Court Opinion

ID: 8936185
Source: CourtListenerOpinion
Date Created: 2022-11-27 07:31:07.150403+00
Date Added: 2024-06-11T17:09:37.695862
License: Public Domain

OPINION OF THE COURT
ADAMS, Circuit Judge.
This class action involves a challenge to certain regulations employed by the Social
*1145Security Administration (SSA) when it determines that incorrect sums of money were disbursed to beneficiaries. The challenged regulations provide that where SSA ascertains that a beneficiary was both underpaid and overpaid at various times in the past, the agency may “net” the amounts to determine a single adjusted overpayment or underpayment. Plaintiffs argue that this procedure undercuts the rule of Califano v. Yamasaki, 442 U.S. 682, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979). Yamasaki held that the Social Security Act entitles a recipient to a hearing before SSA may recover an overpayment, to decide whether the recovery should be waived in the interest of equity and good conscience. Plaintiffs insist that the netting practice, by offsetting overpayments with underpayments owed to the beneficiaries, forecloses their opportunity to seek waiver of each monthly overpayment.
The district court agreed with the plaintiffs, and held that the Secretary’s netting regulations are inconsistent with the Act and therefore impermissible; it ordered expansive class relief. However, given the broad discretion confided to the Secretary to promulgate regulations, we disagree, and will direct that the district court’s award of summary judgment to the plaintiffs be vacated and that summary judgment be entered in favor of the defendant.
I.
The impact of the netting regulations on the members of the plaintiff class may be demonstrated by the facts presented by the original plaintiff, Angel Lugo. Lugo became eligible for Supplemental Security Income (SSI) benefits on January 1, 1974; in 1977, the Secretary determined that he was no longer disabled and terminated his benefits. Following a series of appeals, the Secretary found on August 17, 1980, that Lugo actually had been eligible for SSI benefits since November 17, 1976. The underpayment owed Lugo for the 1977-1980 period was calculated at $2,798.70. At the same time, however, SSA calculated that he was overpaid $6,100.60 from 1974 to 1976.
Pursuant to 20 C.F.R. § 416.538 (1981), the Secretary deducted the amount underpaid from the amount overpaid and informed Lugo that he had received an adjusted overpayment of $3,301.90. The Secretary further decided, in accordance with 42 U.S.C. § 1383(b)(1)(A) (1976), that Lugo was without fault in receiving these excess funds and that recovery by the government against him would be inequitable. Accordingly, the $3,301.90 overpayment that had been made to Lugo was waived.
On July 13, 1981, Lugo filed a request that SSA waive repayment of the entire $6,100.60 overpayment. He also asked the agency to repay him immediately the $2,798.70 he had been underpaid. SSA denied these requests, in a Notice of Reconsideration mailed on August 19, 1981.
Lugo then instituted this civil action on September 21, 1981.1 The district court later permitted other plaintiffs to intervene. All of the claims involved past over-payments and underpayments which resulted in a net overpayment to each of the claimants. The district court also permitted the named plaintiffs to represent a class consisting of all persons who:
(1) have been, are, or will be served by the Philadelphia regional office of the United States Department of Health and Human Services;
(2) have been or will be determined eligible for social security or SSI benefits;
(3) have been or will be entitled to payment of benefits due for prior months;
(4) have had or will have all or part of retroactive benefits withheld from prompt payment or adjusted by defend*1146ant in order to recoup previous overpayment of benefits without receiving notice and an opportunity for a hearing on the issue of waiver of said recoupment or adjustment prior to such withholding or adjusting by defendant; and, (5) have made or will make a claim to defendant requesting the release of benefits withheld or adjusted. The class includes all persons who received notice of the adjusted/recouped amount of benefits within the four years prior to September 21, 1981, the date this action was commenced. The class does not include any person as to whom a court has already rendered a decision on the issues presented in this case.
Lugo v. Schweiker, 599 F.Supp. 948, 950-51 (E.D.Pa.1984). The Philadelphia regional office serves recipients in Delaware, Maryland, Pennsylvania, Virginia, West Virginia, and the District of Columbia, overseeing the cases of approximately 10% of the nation’s 39,000,000 Social Security beneficiaries.
