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ment and/or net earnings from selfemployment after the attainment of age 72 in the taxable year in which he attained age 72 would not cause deductions with respect to benefits payable for months in that taxable year prior to the attainment of age 72.

(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. However, these provisions do not apply unless he made a bona fide attempt to restrict his annual earnings or otherwise comply with the deduction provisions of the Act.

[27 F.R. 1162, Feb. 8, 1962, as amended at 28 F.R. 14492, Dec. 31, 1963; 34 F.R. 14888, Sept. 27, 1969]

§ 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-overpay

ments. An individual will not 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, he incurs another "deduction overpayment" under the same circumstances as the first overpayment.

[16 F.R. 13054, Dec. 28, 1951]

§ 404.512 When adjustment or recovery will be waived in a deduction overpay.

ment.

(a) Adjustment or recovery deemed "against equity and good conscience." In the situations described in § 404.510 (a), (b), (c), and (d), 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), 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) (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), adjustment or recovery shall be waived only where the evidence establishes that adjustment or recovery would work a financial hardship (see § 404.508) would otherwise be inequitable § 404.509).

[27 F.R. 1163, Feb. 8, 1962] § 404.513

officer.

or (see

Liability of a certifying

No certifying or disbursing officer shall be held liable for any amount certified or paid by him to any individual.

(a) Where adjustment or recovery of such amount is waived under section 204(b) of the Act; or

(b) Where adjustment under section 204(a) of the Act is not completed prior to the death of all individuals against whose benefits or lump sums deductions are authorized; or

(c) Where a claim for recovery of an overpayment is compromised or collection or adjustment action is suspended

or terminated pursuant to the Federal Claims Collection Act of 1966 (31 U.S.C. 951-953) (see § 404.515).

[34 F.R. 14889, Sept. 27, 1969]

§ 404.515 Collection and compromise of claims for overpayment.

(a) General effect of the Federal Claims Collection Act of 1966. Claims by the Administration against an individual for recovery of overpayments under title II or title XVIII (not including title XVIII overpayments for which refund is requested from providers, physicians, or other suppliers of services) of the Act, not exceeding the sum of $20,000, exclusive of interest, may be compromised, or collection suspended or terminated where such individual or his estate does not have the present or prospective ability to pay the full amount of the claim within a reasonable time (see paragraph (c) of this section) or the cost of collection is likely to exceed the amount of recovery (see paragraph (d) of this section) except as provided under paragraph (b) of this section.

(b) When there will be no compromise, suspension or termination of collection of a claim for overpayment.-(1) Overpaid individual alive. In any case where the overpaid individual is alive, a claim for overpayment will not be compromised, nor will there be suspension or termination of collection of the claim by the Administration if there is an indication of fraud, the filing of a false claim, or misrepresentation on the part of such individual or on the part of any other party having an interest in the claim. (2) Overpaid individual deceased. In any case where the overpaid individual is deceased (i) a claim for overpayment in excess of $5,000 will not be compromised, nor will there be suspension or termination of collection of the claim by the Administration if there is an indication of fraud; the filing of a false claim, or misrepresentation on the part of such deceased individual, and (ii) a claim for overpayment regardless of the amount will not be compromised, nor will there be suspension or termination of collection of the claim by the Administration if there is an indication that any person other than the deceased overpaid individual had a part in the fraudulent action which resulted in the overpayment.

(c) Inability to pay claim for recovery of overpayment. In determining whether the overpaid individual is unable to pay

a claim for recovery of an overpayment under title II or title XVIII of the Act, the Administration will consider such individual's age, health, present and potential income (including inheritance prospects), assets (e.g., real property, savings account), possible concealment or improper transfer of assets, and assets or income of such individual which may be available in enforced collection proceedings. The Administration will also consider exemptions available to such individual under the pertinent State or Federal law in such proceedings. In the event the overpaid individual is deceased, the Administration will consider the available assets of the estate, taking into account any liens or superior claims against the estate.

(d) Cost of collection or litigative probabilities. Where the probable costs of recovering an overpayment under title II or title XVIII of the Act would not justify enforced collection proceedings for the full amount of the claim or there is doubt concerning the Administration's ability to establish its claim as well as the time which it will take to effect such collection, a compromise or settlement for less than the full amount will be considered.

(e) Amount of compromise. The amount to be accepted in compromise of a claim for overpayment under title II or title XVIII of the Act shall bear a reasonable relationship to the amount which can be recovered by enforced collection proceedings giving due consideration to the exemptions available to the overpaid individual under State or Federal law and the time which such collection will take.

(f) Payment. Payment of the amount which the Administration has agreed to accept as a compromise in full settlement of a claim for recovery of an overpayment under title II or title XVIII of the Act must be made within the time and in the manner set by the Administration. A claim for such recovery of the overpayment shall not be considered compromised or settled until the full payment of the compromised amount has been made within the time and manner set by the Administration. Failure of the overpaid individual or his estate to make such payment as provided shall result in reinstatement of the full amount of the overpayment less any amounts paid prior to such default.

