SSR 82-69: TITLE XVI: EXCESS PAYMENT AS A PREREQUISITE FOR THE IMPOSITION OF A PENALTY DEDUCTION UNDER SECTION 1631(e)(2)

PURPOSE: To make explicit the policy of the Social Security Administration (SSA) regarding the conditions under which a penalty deduction will be imposed against a recipient of the Supplemental Security Income (SSI) payments.

CITATIONS: Section 1631(e)(2) of the Social Security Act; Regulations No. 16 sections 416.722-416.732.

PERTINENT HISTORY: Section 1631(e)(2) provides that a penalty will be imposed whenever a recipient of SSI payments fails to submit, or delays in submitting, a required report of events and changes in circumstances which affect eligibility for or amount of benefits under title XVI. Regulations No. 16, section 416.722(a) through (d), states that a penalty deduction will be imposed if the recipient fails to make a required report on time without good cause, and SSA must reduce, suspend, or terminate benefits because of the event not reported, and the recipient received and accepted an SSI benefit for the penalty period.

When a recipient fails to report, or delays in reporting, an event or change in circumstances which could cause a reduction, suspension, or termination of his/her SSI payments, SSA continued to pay the incorrect benefits until the Agency becomes aware of the event or change, and receives sufficient information to determine continued eligibility or payment amount.

This improper continuation of payments creates an excess payment to the delinquent recipient. An excess payment is the amount of money paid in excess of the amount the recipient was actually eligible to receive during the period in question. An excess payment must occur before a penalty deduction can be imposed; it is, as such, a necessary condition for the imposition of a penalty.

It should be noted that SSA's operating guidelines have interpreted the penalty provisions of the Act and the regulations in this manner since the enactment of those provisions.

POLICY STATEMENT: In the absence of a finding of without fault or good cause, SSA will impose a penalty deduction against a recipient who fails or delays in reporting an event which would cause a reduction, suspension, or termination of SSI benefits when that failure or delay causes the Agency to make an excess payment to the recipient responsible for making the delinquent report.

CROSS-REFERENCES: Program Operations Manual System Part 05, Chapter 023, Subchapter 01 (SI 02301.500-SI 02301.525).

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