§ 404.507, “fault” is defined, in part, as: “Fault” as used in “without fault” (see § 404.506 and 42 CFR 405.355) applies only to the individual.
In determining whether an individual is at fault, the Administration will consider all pertinent circumstances, including his age, intelligence, education, and physical and mental condition. An individual will not be “without fault” if the Administration has evidence in its possession which shows either a lack of good faith or failure to exercise a high degree of care in determining whether circumstances which may cause deductions from his benefits should be brought to the attention of the Administration by an immediate report or by return of a benefit check.
So, in order to have Social Security not collect an overpayment you have to be withouth “fault” for the overpayment the recovery would either defeat the purpose of the Social Security Act or be against equit and good conscience. If you are at fault, it may not matter if Social Security is also at fault. If you knew, or should have known that you were not entitled to receive Social Security benefits, you may have a hard time proving that you were not at fault. If you are meeting with Social Security and you honestly provide all necessary information and Social Security mistakenly sends you a check, unless you actually you are not entitled to it, I believe you should be able to rely on a Social Security technician, whose job it is to know the regulations, telling you that your benefits will continue without you being “at fault” for accepting those the benefits. How does Social Security determine if you are at fault?
Although the Administration may have been at fault in making the overpayment, that fact does not relieve the overpaid individual or any other individual from whom the Administration seeks to recover the overpayment from liability for repayment if such individual is not without fault. It says that it does not matter that Social Security may have given you bad advice, that you met with them and showed them your paystubs and they still sent you a check.
If you decide to fight an overpayment, you need to know what you are up against. After the widow and her daughter received payments for almost a year, the deceased worker was found to be not insured and all payments to the widow and child were incorrect.
Here is what the law says about how Social Security evaluates whether you have to pay back an overpayment or not. The widow has no other funds with which to pay the daughter’s private school expenses.
Against equity and good conscience is defined at 20 C. In reaching such a determination, the individual’s financial circumstances are irrelevant. A widow, having been awarded benefits for herself and daughter, entered her daughter in private school because the monthly benefits made this possible.
§ 404(b) The regulations state in part: Sections 204(b) and 1870(c) of the Act provide that there shall be no adjustment or recovery in any case where an incorrect payment . There is still the second prong, where repayment “would be against equity and good conscience.” However, this requires a “reliance to one’s detriment.” You may want to jump to examples which describe what this means in plain english. § 404.509 (1985): “Against equity and good conscience” means that adjustment or recovery of an incorrect payment (under title II of title XVIII) will be considered inequitable if an individual, because of a notice that such payment would be made or by reason of the incorrect payment, relinquished a valuable right (examples (1) and (4)) or changed his or her position for the worse (examples (2) and (3)).
Lets say you are “without fault.” then you still have to prove that the adjustment or recovery (repayment) would either 1) defeat the purpose of title II of the Act, 2) Be against equity and good conscience. Adjustment or recovery will defeat the purposes of title II in (but is not limited to) situations where the person from whom recovery is sought needs substantially all of his current income (including social security monthly benefits) to meet current ordinary and necessary living expenses. So to review, if you need all of your current income (including SSA benefits) for ordinary and necessary living expenses, the repayment may be “defeat the purpose of the act.” Please note that Social Security does not list cell phone, cable, internet, eating out or going to movies as “ordinary and necessary living expenses.” If you are spending money on any of these, you probably have income beyond just “ordindary and necessary living expense” and the repayment may not “defeat the purpsose of the act.” But, if you meet this standard AND you are without fault for the overpayment, you may be able to win an overpayment case.
I can understand not being “without fault” if you fail to provide information or if you provide false or incorrect information, but the “knew or should have known” section in practice seems to expect people know the Social Security system better than the Social Security technicians themselves. (b) When adjustment or recovery will defeat the purpose of title II.
An individual will not be without fault where, after having been exonerated for a “deduction overpayment” and after having been advised of the correct interpretation of the deduction provision, he incurs another “deduction overpayment” under the same circumstances as the first overpayment. The Secretary has promulgated regulations which interpret the meaning of the statutory phrases: “defeat the purpose of” and “against equity and good conscience.” Defeating the purpose of Title II is defined at 20 C. An individual’s ordinary and necessary expenses include: (1) Fixed living expenses, such as food and clothing, rent, mortgage payments, utilities, maintenance, insurance (e.g., life, accident, and health insurance including premiums for supplementary medical insurance benefits under the XVIII), taxes, installment payments, etc.; (2) Medical, hospitalization, and other similar expenses; (3) Expenses for the support of others for whom the individual is legally responsible; and (4) Other miscellaneous expenses which may reasonably be considered as part of the individual’s standard of living.
with respect to an individual: (a) Who is without fault, and (b) Adjustment or recovery would either: (1) Defeat the purpose of title II of the Act, or (2) Be against equity and good conscience. In a deduction-overpayment case such as this, the regulations provide an even higher degree of care for an individual to be “without fault.” 20 C. Accordingly, variances in the personal circumstances and situations of individual payees are to be considered in determining whether the necessary degree of care has been exercised by an individual to warrant a finding that he was without fault in accepting a “deduction overpayment.” (b) Subsequent deduction-overpayments. Social Security Ruling 87-16c deals with the “defeat the purpose” portion. This depends upon whether the person has an income or financial resources sufficient for more than ordinary and necessary needs, or is dependent upon all of his current benefits for such needs.