer reporting agency at the
expiration of not less than 60 calendar days after the date of the
notice unless, within that 60-day period, the debtor pays the full
amount of the debt or takes either of the actions described in
paragraphs (b)(6) or (b)(7) of this section;
(3) The specific information we will provide to the consumer
reporting agency, including information that identifies the debtor
(e.g., name, address, and social security number) and the amount,
status, and history of the debt;
(4) The debtor has the right to a complete explanation of the debt;
(5) The debtor may dispute the accuracy of the information to be
provided to the consumer reporting agency;
(6) The debtor may request a review of the debt by giving us
evidence
[[Page 64279]]
showing that he or she does not owe all or part of the amount of the
debt or that we do not have the right to collect it; and
(7) The debtor may request an installment payment plan.
(c) Disputing the information that we would send to consumer
reporting agencies. If a debtor believes that the information we
propose to send to consumer reporting agencies is incorrect, the debtor
may ask us to correct such information. If, within 60 calendar days
from the date of our notice described in paragraph (b) of this section,
the debtor notifies us that any information to be sent to consumer
reporting agencies is incorrect, we will not send the information to
consumer reporting agencies until we determine the correct information.
Sec. 422.306 Report of overdue administrative debts to credit
reporting agencies.
(a) Debts we will report. We will report to credit reporting
agencies all overdue administrative debts over $25. Some examples of
administrative debts are as follows: overpayments of pay and allowances
paid to employees, debts for civil monetary penalties imposed under
section 1140(b) of the Act, debts for unpaid fees for reimbursable
services performed by SSA (e.g., disclosures of information), and
contractor debts.
(b) Notice to debtor. Before we report any administrative debt to a
credit reporting agency, we will send the debtor written notice of the
following:
(1) We have determined that payment of the debt is overdue;
(2) We will refer the debt to a credit reporting agency at the
expiration of not less than 60 calendar days after the date of the
notice unless, within that 60-day period, the debtor pays the full
amount of the debt or takes either of the actions described in
paragraphs (b)(6) or (b)(7) of this section;
(3) The specific information we will provide to the credit
reporting agency, including information that identifies the debtor
(e.g., name, address, social security number, and employer
identification number) and the amount, status, and history of the debt;
(4) The debtor has the right to a complete explanation of the debt;
(5) The debtor may dispute the accuracy of the information to be
provided to the credit reporting agency;
(6) The debtor may request a review of the debt by giving us
evidence showing that he or she does not owe all or part of the amount
of the debt or that we do not have the right to collect it; and
(7) The debtor may request an installment payment plan.
Sec. 422.310 Collection of overdue debts by administrative offset.
(a) Referral to the Department of the Treasury for offset. We will
recover overdue debts by offsetting Federal payments due the debtor
through the Treasury Offset Program (TOP). TOP is a Governmentwide
delinquent debt matching and payment offset process operated by the
Department of the Treasury, whereby debts owed to the Federal
Government are collected by offsetting them against Federal payments
owed the debtor.
(b) Debts we will refer. We will refer for administrative offset
all overdue debts over $25.
(c) Notice to debtor. Before we refer any debt for collection by
administrative offset, we will send the debtor written notice that:
(1) We have determined that payment of the debt is overdue;
(2) We will refer the debt for administrative offset at the
expiration of not less than 60 calendar days after the date of the
notice unless, within that 60-day period, the debtor pays the full
amount of the debt or takes either of the actions described in
paragraphs (c)(4) or (c)(5) of this section;
(3) The debtor may inspect or copy our records relating to the
debt;
(4) The debtor may request a review of the debt by giving us
evidence showing that the debtor does not owe all or part of the amount
of the debt or that we do not have the right to collect it; and
(5) The debtor may request an installment payment plan.
Sec. 422.315 Review of our records related to the debt.
(a) Notification by the debtor. The debtor may request to inspect
or copy our records related to the debt.
(b) Our response. In response to a request from the debtor
described in paragraph (a) of this section, we will notify the debtor
of the location and time at which the debtor may inspect or copy our
records related to the debt. We may also, at our discretion, mail to
the debtor copies of the records relating to the debt.
Sec. 422.317 Review of the debt.
(a) Notification and presentation of evidence by the debtor. A
debtor who receives a notice described in Sec. 422.305(b),
Sec. 422.306(b), or Sec. 422.310(c) has a right to have us review the
debt. To exercise this right, within 60 calendar days from the date of
our notice, the debtor must notify us and give us evidence that he or
she does not owe all or part of the debt or that we do not have the
right to collect it. If the debtor does not notify us and give us this
evidence within the 60 calendar-day period, we may take the action
described in our notice.
(b) Review of the evidence. If the debtor notifies us and presents
evidence within the 60 calendar-day period described in paragraph (a)
of this section, we will not take the action described in our notice
unless and until we consider all of the evidence and send the debtor
our findings that all or part of the debt is overdue and legally
enforceable.
(c) Findings by SSA. Following our review of all of the evidence
presented, we will issue written findings, including the supporting
rationale for the findings. Issuance of these findings will be the
final Agency action on the debtor's request for review. If we find that
the debt is not overdue or we do not have the right to collect it, we
will not send information about the debt to consumer or other credit
reporting agencies or refer the debt to the Department of the Treasury
for administrative offset.
[FR Doc. 97-32008 Filed 12-4-97; 8:45 am]
BILLING CODE 4190-29-P
