but does not meet the condition described in subparagraph (7) (iv) of this paragraph, or (b) the beneficiary is a citizen of a country that has no social insurance or pension system of general application if at any time within 5 years prior to January 1968 (or 'the first month after December 1967 in which his benefits are subject to suspension pursuant to paragraph (a) of this section) payments to individuals residing in such country were withheld by the Treasury Department under the first section of the Act of October 9, 1940 (31 U.S.C. 123) (see paragraph (c) of this section);

(iii) For purposes of this subparagraph a period of residence begins with the day the insured individual arrives in the United States with the intention of establishing at least a temporary home here; it continues so long as he maintains an attachment to an abode in the United States, accompanied by actual physical presence in the United States for a significant part of the period; and ends 'with the day of departure from the United States with the intention to reside elsewhere; or

(3) The individual is outside the United States while in the active military or naval service of the United States;

or

(4) The individual on whose earnings the benefit is based died before that month and:

(i) Death occurred while the individual was on active duty or inactive duty training as a member of a uniformed service, or

(ii) Death occurred after the individual was discharged or released from a period of active duty or inactive duty training as a member of a uniformed service, and the Administrator of Veterans' Affairs determines, and certifies to the Secretary, that the discharge or release was under conditions other than dishonorable and that death was as a result of a disease or injury incurred or aggravated in line of duty while on active duty or inactive duty training; or

(5) The individual on whose earnings record the benefit is based worked in service covered by the Railroad Retirement Act, and such work is treated as employment covered by the Social Security Act under the provisions described in Subpart O of this part; or

(6) The nonpayment of monthly benefits under the provisions described in paragraph (a) of this section would be contrary to a treaty obligation of the

United States in effect on August 1, 1956 (see § 404.463(b)); or

(7) The individual is a citizen of a foreign country that the Secretary determines has in effect a social insurance or pension system (see § 404.463) which meets all of the following conditions:

(i) Such system pays periodic benefits or the actuarial equivalent thereof; and

(ii) The system is of general application; and

(iii) Benefits are paid in this system on account of old age, retirement, or death; and

(iv) Individuals who are citizens of the United States but not citizens of the foreign country and who qualify for such benefits are permitted to receive benefits without restriction or qualification, at their full rate, or the actuarial equivalent thereof, while outside of the foreign country and without regard to the duration of their absence therefrom.

(c) Nonpayment of monthly benefits to aliens residing in certain countries— (1) Benefits for months after June 1968. Notwithstanding the provisions of paragraphs (a) and (b) of this section, no monthly benefit may be paid for any month after June 1968 to any individual who is not a citizen or national of the United States for any month such individual resides in a country to which payments to individuals in such country are being withheld by the Treasury Department pursuant to the first section of the Act of October 9, 1940 (31 U.S.C. 123).

(2) Benefits for months before July 1968. If any benefits which an individual who is not a citizen or national of the United States was entitled to receive under title II of the Social Security Act are, on June 30, 1968, being withheld by the Treasury Department pursuant to the first section of the Act of October 9, 1940 (31 U.S.C. 123), upon removal of the restriction such benefits, payable to such individual for months after the month in which the determination by the Treasury Department that the benefits should be so withheld was made, shall not be paid

(i) To any person other than such individual, or, if such individual dies before such benefits can be paid, to any person other than an individual who was entitled for the month in which the deceased individual died (with the application of section 202(j) (1) of the

Social Security Act) to a monthly benefit under title II of such Act on the basis of the same wages and self-employment income as such deceased individual; or

(ii) In excess of an amount equal to the amount of the last 12 months' benefits that would have been payable to such individual.

(3) List of countries under Treasury Department alien nonpayment restriction. Pursuant to the provisions of the first section of the Act of October 9, 1940 (31 U.S.C. 123) the Treasury Department is currently withholding payments to individuals residing in the following countries. Further additions to or deletions from the list of countries will be published in the FEDERAL

REGISTER.

Albania.

Communist-controlled China.

Cuba.

North Korea.

North Vietnam.

Russian Zone of Occupation of Germany. Russian Sector of Occupation of Berlin, Germany.

[32 F.R. 19159, Dec. 20, 1967, as amended at 34 F.R. 13366, Aug. 19, 1969]

§ 404.461 Nonpayment of lump sum after death of alien outside United States for more than 6 months.

