Settlement Grants Millions of Dollars in Relief to Supplemental Security Income (SSI) Beneficiaries

For about 70 million Americans who have disabilities, Supplemental Security Income (SSI)–one of two disability benefits programs administered by the Social Security Administration (SSA)—is a crucial lifeline. But it comes with strings attached.

Because SSI is a program designed to assist individuals with little or no income, there are strict income and asset limits. To be eligible for SSI, individuals must have $2,000 or less in savings and other countable resources which can be converted to cash.

The finances of SSI beneficiaries are subject to intense scrutiny by the government, including a requirement to give the government permission to monitor their bank accounts. Much of the work the Social Security Administration does in monitoring bank accounts is done by hand.

During the COVID-19 pandemic, many SSI beneficiaries were unable to withdraw funds from their bank accounts due to health concerns and COVID stay-at-home rules. The result was that many of them accumulated money in their accounts above the SSI caps.

Further, in March 2020 the SSA closed many of its field offices due to the pandemic and halted asset monitoring. By the time the SSA resumed monitoring, many people’s accounts had grown even larger, and the agency demanded repayment (as Nash Disability Law firm reported in our newsletter last month). In some cases, the SSA ruled that the SSI recipients no longer qualified for SSI and cut off their benefits.

Now millions of the SSI recipients who had their benefits reduced or discontinued are eligible for millions in overpayment waivers and other relief because of a settlement approved by the United States District Court for the Eastern District of New York.

The court’s ruling was the outcome of a nationwide class action lawsuit filed by New York Legal Assistance Group and Justice in Aging.

Under the terms of the court’s decision, without having to take any action, about 250,000 SSI recipients will automatically get back benefits, credited to their accounts. An additional nearly two million more SSI beneficiaries will get relief because the ruling clarifies how they can request overpayments to be forgiven.

“This landmark settlement agreement is important recognition of the tremendous hardship SSI recipients faced during the early days of the pandemic, and in managing COVID throughout the public health emergency,” said Regan Bailey, litigation director at Justice in Aging

“Overpayments incurred during this time should be reviewed in context—with SSA offices closed, many government offices closed—it was virtually impossible to conduct business with the agency.”