US Laws, Codes, Statutes & Cases

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[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 42USC404]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 7--SOCIAL SECURITY
 
  SUBCHAPTER II--FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE 
                                BENEFITS
 
Sec. 404. Overpayments and underpayments


(a) Procedure for adjustment or recovery

    (1) Whenever the Commissioner of Social Security finds that more or 
less than the correct amount of payment has been made to any person 
under this subchapter, proper adjustment or recovery shall be made, 
under regulations prescribed by the Commissioner of Social Security, as 
follows:
        (A) With respect to payment to a person of more than the correct 
    amount, the Commissioner of Social Security shall decrease any 
    payment under this subchapter to which such overpaid person is 
    entitled, or shall require such overpaid person or his estate to 
    refund the amount in excess of the correct amount, or shall decrease 
    any payment under this subchapter payable to his estate or to any 
    other person on the basis of the wages and self-employment income 
    which were the basis of the payments to such overpaid person, or 
    shall obtain recovery by means of reduction in tax refunds based on 
    notice to the Secretary of the Treasury as permitted under section 
    3720A of title 31, or shall apply any combination of the foregoing. 
    A payment made under this subchapter on the basis of an erroneous 
    report of death by the Department of Defense of an individual in the 
    line of duty while he is a member of the uniformed services (as 
    defined in section 410(m) of this title) on active duty (as defined 
    in section 410(l) of this title) shall not be considered an 
    incorrect payment for any month prior to the month such Department 
    notifies the Commissioner of Social Security that such individual is 
    alive.
        (B) With respect to payment to a person of less than the correct 
    amount, the Commissioner of Social Security shall make payment of 
    the balance of the amount due such underpaid person, or, if such 
    person dies before payments are completed or before negotiating one 
    or more checks representing correct payments, disposition of the 
    amount due shall be made in accordance with subsection (d) of this 
    section.

    (2) Notwithstanding any other provision of this section, when any 
payment of more than the correct amount is made to or on behalf of an 
individual who has died, and such payment--
        (A) is made by direct deposit to a financial institution;
        (B) is credited by the financial institution to a joint account 
    of the deceased individual and another person; and
        (C) such other person was entitled to a monthly benefit on the 
    basis of the same wages and self-employment income as the deceased 
    individual for the month preceding the month in which the deceased 
    individual died,

the amount of such payment in excess of the correct amount shall be 
treated as a payment of more than the correct amount to such other 
person. If any payment of more than the correct amount is made to a 
representative payee on behalf of an individual after the individual's 
death, the representative payee shall be liable for the repayment of the 
overpayment, and the Commissioner of Social Security shall establish an 
overpayment control record under the social security account number of 
the representative payee.

(b) No recovery from persons without fault

    In any case in which more than the correct amount of payment has 
been made, there shall be no adjustment of payments to, or recovery by 
the United States from, any person who is without fault if such 
adjustment or recovery would defeat the purpose of this subchapter or 
would be against equity and good conscience. In making for purposes of 
this subsection any determination of whether any individual is without 
fault, the Commissioner of Social Security shall specifically take into 
account any physical, mental, educational, or linguistic limitation such 
individual may have (including any lack of facility with the English 
language).

(c) Nonliability of certifying and disbursing officers

    No certifying or disbursing officer shall be held liable for any 
amount certified or paid by him to any person where the adjustment or 
recovery of such amount is waived under subsection (b) of this section, 
or where adjustment under subsection (a) of this section is not 
completed prior to the death of all persons against whose benefits 
deductions are authorized.

