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November 17, 1983

Dorothy ELLENDER, Angela Zamski, James Trowbridge, Lois W. Brunjes, and Verly Smith, individually and on behalf of all others similarly situated, Plaintiffs,
Richard S. SCHWEIKER, Margaret M. Heckler, as Secretary of the Department of Health and Human Services, John Svahn, and Martha McSteen, individually and as Commissioner of the Social Security Administration, Defendants.

The opinion of the court was delivered by: COOPER

IRVING BEN COOPER, District Judge.

Plaintiffs seek an order for partial summary judgment, pursuant to Rule 57 of the Federal Rules of Civil Procedure, granting declaratory and injunctive relief against defendants' policies and procedures for collecting plaintiffs' alleged debts under the Supplemental Secuirty Income (SSI) program by deductions from benefits due them under the Old Age, Survivors and Disability (OASDI) program. Additionally, plaintiffs seek an order, pursuant to Rule 249a)(2) or 24(b)(2), to permit Jessie Savage to intervene as a plaintiff in this action. Defendants have cross-moved, pursuant to Rule 56 of the Federal Rules of Civil Procedure, for summary judgment dismissing the complaint.

I. The Facts

 The facts of the case are generally not in dispute and have been set forth in our previous opinion granting plaintiffs' motion for class certification, intervention, and a preliminary injunction. See Ellender v. Schweiker, 550 F. Supp. 1348 (S.D.N.Y. 1982). To better understand our decision which follows, however, we believe appropriate a brief reiteration of the facts leading up to the necessity of this litigation. As we set forth in our previous opinion,

 The SSI program is a federally-funded public assistance program established under Title XVI of the Social Security Act. It provides minimum subsistence benefits to persons under 65 who are blind or disabled and whose other incomes and resources fall below a prescribed level set by statute.

 The [OASDI] program, established under Title II of the Social Security Act, is an insurance program which provides retirement, disability and survivor benefits to former wage earners who have contributed to the program for a sufficient number of calendar quarters. Once an eligible wage earner can no longer work due to age, disability, or death, funds are paid to him or his survivors from the OASDI "trust fund" administered by the Social Security Administration.

 Even though both programs are under the auspices of the Social Security Administration, they are separate and distinct, and exist pursuant to different statutory authority. They have different eligibility requirements and were designed to serve entirely separate groups. SSI is a needs-based program funded from general revenues. OASDI payments, funded through a trust fund, are based on contributions of the wage earner, number of working years and age of retirement. Aged, blind or disabled OASDI recipients may be entitled to receive SSI payments in addition provided they meet the prerequisites of that program.

 For reasons which remain largely unexplained, between January, 1974 and December, 1975 the Social Security Administration overpaid SSI recipients, including plaintiffs in the instant action. The only explanation for these overpayments in the record before us is that in one instance they resulted from "computer error." . . . The total amount of SSI overpayments nationwide was approximately $1 billion as of December 31, 1981.

 Id. at 1350-51.

 All of the plaintiffs are current recipients of OASDI benefits under Title II of the Social Security Act, 42 U.S.C. § 401 et seq. In addition, all of the plaintiffs were past recipients of benefits based on old age or disability under the SSI program established by Title XVI of the Social Security Act, 42 U.S.C. § 1381 et seq. According to the Social Security Administration (SSA) records, each plaintiff was overpaid by the SSI program and has not fully repaid such overpayment.

 Defendants have devised a special program, known as the Backlogged Debt Management Project (BDMP), for the purpose of collecting from OASDI recipients any overpayments made while they were receiving SSI. More specifically, the BDMP was designed to resolve by collection, waiver or write-off 412,683 SSI overpayment cases in a "deferred" or "delinquent" status, with an approximate value of $214 million. Unlike other SSI beneficiaries who had received overpayments (non-BDMPs), the BDMP group never received any notice advising them of the reason for overpayment or the time period of overpayment.

 The BDMP utilizes standardized notices that are sent via mail in an attempt to seek reimbursement and eventual collection of overpaid funds. The initial notice which was not received by all of the class members, the "Supplemental Security Income Notice of Overpayment Action," requests repayment of any overpayments, permits the recipient to authorize withholding of OASDI benefits to repay SSI overpayment, and recites the rights of the recipient to waiver and appeal. The second notice, Supplemental Security Income Notice of Action to Recover Overpayment [hereinafter "For Your Convenience" notice], which for many beneficiaries was the first one received, merely read:


 FROM: Department of Health and Human Services Social Security Administration

 333 Avenue X Brooklyn, NY 11223

 Date: April 19, 1982

 Social Security Number:

 There is an outstanding $1954.86 balance on your supplemental security income overpayment due to the Social Security Administration.

 Please refund the $1954.86 immediately. Make your check or money order payable to the Social Security Administration, social security number, and mail it in the enclosed envelope.

 If you cannot make full refund at this time, please refund as much as you can and contact us to arrange for refunding the balance. For your convenience, we can withhold the balance of your overpayment from your social security benefit.

 If you would like to use this method of repaying your overpayment, please sign the attached statement and return it to us in the enclosed envelope.

 If you wish to discuss a different method of repaying the overpayment, call, write or come into this office.





 For my convenience, please withhold my full social security benefit each month until my supplemental security income (SSI) overpayment of is fully recovered.



 If these notices do not cause the recipient to reimburse the government, subsequent notices are sent. The government's guidelines also provide for telephone and personal contact with the individual to resolve the overpayment.

 Although we have emphasized the plight of the class members whose daily lives have been severely affected by the Government's Backlogged Debt Management Project, we are compelled to repeat some of the problems they face:

 Dorothy Ellender is a 75 year old widow whose sole present income is a monthly OASDI check for $413.90. She also received benefits under the SSI program between January, 1974 and December 5, 1975 at the monthly rate of $161.85. On October 5, 1978 Mrs. Ellender received a form from the Social Security Administration informing her that she had received a $4,264.95 SSI overpayment during that period. Even though this form advised her that she had a right to appeal the determination of the overpayment or seek a ...

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