[34 F.R. 14889, Sept. 27, 1969; 34 F.R. 15413, Oct. 3, 1969]

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(a) Claimant defined. The term "claimant" for purposes of this subpart refers to the individual who has filed on his own behalf, or on whose behalf a proper party under § 404.603 has filed, an application for monthly benefits, a lumpsum death payment, a recomputation of a primary insurance amount, or the establishment of a period of disability.

(b) Applicant defined. The term "applicant" for purposes of this subpart refers to the individual who has filed an application on his own behalf or on behalf of another for monthly benefits, a lump-sum death payment, a recomputation of a primary insurance amount, or the establishment of a period of disability.

(c) Application defined. Unless otherwise specified, the term "application" refers only to an application on a form prescribed in § 404.602, and includes an application for monthly benefits, a lumpsum death payment, a recomputation of a primary insurance amount, and the establishment of a period of disability.

(d) Filing of application on prescribed form. Except as provided in §§ 404.611, 404.613, and 404.614, an individual has not "filed an application" for purposes of sections 202, 216(i), or 223 of the Act or for purposes of recomputation of a primary insurance amount until an application on a form prescribed in § 404.602 has been filed in accordance with the regulations in this subpart.

(e) Execution of application defined. The term "to execute an application" (or a written statement, request, or notice, see §§ 404.610 and 404.613) means the completion and signing of the application (or written statement, request, or notice). Irrespective of who may have completed the items on the application, or written statement, request, or notice, the document is considered to have been executed by or on behalf of such claimant when it is signed by the claimant (or an individual authorized to do so on his behalf under § 404.603).

(Secs. 202, 223, 49 Stat. 623, as amended; 42 U.S.C. 402, 423) [27 F.R. 9943, Oct. 10, 1962]

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§ 404.603

Execution of applications.

The Administration determines who is the proper party to execute an application for benefits in accordance with the following rules:

(a) If the claimant has attained the age of 18, is mentally competent, and is physically able to execute the application, the application shall be executed by him. Where, however, paragraph (d) of this section applies, the application may also be executed by the claimant's legal guardian, committee, or other representative.

(b) If the claimant is between the ages of 16 and 18, is mentally competent, has no legally appointed guardian, committee, or other representative, and is not in the care of any person, such claimant may execute the application upon filing a statement on the prescribed form indicating capacity to act on his own behalf.

(c) If the claimant is mentally competent but has not attained age 18 and is in the care of a person, the application may be executed by such person.

(d) If the claimant (regardless of his age) has a legally appointed guardian, committee, or other representative, the application may be executed by such guardian, committee, or representative. For proper person to execute an application on behalf of an estate which is equitably entitled to a lump-sum death payment, see § 404.361.

(e) If the claimant (regardless of his age) is mentally incompetent or is physically unable to execute the application, it may be executed by the person who has the claimant in his care or by a legally appointed guardian, committee, or other representative.

(f) Where the claimant is in the care of an institution and is not mentally competent or physically able to execute an application, the manager or principal officer of such institution may execute the application.

(g) For good cause shown, the Administration may accept an application executed by a person other than one described in paragraph (b), (c), (d), (e), or (f) of this section.

[27 F.R. 1164, Feb. 8, 1962, as amended at 27 F.R. 9944, Oct. 10, 1962; 29 F.R. 15510, Nov. 19, 1964]

§ 404.604

Evidence of authority to execute an application on behalf of another.

Where the application is executed by a person other than the claimant, such person shall, at the time of filing the application, or within a reasonable time thereafter, file evidence of his authority to execute the application on behalf of such claimant in accordance with the following rules:

(a) If the person executing the application is the legally appointed guardian, committee, or other legal represensative of such claimant, the evidence shall be a certificate executed by the proper official of the court of appointment.

(b) If the person executing the application is not such a legal representative, the evidence shall be a statement describing his relationship to the claimant and, except where the application is executed by a parent on behalf of a child with whom he is living, the extent to which he has the care of such claimant, or his position as an officer of the institution of which such claimant is an inmate. The Administration may, at any time, require additional evidence to establish the authority of any such person.

[20 F.R. 7538, Oct. 8, 1955; 20 F.R. 7789, Oct. 15, 1955]

§ 404.605

Claimant must be alive when application is filed.

For an application to be effective the claimant must be alive at the time a properly executed application (see 404.603) is filed with the Administration (see § 404.608). (See §404.362 where a person potentially equitably entitled to the lump-sum death payment dies before filing an application. See also § 404.613 relating to the filing of a prescribed application form after submittal of a written statement.)