Where an individual dies outside the United States after January 1957 and no monthly benefit was or could have been paid to him for the month preceding the month in which he died because of the provisions described in § 404.460, no lump-sum death payment may be made upon the basis of the individual's earnings record.

§ 404.462 Nonpayment of hospital and medical insurance benefits of alien outside United States for more than 6 months.

No payments may be made under Part A (hospital insurance benefits) of title XVIII for items or services furnished to an individual in any month for which the prohibition described in § 404.460 against payment of benefits to an individual outside the United States for more than six full consecutive calendar months is applicable (or would be if he were entitled to any such benefits). Also, no payments may be made under Part B (supplementary medical insurance benefits) of title XVIII for expenses incurred by an individual during any month the individual is not paid a monthly benefit

by reason of the provisions described in § 404.460 or for which no monthly benefit would be paid if he were otherwise entitled thereto.

§ 404.463 Nonpayment of benefits of aliens outside the United States; "foreign social insurance system," and "treaty obligation" exceptions defined.

(a) "Foreign social insurance system” exception. The following criteria are used to evaluate the social insurance or pension system of a foreign country to determine whether the exception described in § 404.460 (b) to the alien nonpayment provisions applies:

(1) Social insurance or pension system. A "social insurance system" means a governmental plan which pays benefits as an earned right, on the basis either of contributions or work in employment covered under the plan, without regard to the financial need of the beneficiary. However, a plan of this type may still be regarded as a "social insurance system" though it may provide, in a subordinate fashion, for a supplemental payment based on need. A "pension system" means a governmental plan which pays benefits based on residence or age, or a private employer's plan for which the government has set up uniform standards for coverage, contributions, eligibility, and benefit amounts provided that, in both of these types of plans, the financial need of the beneficiary is not a consideration.

(2) "In effect." The social insurance or pension system of the foreign country must be "in effect." This means that the foreign social insurance or pension system is in full operation with regard to taxes (or contributions) and benefits, or is in operation with regard to taxes (or contribution and provision is made for payments to begin immediately upon the expiration of the period provided in the law for acquiring earliest eligibility. It is not "in effect" if the law leaves the beginning of operation to executive or other administrative action; nor is it in effect if the law has been temporarily suspended.

(3) "General application." The term "of general application" means that the social insurance or pension system (or combination of systems) covers a substantial portion of the paid labor force in industry and commerce, taking into consideration the industrial classification and size of the paid labor force and

the population of the country, as well as occupational, size of employer, and geographical limitations on coverage.

(4) "Periodic benefit or actuarial equivalent." The term "periodic benefit" means a benefit payable at stated regular intervals of time such as weekly, biweekly, or monthly. "Actuarial equivalent" of a periodic benefit means the commutation of the value of the periodic benefit into a lump-sum payment, taking life expectancy and interest into account.

(5) Benefits payable on account of old age, retirement, or death. The requirement that benefits be payable "on account of old age, retirement, or death,' is satisfied if the foreign social insurance plan or system includes provision for payment of benefits to aged or retired persons and to dependents and survivors of covered workers. The requirement is also met where the system pays benefits based only on old age or retirement. The requirement is not met where the only benefits payable are workmen's compensation payments, cash sickness payments, unemployment compensation payments, or maternity insurance benefits.

(6) System under which U.S. citizens who qualify may receive payment while outside the foreign country. The foreign social insurance or pension system must permit payments to qualified U.S. citizens while outside such foreign country, regardless of the duration of their absence therefrom and must make the payments without restriction or qualification to these U.S. citizens at full rate, or at the full actuarial value. The foreign system is considered to pay benefits at the full rate if the U.S. citizen receives the full benefit rate in effect for qualified beneficiaries at the time of his award, whether he is then inside or outside the paying country; and he continues to receive the same benefit amount so long as he remains outside that country, even though he may not receive any increases going into effect after his award, provided that in those other countries in which such increases are denied to beneficiaries, they are denied to all beneficiaries including nationals of the paying country.

(7) List of countries which meet the social insurance or pension system exception in section 202(t) (2) of the Act. The following countries have been found to have in effect a social insurance or pension system which meets the requirements of section 202(t) (2) of the Act.

Unless otherwise specified, each country meets such requirements effective January 1957. The effect of these findings is that beneficiaries who are citizens of such countries and not citizens of the United States may be paid benefits regardless of the duration of their absence from the United States unless for months beginning after June 1968 they are residing in a country to which payments to individuals are being withheld by the Treasury Department pursuant to the first section of the Act of October 9, 1940 (31 U.S.C. 123). Further additions to or deletions from the list of countries will be published in the FEDERAL REGISTER. Austria (except from January 1958 through June 1961).

