Government Settles Thousands of Claims Involving SSD Payment Denials

A judge tentatively approved a settlement Tuesday(August 11, 2009) to repay 80,000 Social Security recipients more than $500 million that the federal government lopped from their benefits, thanks to an anti-fugitive program that went haywire. The problem arose from a law denying Social Security benefits to anyone fleeing from prosecution for a felony or who had been convicted and was on the run. To enforce it, the SSA ordered its staff to withhold mony from anyone who was named in an arrest warrant for any state or federal felony. read article: www.sfgate.com/cgi-bin/article.cgi

The result, according to lawyers for plaintiffs in a class-action suit, was the cutoff of payments to tens of thousands of people who never fled prosecution. Most were unaware of the warrants, and some hadn’t even been charged with crimes, the lawyers said.

Several courts declared the policy illegal, and the agency revoked it as part of the settlement April 1. It now withholds benefits only for people charged with fleeing to avoid prosecution or escape custody.

"This settlement is important for thousands of the most vulnerable members of our society, aged and disabled people whose life support was cut off," said Gerald McIntyre, an attorney with the National Senior Citizens Law Center in Los Angeles.

U.S. District Judge Claudia Wilken of Oakland scheduled a hearing Sept. 24 to hear any objections to the settlement before ruling on final approval.

The lead plaintiff, Rosa Martinez, 52, of Redwood City, is a disabled woman whose federal benefits, her sole source of income, were suspended in January 2008 and restored nine months later after she went to court.

She said the Social Security Administration had told her she was named in a 1980 warrant for drugs in Miami – even though she had never been to Miami, never used illegal drugs and was 8 inches shorter than the Rosa Martinez described in the warrant. She said the agency would not let her appeal the cutoff and told her it would restore the benefits only after she cleared up the warrant.

Another plaintiff, Roberta Dobbs, a 76-year-old Oklahoma woman with a terminal lung disease, lost her benefits for three years starting in 2006 because of a 2001 drunken driving warrant that she was unaware of and was dropped when she questioned it, her lawyers said. In the meantime, she couldn’t afford to replace a broken furnace and had to use a space heater with an open flame.

The settlement requires the Social Security Administration to reimburse the 80,000 recipients whose benefits were withheld between 2007 and this April, when it changed its policy.

At least an additional 120,000 people who lost benefits between 2000 and 2006, and haven’t gotten them back because they never cleared up their warrants, will be eligible to have their aid restored as of April 2009, McIntyre said.