20 C.F.R. § 416.543
We apply any underpayment due an individual to reduce any overpayment to that individual that we determine to exist (see § 416.558 ) for a different period, unless we have waived recovery of the overpayment under the provisions of §§ 416.550 through 416.556 . Similarly, when an underpaid recipient dies, we first apply any amounts due the deceased recipient that would be payable to a survivor under § 416.542(b) against any overpayment to the survivor unless we have waived recovery of such overpayment under the provisions of §§ 416.550 through 416.556 .
Example: A disabled child, eligible for payments under title XVI, and his parent, also an eligible individual receiving payments under title XVI, were living together. The disabled child dies at a time when he was underpaid $100. The deceased child's underpaid benefit is payable to the surviving parent. However, since the parent must repay an SSI overpayment of $225 on his own record, the $100 underpayment will be applied to reduce the parent's own overpayment to $125.
20 C.F.R. §416.543