---
kind: "range"
citation: "20 C.F.R. §§ 404.506–404.512"
title: "20"
from: "404.506"
to: "404.512"
count: 8
url: "https://uscodex.org/cfr/20/404.506..404.512"
---

# §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) We will apply the procedures in this [paragraph (b)](#b) when an individual requests waiver of all or part of a qualifying overpayment.
  - (1) For purposes of this [paragraph (b)](#b), a qualifying overpayment is one that accrued during the pandemic period (see [§ 404.501(a)](/cfr/20/404.501.md?p=a)) because of the actions that we took in response to the COVID-19 national public health emergency, including the suspension of certain of our manual workloads that would have processed actions identifying and stopping certain overpayments.
  - (2) Notwithstanding any other provision of this subpart, we will presume that an individual who requests waiver of a qualifying overpayment is without fault in causing the overpayment (see [§ 404.507](/cfr/20/404.507.md)) unless we determine that the qualifying overpayment made to a beneficiary or a representative payee was the result of fraud or similar fault or involved misuse of benefits by a representative payee (see [§ 404.2041](/cfr/20/404.2041.md)).
  - (3) If we determine under [paragraph (b)(2)](#b-2) of this section that an individual or a representative payee is without fault in causing a qualifying overpayment we will also determine that recovery of the qualifying overpayment would be against equity and good conscience. For purposes of this [paragraph (b)(3)](#b-3) only, “against equity and good conscience” is not limited to the meaning used in [§ 404.509](/cfr/20/404.509.md) but means a broad concept of fairness that takes into account all of the facts and circumstances of the case.
  - (4) If we determine that a primary beneficiary is not without fault with respect to a qualifying overpayment under [paragraph (b)(2)](#b-2) of this section, because it was caused by fraud or similar fault or because of representative payee misuse, we may still find that any auxiliary beneficiaries on the primary beneficiary's record are eligible for waiver of recovery of the qualifying overpayment under this [paragraph (b)](#b). If an auxiliary beneficiary requests waiver of a qualifying overpayment in accordance with this [paragraph (b)](#b), we will waive recovery of the overpayment if the auxiliary beneficiary meets all of the requirements of this [paragraph (b)](#b).
  - (5) The provisions of this [paragraph (b)](#b) will apply to a qualifying overpayment identified by December 31, 2020.
- (c) 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 [§ 404.502a](/cfr/20/404.502a.md), 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.
- (d) 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 [§ 404.507](/cfr/20/404.507.md)) and that adjustment or recovery would either defeat the purpose of title II of the Act (see [§ 404.508](/cfr/20/404.508.md)) or be against equity and good conscience (see [§ 404.509](/cfr/20/404.509.md)). 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. We will offer to the individual the option of conducting the personal conference face-to-face at a place we designate, by telephone, or by video teleconference. The notice will advise the individual of the date and time of the personal conference.
- (e) 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.
- (f) **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 [§ 404.1700](/cfr/20/404.1700.md)), although the individual must be present at the conference; and
  - (3) **Submit documents for consideration by the decisionmaker.**
- (g) **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.
- (h) 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.
- (i) 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 [§ 404.930(a)(7)](/cfr/20/404.930.md?p=a-7)).

# §404.507. Fault.


Fault as used in without fault (see [§ 404.506](/cfr/20/404.506.md) and [42 CFR 405.355](/cfr/42/405.355.md)) applies only to the individual. 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. In determining whether an individual is at fault, the Social Security Administration will consider all pertinent circumstances, including the individual's age and intelligence, and any physical, mental, educational, or linguistic limitations (including any lack of facility with the English language) the individual has. Notwithstanding any other provision of this subpart, we will not determine any overpaid individual to be at fault in causing a qualifying overpayment (see [§ 404.506(b)(1)](/cfr/20/404.506.md?p=b-1)) unless we determine that the qualifying overpayment made to a beneficiary or a representative payee during the pandemic period (see [§ 404.501](/cfr/20/404.501.md)) was the result of fraud or similar fault or involved misuse of benefits by a representative payee (see [§ 404.2041](/cfr/20/404.2041.md)). What constitutes fault (except for deduction overpayments—see [§ 404.510](/cfr/20/404.510.md)) on the part of the overpaid individual or on the part of any other individual from whom the Administration seeks to recover the overpayment depends upon whether the facts show that the incorrect payment to the individual or to a provider of services or other person, or an incorrect payment made under section 1814(e) of the Act, resulted from:

- (a) An incorrect statement made by the individual which he knew or should have known to be incorrect; or
- (b) Failure to furnish information which he knew or should have known to be material; or
- (c) With respect to the overpaid individual only, acceptance of a payment which he either knew or could have been expected to know was incorrect.

