Consult an experienced Social Security Disability Lawyer.
Daviau v. Astrue concerns an action filed by Plaintiff Catherine Daviau, who received Social Security Disability Insurance (SSDI) benefits from 1988 to March 1996 and again from October 1996 until 2004. In August 2004, the Social Security Administration (SSA) notified Plaintiff that it was immediately ceasing her benefits payments. Specifically, the SSA indicated that it had continued to pay Plaintiff benefits during a trial work period (TWP) - beneficiaries can work for a nine month period within a 60-month span without losing benefits; currently, the TWP automatically begins in any month in which the person's earnings exceed $720 - as well as an extended period of eligibility (EPE), during which the SSA pays benefits to a person whose TWP has expired for every month during a 36-month span in which the person earns below a certain threshold amount ($1,010 in 2012).
The SSA further informed Plaintiff that, according to its calculations, the government should have stopped paying her benefits in April 2002. However, the SSA continued to pay Plaintiff monthly benefits until August 2004, resulting in an overpayment of more than $17,000, which the agency was now seeking to collect. Roughly four months later, the SSA denied Plaintiffs request to waive collection of the alleged overpayment. Following an in-person conference with SSA staff, her waiver request was again denied.
The matter than went before an SSA Administrative Law Judge (ALJ) in an administrative hearing at which Plaintiff appeared without a Social Security disability lawyer. The ALJ found that Plaintiff was "not without fault" in the overpayment and therefore not entitled to waiver.
On appeal, however, the District Court for the Northern District of New York found that the ALJ's decision was not supported by substantial evidence. In order to successfully seek waiver of a benefits overpayment, a person must show that: 1) the overpayment was not his or her fault; and 2) paying it back would cause the person financial hardship or be unfair for some other reason. In determining the benefits recipient's fault, the SSA or a reviewing judge should consider any false statements, failure to provide material information or acceptance of a payment that the recipient knew or should have known was incorrect.
In this case, according to the court, Plaintiff reasonably relied on information from SSA staff indicating that she remained eligible for benefits, despite her work activity. SSA regulations provide that "[w]here an individual . . . accepts [an] overpayment because of reliance on erroneous information from an official source within the Social Security Administration . . . with respect to the interpretation of a pertinent provision of the Social Security Act or regulations pertaining thereto,. . . such individual, in accepting such overpayment, will be deemed to be `without fault'".
Plaintiff stated both in her waiver request and at the administrative hearing that she was in regular communication with the SSA in person as well as via phone and letter and that during these conversations SSA staff "stated that they will let me know when I am no longer entitled to benefits." Plaintiff further stated that when the SSA finally told her she was not entitled to benefits, it also told her that she was overpaid, yet still continued putting checks in her account. As the ALJ made no determination regarding Plaintiff's credibility on this matter, there was no support for ignoring her statements, the court ruled. As a result, the court reversed the ALJ's decision and remanded the case for further proceedings.
The court's ruling does not necessarily mean that Plaintiff will be given a waiver, only that the case goes back to the ALJ. A person facing an overpayment action by the SSA should consult an experienced disability attorney who understands the laws and regulations concerning overpayment and can assist in filing a waiver request and appeal, if necessary.
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