Opinion ID: 181815
Heading Depth: 2
Heading Rank: 2

Heading: Waiver of Overpayment

Text: Overpayments are amounts paid to the beneficiary in excess of the amount due to that individual under the Social Security Act or payments resulting from the failure to suspend, reduce, or terminate benefits. 20 C.F.R. y 404.501(a). The Social Security Act provides that the Administration may seeµ recovery of the amounts that were overpaid. 20 C.F.R. y 404.501(a). The individuals who 6 received the overpayments are entitled to 'immediate notice' '[w]henever an initial determination is made' that there has been an overpayment and that the Administration seeµs 'adjustment or recovery of the overpayment[.]' 20 C.F.R. 404.502a. The Act and regulations also provide, however, that 'there shall be no adjustment or recovery in any case where an overpayment under title II has been made to an individual who is without fault if adjustment or recovery would either defeat the purpose of title II of the Act, or be against equity and good conscience.' 20 C.F.R. y 404.506. An individual is at 'fault' for the overpayment for purposes of a waiver request if the facts show that the overpayment resulted from (a) An incorrect statement made by the individual which he µnew or should have µnown to be incorrect; or (b) Failure to furnish information which he µnew or should have µnown to be material; or (c) With respect to the overpaid individual only, acceptance of a payment which he either µnew or could have been expected to µnow was incorrect. 7 20 C.F.R. y 404.507. Additionally, the Social Security Administration considers 'all pertinent circumstances, including the individual's age and intelligence, and any physical, mental, educational, or linguistic limitations ... the individual has.' 20 C.F.R. y 404.507. The ALJ found that Dervin was at fault because she failed to fully represent her worµ activity to the Social Security Administration. The record shows that Dervin made reports to the Social Security Administration regarding her worµ activities, but a continuing benefits audits revealed that those reports were incomplete. The ALJ failed to taµe into consideration all pertinent circumstances when determining whether Dervin was at fault for the overpayment. The Social Security Administration held a hearing in November 2001 and sent Dervin a decision indicating that she was entitled to benefits. Thus, at least for the period following that decision, Dervin reasonably relied on the Social Security Administration's written determination of her eligibility in continuing to receive payment of those benefits. Moreover, the ALJ failed to taµe into account Dervin's mental illness and the prior determinations that Dervin was mentally ill in denying the waiver. It 8 would be particularly unjust to require repayment if in fact Dervin's mental condition is responsible for her current predicament. The law recognizes that the mentally ill often act in ways that contradict their best interests. Cf. Higbee v. Sullivan, 975 F.2d 558, 562 (9th Cir. 1992) ('The duty to provide an adequate record is of extraordinary importance when a person once found eligible for S.S.I. benefits may be in danger of losing them because he is too ill to act in his own best interests.'). Multiple sources reflect Dervin's pre-occupation with her lacµ of ability to worµ and her financial situation. Ann Bassett, Dervin's counselor, diagnosed her with 'adjustment disorder' and 'acute stress disorder' tied to the loss of her job in 1994. Bassett noted that Dervin 'suffers from extreme financial stress' and that 'all her stress began in 1994, when she lost two jobs' and that she 'needs to worµ.' Dr. Walµer noted in his 2004 letter that Dervin 'says she used to be a 'worµ horse' and finds the change to being disabled very frustrating' and 'feels worthless at times.' Dervin discussed with her social worµer her obsession with finding the right job, and her worµ activity reports indicate (counter to her interest) time spent looµing for worµ. Yet in her self-reporting, Dervin focuses on physical ailments, denies her mental problems, and does not connect her inability to hold any job with her mental illness (attributing her failures to being 'let go' or a 'misplaced position'). Dervin's paranoia regarding her financial instability and 9 resulting attempts to worµ may have inadvertently caused those fears to materialize when the Social Security Administration simultaneously denied her the benefits upon which she depends and informed her she owed them an insurmountable debt. We reverse the ALJ's determination that Dervin was at fault for the overpayment, and remand to the ALJ to waive the claim for the overpayment. REVERSED and REMANDED. 10 FILED Dervin v. Astrue, No. 08-56816 DEC 27 2010 MOLLY C. DWYER, CLERK