Class Action Claims SSI Recipients Harmed by Closure of SSA Field Offices During Pandemic, ‘Overpayment’ Waiver Rule

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A proposed class action alleges thousands of very low income older adults and individuals with disabilities who receive supplemental security income have been harmed by both the Social Security Administration’s (SSA) closure of field offices during the COVID-19 pandemic and a rule designed to ease the burden on both the agency and those considered to have been “overpaid” benefits during some months.

The 59-page lawsuit, filed in New York against Acting Commissioner of Social Security Kilolo Kijakazi, alleges the closure of the SSA’s field offices has prevented many supplemental security income (SSI) recipients from reporting financial changes to the agency, and thus caused them to be considered “overpaid” during some months. Per the suit, the individuals’ monthly benefits were then unfairly reduced in subsequent months until their alleged debts to the SSA were paid back. The case claims SSI recipients have had their benefits wrongfully cut at an especially devastating time.

“These individuals are elderly or disabled (or both), and live in deep poverty,” the case states. “They depend on SSI to meet their basic requirements for shelter, food, and clothing.” 

The lawsuit moreover alleges an August 2020 SSA interim final rule pertaining to the waiver of certain overpayments, a measure passed ostensibly in recognition of the “severe and unfair harm” experienced by SSI recipients as the agency was weighed down administratively, is “arbitrary and capricious,” and falls well short of providing the intended relief to SSI recipients. 

According to the filing, the closure of the SSA’s field offices has severely impacted the ability of SSI recipients to report to the agency certain information critical to maintaining their eligibility for benefits. Specifically, SSI recipients have had difficulty demonstrating to the SSA their strict income and resource limits each month, and with promptly reporting any changes to their finances, the lawsuit says. Failure to do so could result in the SSA recouping benefits that the agency believes have been “overpaid” in recent months, i.e., paid to recipients during periods in which they were ineligible, the suit stresses. 

Prior to the pandemic, millions of SSI recipients regularly reported changes to their finances in person at SSA local field offices, the complaint relays. The lawsuit contends that since that option has been foreclosed by the SSA since the onset of the pandemic, many SSI recipients have instead been required to report financial changes by phone, fax or mail. This has been problematic for a number of SSI recipients, according to the case: 

“Many have not been able to do so. These recipients—who are disabled, elderly, or both—are at high risk for serious consequences from COVID-19, which limits their ability to venture into their communities to secure needed documentation, go to the post office or send faxes to SSA.” 

Even for SSI recipients with the ability to report financial changes to the SSA amid the pandemic, the agency has often fallen many months behind on processing the updated information, the suit claims. As a result, the SSA, when it later identifies that an SSI recipient was “overpaid” during any span of months, attempts to recoup the money going forward, causing a reduction in an individual’s monthly benefits, the case says.

Recognizing that SSI recipients were often not at fault for the overpayments given the SSA’s reduction of operations, the agency issued in August 2020 an interim final rule as a means to provide relief to SSI recipients and reduce the administrative burden on the agency. Per the case, the rule was intended to provide for streamlined, no-fault waivers of the SSA’s right to recover overpayment debt from certain SSI recipients during the pandemic. The lawsuit alleges however, that the rule, as drafted, is plagued by administrative failures, and fails to provide the intended relief to SSI recipients. 

“It is deeply flawed in scope; its implementation has been flawed; and the notices sent by the SSA to potentially affected recipients were also flawed,” the case argues.

More specifically, the interim final rule, according to the complaint, contains “numerous arbitrary limitations” on when an SSI recipient qualifies for the SSA’s streamlined waiver. For example, the case explains, an overpayment must have occurred before September 30, 2020; the SSA must have identified it by December 31, 2020; and the overpayment must have been handled a certain way by the SSA’s internal systems. Moreover, the suit says the SSA failed to inform recipients of the new policy, which the lawsuit contends places the burden of learning about the waiver process and requesting such on the recipient.

In September 2020, the SSA “resumed some workloads” and began again to assess overpayments, which reduced many recipients’ benefits while all of the agency’s field offices remained closed due to the COVID-19 emergency, the lawsuit says. 

“The arbitrary limitations on the [interim final rule’s] applicability have resulted in many SSI recipients being assessed overpayments and thus experiencing unfair and improper benefit reductions, causing substantial harm,” the case contends, alleging the SSA’s conduct has run afoul of the Social Security Act, the Administrative Procedure Act and the Fifth Amendment of the United States Constitution. 

The lawsuit looks to represent all current and future supplemental security income recipients who have been or will be assessed an overpayment debt incurred at any point between March 2020 and the end of the COVID-19 national emergency.

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