Barbados (effective July 1968).
Bolivia.
Brazil.

Canada (effective January 1966).
Chile.

Congo (Kinshasa) (effective July 1961).
Costa Rica (effective May 1962).
Cyprus (effective October 1964).
Czechoslovakia (effective July 1968).
Denmark (effective April 1964).

Ecuador.

Finland (effective May 1968).

France (effective June 1968).
Ivory Coast.

Jamaica (effective July 1968).
Luxembourg.

Malta (effective September 1964).
Mexico (effective March 1968).
Monaco.

Netherlands (effective July 1968).
Norway (effective June 1968).
Panama.

Philippines (effective June 1960).
Poland (effective March 1957).
Portugal (effective May 1968).

San Marino (effective January 1965).
Spain (effective May 1966).
Sweden (effective July 1966).
Switzerland (effective July 1968).
Turkey.

United Kingdom.

Upper Volta (effective October 1960).
Yugoslavia.

(b) The "treaty obligation" exception. It is determined that the Treaties of Friendship, Commerce, and Navigation now in force between the United States and the Federal Republic of Germany, Greece, the Republic of Ireland, Israel, Italy, Japan, and Nicaragua, respectively, create treaty obligations precluding the application of § 404.460 (a) to citizens of such countries; and that the Treaty of Friendship, Commerce, and Navigation now in force between the United States and the Kingdom of the Netherlands creates treaty obligations precluding the

application of § 404.460 (a) to citizens of that country with respect to monthly survivors benefits only. There is no treaty obligation that would preclude the application of § 404.460 (a) to citizens of any country other than those listed above.

[32 F.R. 19159, Dec. 20, 1967, as amended at 34 F.R. 13367, Aug. 19, 1969]

§ 404.464 Nonpayment of benefits where individual is deported; prohibition against payment of lump sum based on deported individual's earnings records.

(a) Old-age or disability insurance benefits. When an individual is deported (after September 1, 1954) under the provisions of paragraphs (1), (2), (4), (5), (6), (7), (10), (11), (12), (14), (15), (16), (17), or (18) of section 241(a) of the Immigration and Nationality Act, no old-age or disability insurance benefit is payable to the individual for any month occurring after the month in which the Administration is notified by the Attorney General of the United States that the individual has been deported and before the month in which the individual is thereafter lawfully admitted to the United States for permanent residence. An individual is considered lawfully admitted for permanent residence as of the month he enters the United States with permission to reside here permanently.

(b) Other monthly benefits. If, under the provisions described in paragraph (a) of this section, no old-age or disability insurance benefit is payable to an individual for a month, no monthly insurance benefit is payable for that month, based upon the individual's earnings record, to any other person who is not a citizen of the United States and who is outside the United States for any part of that month.

(c) Lump-sum death payment. No lump-sum death payment is payable on the basis of the earnings of an individual deported under paragraphs (1), (2), (4), (5), (6), (7), (10), (11), (12), (14), (15), (16), (17), or (18) of section 241(a) of the Immigration and Nationality Act if the individual dies in or after the month in which notice that he has been deported is received by the Administration and before the month in which the individual is thereafter lawfully admitted to the United States for permanent residence.

§ 404.465

Conviction for subversive activities; effect on monthly benefits and entitlement to hospital insurance benefits.

(a) Effect of conviction. Where an individual is convicted of any offense (committed after August 1, 1956) under chapter 37 (relating to espionage and censorship), chapter 105 (relating to sabotage), or chapter 115 (relating to treason, sedition, and subversive activities) of title 18 of the United States Code, or under section 4, 112, or 113 of the Internal Security Act of 1950, as amended, the court, in addition to all other penalties provided by law, may order that, in determining whether any monthly benefit is payable to the individual for the month in which he is convicted or for any month thereafter, and in determining whether the individual is entitled to hospital insurance benefits under Part A of title XVIII for any such month, and in determining the amount of the benefit for that month, the following are not to be taken into account:

(1) Any wages paid to such individual, or to any other individual, in the calendar quarter in which such conviction occurred or in any prior calendar quarter, and

(2) Any net earnings from self-employment derived by the individual, or any other individual, during the taxable year in which the conviction occurred or during any prior taxable year.