(d) Payment to survivors or heirs when eligible person is deceased

    If an individual dies before any payment due him under this 
subchapter is completed, payment of the amount due (including the amount 
of any unnegotiated checks) shall be made--
        (1) to the person, if any, who is determined by the Commissioner 
    of Social Security to be the surviving spouse of the deceased 
    individual and who either (i) was living in the same household with 
    the deceased at the time of his death or (ii) was, for the month in 
    which the deceased individual died, entitled to a monthly benefit on 
    the basis of the same wages and self-employment income as was the 
    deceased individual;
        (2) if there is no person who meets the requirements of 
    paragraph (1), or if the person who meets such requirements dies 
    before the payment due him under this subchapter is completed, to 
    the child or children, if any, of the deceased individual who were, 
    for the month in which the deceased individual died, entitled to 
    monthly benefits on the basis of the same wages and self-employment 
    income as was the deceased individual (and, in case there is more 
    than one such child, in equal parts to each such child);
        (3) if there is no person who meets the requirements of 
    paragraph (1) or (2), or if each person who meets such requirements 
    dies before the payment due him under this subchapter is completed, 
    to the parent or parents, if any, of the deceased individual who 
    were, for the month in which the deceased individual died, entitled 
    to monthly benefits on the basis of the same wages and self-
    employment income as was the deceased individual (and, in case there 
    is more than one such parent, in equal parts to each such parent);
        (4) if there is no person who meets the requirements of 
    paragraph (1), (2), or (3), or if each person who meets such 
    requirements dies before the payment due him under this subchapter 
    is completed, to the person, if any, determined by the Commissioner 
    of Social Security to be the surviving spouse of the deceased 
    individual;
        (5) if there is no person who meets the requirements of 
    paragraph (1), (2), (3), or (4), or if each person who meets such 
    requirements dies before the payment due him under this subchapter 
    is completed, to the person or persons, if any, determined by the 
    Commissioner of Social Security to be the child or children of the 
    deceased individual (and, in case there is more than one such child, 
    in equal parts to each such child);
        (6) if there is no person who meets the requirements of 
    paragraph (1), (2), (3), (4), or (5), or if each person who meets 
    such requirements dies before the payment due him under this 
    subchapter is completed, to the parent or parents, if any, of the 
    deceased individual (and, in case there is more than one such 
    parent, in equal parts to each such parent); or
        (7) if there is no person who meets the requirements of 
    paragraph (1), (2), (3), (4), (5), or (6), or if each person who 
    meets such requirements dies before the payment due him under this 
    subchapter is completed, to the legal representative of the estate 
    of the deceased individual, if any.

(e) Adjustments due to supplemental security income payments

    For payments which are adjusted by reason of payment of benefits 
under the supplemental security income program established by subchapter 
XVI of this chapter, see section 1320a-6 of this title.

(f) Collection of delinquent amounts

    (1) With respect to any deliquent \1\ amount, the Commissioner of 
Social Security may use the collection practices described in sections 
3711(f), 3716, 3717, and 3718 of title 31 and in section 5514 of title 
5, all as in effect immediately after April 26, 1996.
---------------------------------------------------------------------------
    \1\ So in original. Probably should be ``delinquent''.
---------------------------------------------------------------------------
    (2) For purposes of paragraph (1), the term ``delinquent amount'' 
means an amount--
        (A) in excess of the correct amount of payment under this 
    subchapter;
        (B) paid to a person after such person has attained 18 years of 
    age; and
        (C) determined by the Commissioner of Social Security, under 
    regulations, to be otherwise unrecoverable under this section after 
    such person ceases to be a beneficiary under this subchapter.

(g) Recovery of overpayment of supplemental security income benefits

    For payments which are adjusted or withheld to recover an 
overpayment of supplemental security income benefits paid under 
subchapter XVI of this chapter (including State supplementary payments 
paid under an agreement pursuant to section 1382e(a) of this title or 
section 212(b) of Public Law 93-66), see section 1320b-17 of this title.

(Aug. 14, 1935, ch. 531, title II, Sec. 204, 49 Stat. 624; Aug. 10, 
1939, ch. 666, title II, Sec. 201, 53 Stat. 1362, 1368; Aug. 28, 1950, 
ch. 809, title I, Sec. 109(b)(1), 64 Stat. 523; Sept. 1, 1954, ch. 1206, 
title I, Sec. 111(a), 68 Stat. 1085; Pub. L. 89-97, title III, Sec. 329, 
July 30, 1965, 79 Stat. 401; Pub. L. 90-248, title I, Secs. 152, 153(a), 
154(a), Jan. 2, 1968, 81 Stat. 860, 861; Pub. L. 96-265, title V, 
Sec. 501(b), June 9, 1980, 94 Stat. 470; Pub. L. 99-272, title XII, 
Sec. 12113(a), Apr. 7, 1986, 100 Stat. 288; Pub. L. 101-239, title X, 
Sec. 10305(b), Dec. 19, 1989, 103 Stat. 2483; Pub. L. 101-508, title V, 
Sec. 5129(a), Nov. 5, 1990, 104 Stat. 1388-287; Pub. L. 103-296, title 
I, Sec. 107(a)(4), Aug. 15, 1994, 108 Stat. 1478; Pub. L. 103-387, 
Sec. 5(a), Oct. 22, 1994, 108 Stat. 4077; Pub. L. 104-134, title III, 
Sec. 31001(z)(2)(A), Apr. 26, 1996, 110 Stat. 1321-379; Pub. L. 104-316, 
title I, Sec. 115(g)(2)(E), Oct. 19, 1996, 110 Stat. 3835; Pub. L. 105-
306, Sec. 8(b)(1), Oct. 28, 1998, 112 Stat. 2929; Pub. L. 106-169, title 
II, Secs. 201(a), 203(c), Dec. 14, 1999, 113 Stat. 1831, 1832.)

