[Code of Federal Regulations]
[Title 20, Volume 2]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 20CFR404.509]

[Page 197-198]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
               CHAPTER III--SOCIAL SECURITY ADMINISTRATION
 
PART 404_FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- )
--Table of Contents
 
Subpart F_Overpayments, Underpayments, Waiver of Adjustment or Recovery 
         of Overpayments, and Liability of a Certifying Officer
 
Sec. 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.

    Example 1. A widow, having been awarded benefits for herself and 
daughter, entered her daughter in private school because the monthly 
benefits made this possible. 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. The 
widow has no other funds with which to pay the daughter's private school 
expenses. Having entered the daughter in private school and thus 
incurred a financial obligation toward which the benefits had been 
applied, she was in a worse position financially than if she and her 
daughter had never been entitled to benefits. In this situation, the 
recovery of the payments would be against equity and good conscience.
    Example 2. After being awarded old-age insurance benefits, an 
individual resigned from employment on the assumption he would receive 
regular monthly benefit payments. It was discovered 3 years later that 
(due to a Social Security Administration error) his award was erroneous 
because he did not have the required insured status. Due to his age, the 
individual was unable to get his job back and could not get any other 
employment. In this situation, recovery of the overpayments would be 
against equity and good conscience because the individual gave up a 
valuable right.
    Example 3. M divorced K and married L. M died a few years later. 
When K files for benefits as a surviving divorced wife, she learns that 
L had been overpaid $3,200 on M's earnings record. Because K and L are 
both entitled to benefits on M's record of earnings and we could not 
recover the overpayment from L, we sought recovery from K. K was living 
in a separate household from L at the time of the overpayment and did 
not receive the overpayment. K requests waiver of recovery of the $3,200 
overpayment from benefits due her as a surviving divorced wife of M. In 
this situation, it would be against equity and good conscience to 
recover the overpayment from K.

[[Page 198]]

    Example 4. G filed for and was awarded benefits. His daughter, T, 
also filed for student benefits on G's earnings record. Since T was an 
independent, full-time student living in another State, she filed for 
benefits on her own behalf. Later, after T received 12 monthly benefits, 
the school reported that T had been a full-time student only 2 months 
and had withdrawn from school. Since T was overpaid 10 monthly benefits, 
she was requested to return the overpayment to SSA. T did not return the 
overpayment and further attempts to collect the overpayment were 
unsuccessful. G was asked to repay the overpayment because he was 
receiving benefits on the same earnings record. G requested waiver. To 
support his waiver request G established that he was not at fault in 
causing the overpayment because he did not know that T was receiving 
benefits. Since G is without fault and, in addition, meets the 
requirements of not living in the same household at the time of the 
overpayment and did not receive the overpayment, it would be against 
equity and good conscience to recover the overpayment from G.

[53 FR 25483, July 7, 1988]