# §404.508. Defeat the purpose of Title II.

- (a) **General. Defeat the purpose of title II,—** for purposes of this subpart, means defeat the purpose of benefits under this title, i.e., to deprive a person of income required for ordinary and necessary living expenses. 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. 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 title 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.
- (b) **When adjustment or recovery will defeat the purpose of title II.** 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.

# §404.509. Against equity and good conscience; defined.

- (a) Recovery of an overpayment is against equity and good conscience (under title II and title XVIII) if an individual—
  - (1) Changed his or her position for the worse (Example 1) or relinquished a valuable right (Example 2) because of reliance upon a notice that a payment would be made or because of the overpayment itself; or
  - (2) Was living in a separate household from the overpaid person at the time of the overpayment and did not receive the overpayment (Examples 3 and 4).
- (b) The individual's financial circumstances are not material to a finding of against equity and good conscience.

# §404.510. When an individual is “without fault” in a deduction overpayment.


In determining whether an individual is “without fault” with respect to a deduction overpayment, the Social Security Administration will consider all pertinent circumstances, including the individual's age and intelligence, and any physical, mental, educational, or linguistic limitations (including any lack of facility with the English language) the individual has. Except as provided in [§ 404.511](/cfr/20/404.511.md) or elsewhere in this subpart F, situations in which an individual will be considered to be “without fault” with respect to a deduction overpayment include, but are not limited to, those that are described in this section. An individual will be considered “without fault” in accepting a payment which is incorrect because he/she failed to report an event specified in sections 203 (b) and (c) of the Act, or an event specified in section 203(d) of the Act as in effect for monthly benefits for months after December 1960, or because a deduction is required under section [203 (b)](/cfr/20/203.md?p=b), [(c)](/cfr/20/203.md?p=c), [(d)](/cfr/20/203.md?p=d), or section 222(b) of the Act, or payments were not withheld as required by [section 202(t)](/cfr/20/202.md?p=t) or section 228 of the Act, if it is shown that such failure to report or acceptance of the overpayment was due to one of the following circumstances:

- (a) Reasonable belief that only his net cash earnings (take-home pay) are included in determining the annual earnings limitation or the monthly earnings limitation under [section 203(f)](/cfr/20/203.md?p=f) of the Act.
- (b) Reliance upon erroneous information from an official source within the Social Security Administration (or other governmental agency which the individual had reasonable cause to believe was connected with the administration of benefits under title II of the Act) with respect to the interpretation of a pertinent provision of the Social Security Act or regulations pertaining thereto. For example, this circumstance could occur where the individual is misinformed by such source as to the interpretation of a provision in the Act or regulations relating to deductions, or relating to the effect of residence of an alien outside the United States for more than 6 months.
- (c) The beneficiary's death caused the earnings limit applicable to his earnings for purposes of deduction and the charging of excess earnings to be reduced below $1,680 for a taxable year ending after 1967.
- (d) [Reserved]
- (e) Reasonable belief that in determining, for deduction purposes, his earnings from employment and/or net earnings from self-employment in the taxable year in which he became entitled to benefits, earnings in such year prior to such entitlement would be excluded. However, this provision does not apply if his earnings in the taxable year, beginning with the first month of entitlement, exceeded the earnings limitation amount for such year.
- (f) Unawareness that his earnings were in excess of the earnings limitation applicable to the imposition of deductions and the charging of excess earnings or that he should have reported such excess where these earnings were greater than anticipated because of:
  - (1) Retroactive increases in pay, including back-pay awards;
  - (2) Work at a higher pay rate than realized;
  - (3) Failure of the employer of an individual unable to keep accurate records to restrict the amount of earnings or the number of hours worked in accordance with a previous agreement with such individual;
  - (4) The occurrence of five Saturdays (or other work days, e.g., five Mondays) in a month and the earnings for the services on the fifth Saturday or other work day caused the deductions.
- (g) The continued issuance of benefit checks to him after he sent notice to the Administration of the event which caused or should have caused the deductions provided that such continued issuance of checks led him to believe in good faith that he was entitled to checks subsequently received.
- (h) Lack of knowledge that bonuses, vacation pay, or similar payments, constitute earnings for purposes of the annual earnings limitation.
- (i) [Reserved]
- (j) Reasonable belief that earnings in excess of the earnings limitation amount for the taxable year would subject him to deductions only for months beginning with the first month in which his earnings exceeded the earnings limitation amount. However, this provision is applicable only if he reported timely to the Administration during the taxable year when his earnings reached the applicable limitation amount for such year.
- (k) Lack of knowledge by a wife, husband, or child entitled to wife's, husband's, or child's insurance benefits, as the case may be, that the individual entitled to old-age insurance benefits on the same earnings record has incurred or would incur deductions because of a violation of the annual earnings or 7-day foreign work test, whichever is applicable, provided the wife, husband, or child is not living with such old-age insurance beneficiary and did not know and had no reason to know that such beneficiary's earnings activity or the income derived therefrom has caused or would cause such deductions.
- (l) Reasonable belief, with respect to earnings activity for months after December 1982, that net earnings from self-employment after attainment of age 70 (age 72 for months after December 1972 and before January 1983) in the taxable year in which such age was attained would not cause deductions (see [§ 404.430(a)](/cfr/20/404.430.md?p=a)) with respect to benefits payable for months in that taxable year prior to the attainment of such age.
- (m) Reasonable belief by an individual entitled to child's, wife's, husband's, widow's, widower's, mother's, or parent's insurance benefits that earnings from employment and/or net earnings from self-employment after the termination of entitlement (other than termination by reason of entitlement to an old-age insurance benefit) in the taxable year in which the termination event occurred would not cause deductions with respect to benefits payable for months in that taxable year prior to the month in which the termination event occurred.
- (n) Failure to understand the deduction provisions of the Act or the occurrence of unusual or unavoidable circumstances the nature of which clearly shows that the individual was unaware of a violation of such deduction provisions.

