met the requirements for obtaining a waiver.
After this action was filed, SSA requested a voluntary remand of the case to recompute Ms. Luna's benefits. On remand SSA decided that her benefits should not have been withheld to repay overpayments made solely to Mr. Lugo. However, a portion of the benefits due to her for the period from October of 1978 to December 1980, in the amount of $215.90, was still withheld to repay an earlier overpayment, incurred in the third quarter of 1978.
C. Edward Pickels
Edward Pickels is a recipient of SSI benefits under Title XVI of the Social Security Act. These benefits are paid to his mother, Sarah Pickels, as his representative payee. For the past several years Edward Pickels has been a student at the Cardinal Krol Center ("C-K Center"), a branch of the Don Guanella School in Springfield, Pennsylvania. In early 1981 that facility was deemed to be retroactively eligible to receive medical assistance for its students. In June, 1981, this fact was communicated to SSA. Since students at facilities receiving medical assistance are not eligible for full SSI benefits, it was determined by the Secretary that Edward Pickels had been overpaid in the amount of $3,489 for the period beginning July, 1980 and ending in August, 1981. In November, 1981, Sarah Pickels was notified that Edward's SSI benefits would be lowered and the Secretary began recouping the overpayment from Pickels' remaining benefits.
Sarah Pickels appealed the decision that there was an overpayment and, in the alternative, requested waiver of recoupment of the overpayment. In a post-hearing decision, dated November 29, 1982, an administrative law judge ("ALJ") determined that, due to the change in the medical assistance status of the C-K Center, Edward Pickels was entitled only to reduced benefits. During the months of June, July, August and September of both 1981 and 1982, however, there were sufficiently long periods of absence from the C-K Center to entitle Pickels to full benefits. The ALJ recalculated the amount of overpayment by subtracting the amounts Pickels was underpaid in September, 1981 and June -- September, 1982 (when full benefits were due, but only partial benefits were paid) from the amount that was overpaid in the period July, 1980 through May, 1981. The ALJ then ruled that recovery of this "adjusted overpayment" should be waived, since the requirements for waiver had been met in Mr. Pickels' case.
The ALJ's decision thus denied any opportunity for a waiver of the overpayment that occurred from July, 1980 to August, 1981 by repaying that money to SSA through an offset against benefits due in September, 1981 and June through September, 1982. Had those latter benefits not been wrongfully denied by SSA when they were originally due, Edward Pickels would have been given notice and an opportunity for a hearing on whether recoupment out of those benefits should have been waived.
On January 28, 1983, Sarah Pickels sought intervention as a named plaintiff in this action on behalf of Edward Pickels. Several months later, after that entry into this lawsuit, the Secretary determined that the ALJ did not follow SSA regulations in Pickels' case. According to the Secretary, the ALJ erroneously recouped the overpayment from benefits owed to Pickels outside the overpayment period. Subsequently, SSA issued a lump sum check to Pickels, thereby retroactively paying the amount to which plaintiff Pickels was entitled.
D. Edward F. Terebieniec
Edward F. Terebieniec is a recipient of SSDI benefits pursuant to Title II of the Act. Plaintiff Terebieniec was found to be eligible for social security benefits due to a disability effective from June 20, 1978. By notice dated September 8, 1981, Mr. Terebieniec was notified that his benefits would be suspended effective October 1980, due to the passage of section 223(f) of the Act, 42 U.S.C. § 423(f) (1981), requiring suspension of the payment of disability benefits to any person confined in a jail as a result of a conviction of a felony. Section 223(f), enacted in 1981,
was made effective retroactive to October 1980. Because of the retroactive application of the law, Edward Terebieniec was overpaid in the amount of $966.90, representing benefits he received from October 1980 through February 1981.
On November 22, 1982, plaintiff Terebieniec was informed that he had been underpaid certain social security benefits based on a recomputation of his earnings effective December 1978. This notice indicated that the underpayment occurred during the period beginning December 1978 and ending September 1982. The underpayment totaled $126.30. Plaintiff Terebieniec was notified that his outstanding overpayment had been adjusted by the amount of the underpayment and that an "adjusted" overpayment balance of $840.60 remained. No notice or hearing on a possibility of waiving the overpayment was offered or given prior to this offset.
Plaintiff Terebieniec filed a request for reconsideration on December 21, 1982, objecting to the adjustment of the underpayment by the overpayment. This request was denied. However, SSA later found that he met all of the requirements for a waiver of overpayment and waived the "adjusted" overpayment by a notice dated April 17, 1983.
On January 28, 1983, Mr. Terebieniec moved to intervene as a named plaintiff in this action. Shortly thereafter he also requested a hearing on his case before an ALJ. On December 14, 1983, after his intervention as a named plaintiff in this action was allowed and after certification of the plaintiff class herein was granted, the ALJ issued a decision sustaining Mr. Terebieniec's position on the basis of the arguments raised by all of the plaintiffs in this case. Because the Secretary views the ALJ's decision in Terebieniec's case to be in conflict with her regulations and policy, Terebieniec has not received the funds due to him.
ORDER - December 28, 1984, Filed
AND NOW, this 28th day of December, 1984, upon consideration of the cross-motions for summary judgment in this case, and for the reasons set forth in the accompanying memorandum, IT IS ORDERED that:
1. Plaintiffs' motion for summary judgment is GRANTED.
2. Defendant's motion for summary judgment is DENIED.
3. The Secretary is ENJOINED from using the automatic adjustment procedure set forth in 20 C.F.R. § 416.538 (1984).
4. The Secretary provide the opportunity for a waiver determination hearing as required by §§ 204(b) and 1631(b)(1) of the Social Security Act, 42 U.S.C. §§ 404(b) and 1383(b)(1) before recouping any amount of an overpayment of social security or SSI benefits by any means.
5. The Secretary pay to all class members, including named plaintiffs Lugo, Luna and Terebieniec, the amount of their underpayments that was illegally withheld by the Secretary pursuant to 20 C.F.R. § 416.538.
6. The Secretary determine the persons and the amounts required to be paid by this order, and make such payments within ninety (90) days of the date of this order.