We will waive adjustment or recovery of an overpayment when an individual on whose behalf waiver is being considered is without fault (as defined in § 416.552) and adjustment or recovery of the overpayment would defeat the purpose of the supplemental security income program.

1. (a) General rule. We consider adjustment or recovery of an overpayment to defeat the purpose of the supplemental security income (SSI) program if the individual's income and resources are needed for ordinary and necessary living expenses under the criteria set out in § 404.508(a) of this chapter

2. (b) Alternative criteria for individuals currently eligible for SSI benefits. We consider an individual or couple currently eligible for SSI benefits to have met the test in paragraph (a) of this section if the individual's or couple's current monthly income (that is, the income upon which the individual's or couple's eligibility for the current month is determined) does not exceed—

   1. (1) The applicable Federal monthly benefit rate for the month in which the determination of waiver is made (see subpart D of this part); plus
   2. (2) The $20 monthly general income exclusion described in §§ 416.1112(c)(3) and 416.1124(c)(10); plus
   3. (3) The monthly earned income exclusion described in § 416.1112(c)(4); plus

   4. (4) The applicable State supplementary payment, if any (see subpart T of this part) for the month in which determination of waiver is made.

      For those SSI recipients whose income exceeds these criteria, we follow the general rule in paragraph (a) of this section.

[45 FR 72649, Nov. 3, 1980, as amended at 50 FR 48573, Nov. 26, 1985]