(b) Recalculation of benefit. When notified by the Attorney General that the additional penalty as described in paragraph (a) of this section has been imposed against any individual entitled to benefits under section 202 or section 223 of the Act (see Subpart D), the Administration, for the purposes of determining the individual's entitlement to such benefits as of the month in which convicted and the amount of the benefit, will exclude the applicable wages and net earnings in accordance with the order of the court.

(c) Effect of pardon. In the event that an individual, with respect to whom the additional penalty as described in paragraph (a) of this section has been imposed, is granted a pardon of the offense by the President of the United States, such penalty is not applied in determining such individual's entitlement to benefits, and the amount of such benefit, for any month beginning after the date on which the pardon is granted.

§ 404.466 Conviction for subversive activities; effect on enrollment for supplementary medical insurance benefits.

An individual may not enroll under Part B (supplementary medical insurance benefits) of title XVIII if he has been convicted of any offense described in § 404.465.

§ 404.467 Nonpayment of benefits; individual entitled to disability insurance benefits based on blindness is engaging in substantial gainful activity.

An individual who has attained age 55 and who meets the definition of disability for disability insurance benefit purposes based on "statutory blindness," as defined in § 404.1501, may be entitled to disability insurance benefits for months in which he is engaged in certain types of substantial gainful activity. No payment, however, may be made to the individual or to beneficiaries entitled to benefits on his earnings record for any month in which such individual engages in any type of substantial gainful activity.

Subpart F-Overpayments, Underpayments, Waiver of Adjustment or Recovery of Overpayments, and Liability of a Certifying Officer AUTHORITY NOTE: The provisions of this Subpart F issued under sec. 204, 49 Stat. 624, as amended; 42 U.S.C. 404, unless otherwise noted.

(a) In general. Section 204 of the Act provides for adjustment as set forth in §§ 404.502 and 404.503, in cases where an individual has received more or less than the correct payment due under title II of the Act. As used in this subpart, the term "overpayment" includes a payment in excess of the amount due under title II of the Act, a payment resulting from the failure to impose deductions or to suspend or reduce benefits under sections 203, 222(b), 224, and 228 (c), and (d), and (e) of the Act (see Subpart E of this part), a payment pursuant to section 205 (n) of the Act in an amount in excess of the amount to which the individual is entitled under section 202 or 223 of the Act, a payment resulting from the failure to terminate benefits, and a payment where no amount is payable under title II of the Act. The

term "underpayment" as used in this subpart refers only to monthly insurance benefits and includes nonpayment where some amount of such benefits was payable. An underpayment may be in the form of an accrued unpaid benefit amount for which no check has been drawn or in the form of an unnegotiated check payable to a deceased individual. The provisions for adjustment also apply in cases where through error:

(1) A reduction required under section 202(j) (1), 202(k) (3), 203(a), or 205(n) of the Act is not made, or

(2) An increase required under section 202(d) (2), 202(m), or 215 (f) or (g) of the Act is not made, or

(3) A deduction required under section 203(b) (as may be modified by the provisions of section 203 (h)), 203(c), 203 (d), 203 (i), 222(b), or 223(a) (1) (D) of the Act or section 907 of the Social Security Amendments of 1939 is not made,

or

(4) A suspension required under section 202(n) or 202(t) of the Act is not made, or

(5) A reduction under section 202 (q) of the Act is not made, or

(6) A reduction, increase, deduction, or suspension is made which is either more or less than required, or

(7) A payment in excess of the amount due under title XVIII of the Act was made to or on behalf of an individual (see §§ 405.350-405.351) entitled to benefits under title II of the Act, or

(8) A payment of past due benefits is made to an individual and such payment had not been reduced by the amount of attorney's fees payable directly to an attorney under section 206 of the Act (see § 404.977).

(b) Payments made on the basis of an erroneous report of death. Any monthly benefit or lump sum paid under title II of the Act on the basis of an erroneous report by the Department of Defense of the death of an individual in the line of duty while such individual was a member of the uniformed services (as defined in section 210 (m) of the Act) on active duty (as defined in section 210(1) of the Act) is deemed a correct payment for any month prior to the month such Department notifies the Administration that such individual is alive.

[34 F.R. 14887, Sept. 27, 1969] § 404.502 Overpayments.

Upon determination that an overpayment has been made, adjustments will