                       References in Text

    Section 212(b) of Public Law 93-66, referred to in subsec. (g), is 
section 212(b) of Pub. L. 93-66, title II, July 9, 1973, 87 Stat. 156, 
as amended, which is set out as a note under section 1382 of this title.


                               Amendments

    1999--Subsec. (a)(2). Pub. L. 106-169, Sec. 201(a), inserted at end 
``If any payment of more than the correct amount is made to a 
representative payee on behalf of an individual after the individual's 
death, the representative payee shall be liable for the repayment of the 
overpayment, and the Commissioner of Social Security shall establish an 
overpayment control record under the social security account number of 
the representative payee.''
    Subsec. (f)(1). Pub. L. 106-169, Sec. 203(c), substituted 
``3711(f)'' for ``3711(e)'' and inserted ``all'' before ``as in 
effect''.
    1998--Subsec. (g). Pub. L. 105-306 added subsec. (g).
    1996--Subsec. (f). Pub. L. 104-134, which directed that subsec. (f) 
be amended to read as follows: ``(f)(1) With respect to any deliquent 
amount, the Commissioner of Social Security may use the collection 
practices described in sections 3711(f), 3716, 3717, and 3718 of title 
31 and in section 5514 of title 5, as in effect immediately after April 
26, 1996.'', was executed by substituting the new language for par. (1) 
only to reflect the probable intent of Congress. Prior to amendment, 
par. (1) read as follows: ``With respect to any delinquent amount, the 
Commissioner of Social Security may use the collection practices 
described in sections 3711(f), 3716, and 3718 of title 31 as in effect 
on October 1, 1994.''
    Subsec. (f)(1). Pub. L. 104-316 substituted ``sections 3711(e)'' for 
``sections 3711(f)''.
    1994--Subsecs. (a)(1), (b), (d)(1), (4), (5). Pub. L. 103-296, 
Sec. 107(a)(4), substituted ``Commissioner of Social Security'' for 
``Secretary'' wherever appearing.
    Subsec. (f). Pub. L. 103-387 added subsec. (f).
    1990--Subsec. (a)(1)(A). Pub. L. 101-508 inserted ``or shall obtain 
recovery by means of reduction in tax refunds based on notice to the 
Secretary of the Treasury as permitted under section 3720A of title 
31,'' after ``payments to such overpaid person,''.
    1989--Subsec. (b). Pub. L. 101-239 inserted at end ``In making for 
purposes of this subsection any determination of whether any individual 
is without fault, the Secretary shall specifically take into account any 
physical, mental, educational, or linguistic limitation such individual 
may have (including any lack of facility with the English language).''
    1986--Subsec. (a). Pub. L. 99-272 redesignated existing subsec. (a) 
as (a)(1) and pars. (1) and (2) thereof as subpars. (A) and (B), 
respectively, and added par. (2).
    1980--Subsec. (e). Pub. L. 96-265 added subsec. (e).
    1968--Subsec. (a). Pub. L. 90-248, Sec. 152(a), incorporated in text 
preceding par. (1) part of existing provisions and broadened the 
Secretary's authority to include recovery of overpayments.
    Subsec. (a)(1). Pub. L. 90-248, Sec. 153(a), inserted last sentence 
which provided that payments made on an erroneous report by the Defense 
Department of the death, in the line of duty, of a member of the 
uniformed services on active duty are not to be deemed incorrect 
payments until the Department notifies the Secretary that he is alive.
    Subsec. (a)(2). Pub. L. 90-248, Sec. 152(a), incorporated in par. 
(2) part of existing provisions and broadened Secretary's authority to 
provide that in the case of underpayments, the Secretary is to pay the 
balance due the underpaid person but if he dies before receiving the 
full amount due him or before negotiating checks representing the 
correct payments, the balance due or the amount for which the checks 
were issued but not negotiated are to be paid under subsec. (d) of this 
section.
    Subsec. (b). Pub. L. 90-248, Sec. 152(b), authorized the Secretary 
to waive adjustment or recovery of overpayments from any person who is 
without fault, even where he is not the overpaid person and the latter 
is at fault, whereas heretofore a condition for waiver was that the 
overpaid person be without fault.
    Subsec. (d). Pub. L. 90-248, Sec. 154(a), struck out, in text 
preceding par. (1), provision excepting subsec. (d) from subsec. (a) and 
provision that the total amount due at the time of death may not exceed 
the amount of the monthly insurance benefit to which an individual was 
entitled for the month preceding the month in which he died, added cl. 
(ii) in par. (1), added pars. (2) to (6), designated existing provisions 
as par. (7) and inserted therein references to pars. (1) to (6).
    1965--Subsec. (d). Pub. L. 89-97 added subsec. (d).
    1954--Subsec. (a). Act Sept. 1, 1954, inserted ``and self-employment 
income'' after ``wages'' in second sentence.
    1950--Act Aug. 28, 1950, substituted ``Administrator'' for 
``board''.
    1939--Act Aug. 10, 1939, omitted former provisions relating to 
payments to aged individuals not qualified for benefits and substituted 
the present section relating to overpayments and underpayments.