[29 F.R. 15116, Nov. 10, 1964, as amended at 29 F.R. 15510, Nov. 19, 1964]

for

§ 404.606 Filing of application monthly benefits before the first month for which individual may become entitled to such benefits.

(a) Old-age and survivors insurance benefits. An application for monthly benefits (other than an application for disability insurance benefits) will be accepted as an application for such benefits if it is filed not more than 3 months prior to the first month for which the claimant could become entitled to such benefits. Any such application filed within such 3-month period shall be deemed filed in the first month for which the claimant could be entitled to such benefits.

(b) Disability insurance benefits—(1) Application filed prior to March 1960. An application for disability insurance benefits filed after September 1956 and prior to March 1960 will be accepted as an application for such benefits if it was filed not more than 9 months prior to the first month for which the claimant could become entitled to such benefits and while the claimant was under a disability.

(2) Application filed after February 1960. An application for disability insurance benefits filed after February 1960 will be accepted as an application for such benefits for months no earlier than September 1960 if it is filed not more than 9 months prior to the month for which the claimant could become entitled to such benefits; except that, where clause (ii) of section 223(a)(1) of the act (concerning prior entitlement to disability insurance benefits and/or a prior period of disability) is applicable, an application for disability insurance benefits may not be filed more than 6 months prior to the first month for which the claimant could become entitled to such benefits. An application filed within the 9-month or 6-month period, as the case may be, shall be deemed filed in the first month for which the claimant could be entitled to such benefits, but no earlier than September 1960.

(c) Recomputation of benefits. See §§ 404.261 to 404.268 for application requirements for recomputation of benefits.

(d) Specific dates. Where any of the provisions in this Part 404 become effective on the basis of an application

411

filed on or after a specific date, this section shall apply only if the application is filed on or after that date. [27 F.R. 1164, Feb. 8, 1962]

for

§ 404.607 Filing of application monthly benefits after first month for which individual may become entitled to such benefits.

(a) Old-age and survivors insurance benefits. An application for monthly benefits (except an application for disability insurance benefits) filed at any time after the first month for which the claimant could have been entitled to such benefits (see Subpart D for first month for which a person could become entitled) will be accepted as an application for purposes of entitlement to such benefits beginning with any of the following months:

(1) Six months immediately preceding the month in which the application is filed (but not before the first month for which he could become entitled) if such application is filed after December 1950 and prior to September 1954, except that it cannot be accepted as an application for any month prior to September 1950; or

(2) Twelve months immediately preceding the month in which the application is filed (but not before the first month for which he could become entitled) if such application is filed after August 1954, except that it cannot be accepted as an application for any month prior to February 1954.

For purposes of determining whether the individual has met all conditions of entitlement in such prior months, the application shall have the same effect as though it had been filed in such months.

(b) Disability insurance benefits. An application for disability insurance benefits filed while the claimant was under a disability and at any time after the first month for which he could have become entitled to such benefits, will be accepted as an application for such benefits beginning with 12 months immediately preceding the month in which such application is filed but not before the first month for which he could become entitled, provided he was under a disability in such first month and such disability continued until the time such application was filed. However, it may not be accepted as an application for any month prior to July 1957, the first month for which disability insurance benefits were payable. For purposes of deter

mining whether the individual has met all conditions of entitlement in such prior months, the application shall have the same effect as though it had been filed in such months.

(c) Recomputation of benefits. See §§ 404.261 to 404.268 for application requirements for recomputation of benefits.

(d) Restricting retroactivity. Except where an application is deemed to have been filed under conditions described in § 404.607b, a claimant may limit the number of months for which his application is retroactive. He may exercise this right by an appropriate statement on the application form or on a supplement to it.

[27 F.R. 1164, Feb. 8, 1962; 27 FR. 1417, Feb. 15, 1962]

§ 404.607a Filing of application for the establishment of a period of disability.

(a) Application filed before beginning of period of disability.—(1) Application filed prior to March 1960. An application filed after December 31, 1954, and prior to March 1960 to establish a period of disability will be accepted as an application for such purpose if it was filed while the claimant was under a disability and not more than 3 months before the first day on which a period of disability may begin for the claimant.

(2) Application filed after February 1960. An application filed after February 1960 to establish a period of disability will be accepted as an application for such purpose if it is filed not more than 3 months before the first day on which a period of disability may begin for the claimant; except that, where clause (ii) of section 223(a)(1) of the Act (concerning prior entitlement to disability insurance benefits and/or a prior period of disability) is applicable, an application for such purpose may be filed as early as 6 months prior to the first month for which the claimant becomes entitled to disability insurance benefits. An application filed within such 3-month or 6-month period shall be deemed filed on such first day or in such first month, as the case may be. Where the 6-month period is applicable in connection with clause (ii) of section 223(a) (1) of the Act, the period of disability may begin no earlier than September 1960.

(b) Application filed after beginning of period of disability. Where a claimant

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