# §404.510a. When an individual is “without fault” in an entitlement overpayment.


A benefit payment under title II or title XVIII of the Act to or on behalf of an individual who fails to meet one or more requirements for entitlement to such payment or a benefit payment exceeding the amount to which he is entitled, constitutes an entitlement overpayment. Where an individual or other person on behalf of an individual accepts such overpayment because of reliance on erroneous information from an official source within the Social Security Administration (or other governmental agency which the individual had reasonable cause to believe was connected with the administration of benefits under title II or title XVIII of the Act) with respect to the interpretation of a pertinent provision of the Social Security Act or regulations pertaining thereto, or where an individual or other person on behalf of an individual is overpaid as a result of the adjustment upward (under the family maximum provision in section 203 of the Act) of the benefits of such individual at the time of the proper termination of one or more beneficiaries on the same social security record and the subsequent reduction of the benefits of such individual caused by the reentitlement of the terminated beneficiary(ies) pursuant to a change in a provision of the law, such individual, in accepting such overpayment, will be deemed to be without fault. For purposes of this section governmental agency includes intermediaries and carriers under contract pursuant to sections [1816](/cfr/20/1816.md) and [1842](/cfr/20/1842.md) of the Act.


# §404.511. When an individual is at “fault” in a deduction overpayment.

- (a) **Degree of care.** 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. The high degree of care expected of an individual may vary with the complexity of the circumstances giving rise to the overpayment and the capacity of the particular payee to realize that he is being overpaid. 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.** The Social Security Administration generally will not find an individual to 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, the individual incurs another “deduction overpayment” under the same circumstances as the first overpayment. However, in determining whether the individual is without fault, the Social Security Administration will consider all of the pertinent circumstances surrounding the prior and subsequent “deduction overpayments,” including any physical, mental, educational, or linguistic limitations (including any lack of facility with the English language) which the individual may have.

# §404.512. When adjustment or recovery of an overpayment will be waived.

- (a) **Adjustment or recovery deemed “against equity and good conscience.”—** In the situations described in §§ [404.510(a)](/cfr/20/404.510.md?p=a), [(b)](/cfr/20/404.510.md?p=b), and [(c)](/cfr/20/404.510.md?p=c), and [404.510a](/cfr/20/404.510a.md), adjustment or recovery will be waived since it will be deemed such adjustment or recovery is against equity and good conscience. Adjustment or recovery will also be deemed against equity and good conscience in the situation described in [§ 404.510(e)](/cfr/20/404.510.md?p=e), but only as to a month in which the individual's earnings from wages do not exceed the total monthly benefits affected for that month.
- (b) **Adjustment or recovery considered to defeat the purpose of title II—** or be against equity and good conscience under certain circumstances. In the situation described in [§ 404.510(e)](/cfr/20/404.510.md?p=e) (except in the case of an individual whose monthly earnings from wages in employment do not exceed the total monthly benefits affected for a particular month), and in the situations described in [§ 404.510 (f) through (n)](/cfr/20/404.510.md?p=f..n), adjustment or recovery shall be waived only where the evidence establishes that adjustment or recovery would work a financial hardship (see [§ 404.508](/cfr/20/404.508.md)) or would otherwise be inequitable (see [§ 404.509](/cfr/20/404.509.md)).