20 C.F.R. § 725.540 – Overpayments.

(a) General. As used in this subpart, the term “overpayment” includes:
1. (1) Payment where no amount is payable under this part;
2. (2) Payment in excess of the amount payable under this part;
3. (3) A payment under this part which has not been reduced by the amounts required by the Act (see § 725.533);
4. (4) A payment under this part made to a resident of a State whose residents are not entitled to benefits (see §§ 725.402 and 725.403);
5. (5) Payment resulting from failure to terminate benefits to an individual no longer entitled thereto;
6. (6) Duplicate benefits paid to a claimant on account of concurrent eligibility under this part and parts 410 or 727 (see § 725.4(d)) of this title or as provided in § 725.309.
(b) Overpaid beneficiary is living. If the beneficiary to whom an overpayment was made is living at the time of a determination of such overpayment, is entitled to benefits at the time of the overpayment, or at any time thereafter becomes so entitled, no benefit for any month is payable to such individual, except as provided in paragraph (c) of this section, until an amount equal to the amount of the overpayment has been withheld or refunded.
(c) Adjustment by withholding part of a monthly benefit. Adjustment under paragraph (b) of this section may be effected by withholding a part of the monthly benefit payable to a beneficiary where it is determined that:
1. (1) Withholding the full amount each month would deprive the beneficiary of income required for ordinary and necessary living expenses;
2. (2) The overpayment was not caused by the beneficiary's intentionally false statement or representation, or willful concealment of, or deliberate failure to furnish, material information; and
3. (3) Recoupment can be effected in an amount of not less than $ 10 a month and at a rate which would not unreasonably extend the period of adjustment.
(d) Overpaid beneficiary dies before adjustment. If an overpaid beneficiary dies before adjustment is completed under the provisions of paragraph (b) of this section, recovery of the overpayment shall be effected through repayment by the estate of the deceased overpaid beneficiary, or by withholding of amounts due the estate of such deceased beneficiary, or both.