overpayment- stay?

mwohlsen · Joined: 07 Nov 2007 Posts: 40 Location: Lancaster, PA

In a nut shell, I have a cl who accumulated a significant overpayment over the years. (She is disabled in her own right but she collects benefits on her deceased husband's record.) She filed a Waiver, which was denied, but she was scheduled for a personal conference at the DO to discuss the overpayment. I have never been to a conference such as this but from what I gather, this is when you should negotiate a reasonable re-payment schedule. Cl went to the meeting on her own and it was decided she will have $250 deducted out of every check to go towards the overpayment. By taking out $250, she is left w/ $391/month to cover her living expenses. Well, this is when she comes crying to me (I am obligated to get involved b/c she is an old PI cl).

I call the Lancaster DO and say we need to re-re-negotiate her payment plan. Lancaster says "no sorry, it's too late" you have to file an appeal to an ALJ. Ok I said and the appeal was filed. Here is where I am at a loss: I assumed (this is a bad thing to do), the filing of the appeal would put an automatic stay on SSA taking the $250 out per month until the case was heard by an ALJ. The month after the filing of the appeal, $250 came out again so I called the DO and they explained to me that the $250 came out one last time b/c the appeal took a few weeks to process. That made sense so I explained it to my client and left it at that.

Well, unlike what the DO originally told us, there has been no stopping the $250 from coming out each and every month since we filed the appeal. I called today and was told (by a different rep of course) that there is no way to stop the $250 from coming out, even though the matter is on appeal.

Can anyone shed some light on this situation? Is the DO correct... filing an appeal does not stop the deduction? Can I not ask for a 'stay of proceedings' or something like that so there is a "freeze" on the $250? Thank you.

Guest · Posted: Thu Sep 02, 2010 11:04 pm Post subject:

Unfortunately, a request for hearing filed on a overpayment issue does not suspend collection of the overpayment. Collection is only stayed through the date of the personal conference decision.

She could try calling the 800 number and requesting a lower rate of collection - they usually don't bat an eye at changing the withholding amount if it will get the claimant off the telephone. If that doesn't work, I'd complete a new financial statement with the client, making sure to list all of her income and expenses, to determine exactly what she can afford to repay (making it clear in her request for reduced withholding that she is not admitting fault). Then, I'd visit the FO and insist on speaking to a supervisor to get something done.

The whole purpose of the financial statement is to determine what the claimant can pay. If the claimant was at fault, they'll have to pay something. However, you aren't allowed to penalize the claimant in an arbitrary manner just because you want to. It might even be a good idea to enlist the assistance of her congressional representative - members of management hate having to deal with congressional inquiries, especially if the inquiry will make them look bad because it resulted from one of their employees thumbing their nose at following official policy.