                    Effective Date of 1999 Amendment

    Pub. L. 106-169, title II, Sec. 201(c), Dec. 14, 1999, 113 Stat. 
1831, provided that: ``The amendments made by this section [amending 
this section and section 1383 of this title] shall apply to overpayments 
made 12 months or more after the date of the enactment of this Act [Dec. 
14, 1999].''
    Amendment by section 203(c) of Pub. L. 106-169 applicable to debt 
outstanding on or after Dec. 14, 1999, see section 203(d) of Pub. L. 
106-169, set out as a note under section 3701 of Title 31, Money and 
Finance.


                    Effective Date of 1998 Amendment

    Pub. L. 105-306, Sec. 8(c), Oct. 28, 1998, 112 Stat. 2930, provided 
that: ``The amendments made by this section [enacting section 1320b-17 
of this title and amending this section and section 1383 of this title] 
shall take effect on the date of the enactment of this Act [Oct. 28, 
1998] and shall apply to amounts incorrectly paid which remain 
outstanding on or after such date.''


                    Effective Date of 1994 Amendments

    Amendment by Pub. L. 103-387 applicable to collection activities 
begun on or after Oct. 22, 1994, see section 5(c) of Pub. L. 103-387, as 
amended, set out as a note under section 3701 of Title 31, Money and 
Finance.
    Amendment by Pub. L. 103-296 effective Mar. 31, 1995, see section 
110(a) of Pub. L. 103-296, set out as a note under section 401 of this 
title.


                    Effective Date of 1990 Amendment

    Amendment by Pub. L. 101-508 effective Jan. 1, 1991, and 
inapplicable to refunds to which the amendments made by section 2653 of 
the Deficit Reduction Act of 1984, Pub. L. 98-369, do not apply, see 
section 5129(d) of Pub. L. 101-508, set out as a note under section 6402 
of Title 26, Internal Revenue Code.


                    Effective Date of 1989 Amendment

    Amendment by Pub. L. 101-239 applicable with respect to 
determinations made on or after July 1, 1990, see section 10305(f) of 
Pub. L. 101-239, set out as a note under section 403 of this title.


                    Effective Date of 1986 Amendment

    Section 12113(c) of Pub. L. 99-272 provided that: ``The amendments 
made by this section [amending this section and section 1383 of this 
title] shall apply only in the case of deaths of which the Secretary is 
first notified on or after the date of the enactment of this Act [Apr. 
7, 1986].''


                    Effective Date of 1980 Amendment

    Amendment by Pub. L. 96-265 applicable in the case of payments of 
monthly insurance benefits under this subchapter, entitlement for which 
is determined on or after July 1, 1981, see section 501(d) of Pub. L. 
96-265, set out as an Effective Date note under section 1320a-6 of this 
title.


                    Effective Date of 1968 Amendment

    Section 153(b) of Pub. L. 90-248 provided that: ``The amendment made 
by this section [amending this section] shall apply with respect to 
benefits under title II of the Social Security Act [this subchapter] if 
the individual to whom such benefits were paid would have been entitled 
to such benefits in or after the month in which this Act was enacted 
[January 1968] if the report mentioned in the amendment made by 
subsection (a) of this section had been correct (but without regard to 
the provisions of section 202(j)(1) of such Act [section 402(j)(1) of 
this title]).''


                    Effective Date of 1939 Amendment

    Section 201 of act Aug. 10, 1939, provided that the amendment made 
by that section is effective Jan. 1, 1940.

                  Section Referred to in Other Sections

    This section is referred to in sections 405, 423, 909 of this title; 
title 26 section 6402; title 30 section 923; title 31 sections 3701, 
3720A.