Califano v. Yamasaki

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Relevant Law

  • Social Security Act 204(a)(1): Overpayment of benefits can be recouped by deducting from future payments
  • Social Security Act 204(b): This recouping cannot be done if the Secretary finds that the recipient is not at fault or it would defeat the purpose of the act or is against good equity or good conscience.

Current way law is implemented

  • "without fault": the recipient did not know or should not have known of the overpayment
  • "defeat the purpose": "deprive the person of income required for ordinary and necessary living expenses."
  • "against good equity of good conscience" = "relinquish a valuable right ... or changed position for the worse."

If overpayment is determined, the recipient has two options:

  1. contest the accuracy of this determination
  2. ask for forgiveness under 204(b)

At first the recipient can only object in writing. If this objection is rejected, recoupment starts. If there are continued objections, the recipient can object orally to someone who can decide the case. This hearing is a on the record de novo hearing. This decision can be appealed to the Appeals council and federal court.

Discussion

This court first says that it is unnecessary to see if the constitution requires more procedure because an answer can just be given by reading the statute. In this case the court differentiates between recipient objections that are based on section 204(a)(1) and section 204(b). In the former, the inquiry is primarily factual and there is a low chance of error. However in the latter, it would be hard to determine what was good equity or good conscience are without looking at all the circumstances (including things like credibility) surrounding the recipient. To be able to look at all circumstances an agency needs more than just a written submission by the recipient. The court points to the the rate at which the Secretary's original decisions (which were based on written evidence) were reversed after the recipient held personal conference with the agency.