Lugo’s amended complaint asserted that the Secretary’s netting regulations are at odds with legislative authority, and also violate due process. The district court accepted the statutory argument, and granted the plaintiffs’ motion for summary judgment. Further, the district court enjoined the Secretary from employing the netting procedure in the Philadelphia regional office, ordered the Secretary to provide a hearing before recoupment of Social Security or SSI overpayments by any means, and directed the Secretary to disburse to all class members the amount of withheld underpayments regardless of any over-payments. Lugo, 599 F.Supp. at 952-53.
The Secretary filed a timely appeal, and on May 7, 1985, a panel of this Court entered a stay of the district court’s judgment pending appeal.
II.
Plaintiffs invoked the district court’s jurisdiction under the judicial review provisions of the Social Security Act, 42 U.S.C. §§ 405(g), 1383(c)(3) (1982), as well as the district court’s mandamus jurisdiction, 28 U.S.C. § 1361 (1982). The Secretary challenges this assertion of jurisdiction with respect to members of the class who failed to file timely administrative and civil actions in their individual cases, arguing that § 405(g) requires such procedures as a prerequisite to judicial review. See also Yamasaki, 442 U.S. at 701, 99 S.Ct. at 2557. The Secretary also disputes the district court’s mandamus jurisdiction, but without explanation of her reasoning.
Given our disposition of the merits, we need not address the factors a court must consider in assessing the appropriateness of district court jurisdiction over particular class members in Social Security litigation. Cf. Heckler v. Ringer, 466 U.S. 602, 104 S.Ct. 2013, 80 L.Ed.2d 622 (1984); Mathews v. Eldridge, 424 U.S. 319, 326-32, 96 S.Ct. 893, 898-901, 47 L.Ed.2d 18 (1976); Weinberger v. Salfi, 422 U.S. 749, 756-67, 95 S.Ct. 2457, 2462-67, 45 L.Ed.2d 522 (1975); Liberty Alliance of the Blind v. Califano, 568 F.2d 333, 343-47 (3d Cir.1977).2 For the purpose of this Court’s review of the district court’s decision, it is sufficient that the district court had jurisdiction at least over the named plaintiffs, who filed administrative complaints, received adverse decisions, and then filed timely civil actions in accordance with § 405(g). This Court has jurisdiction to review a final district court decision, under 28 U.S.C. § 1291 (1982).
III.
A.
Turning to the merits, it is important to stress the limited scope of judicial review of administrative regulations such as those at issue in this appeal. In Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), the Supreme *1147Court recently outlined the applicable principles of administrative law:
When a court reviews an agency’s construction of the statute which it administers, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute. ... If Congress has explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation. Such legislative regulations are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute. Sometimes the legislative delegation to an agency on a particular question is implicit rather than explicit. In such a case, a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency.
Id,., 104 S.Ct. at 2781-82 (footnotes omitted).
The central question in the present appeal is the proper interpretation of the statutes governing correction of erroneous payments. The relevant portion of 42 U.S.C. § 404(a) (1982), applicable to insured Social Security beneficiaries, provides:
Wherever the Secretary finds that more or less than the correct amount of payment has been made to any person under this subchapter, proper adjustment or recovery shall be made, under regulations prescribed by the Secretary____
The analogous SSI provision, 42 U.S.C. § 1383(b)(1) (West Supp.1985), contains similar language.3
In construing these provisions, plaintiffs contend that the Secretary must consider each month separately and compile a separate list of overpayments and underpayments and afford a hearing or hearings as to each erroneous disbursement. In contrast, the Secretary argues that she may group all incorrect payments — underpayments as well as overpayments — in calculating the net effect of erroneous payments. But on this particular question, the statutes are silent.
Because Congress decided not to describe explicitly the method for computing erroneous payments, we must defer to the Secretary’s interpretation so long as it is reasonable. Indeed, the Secretary is entitled to more than mere discretion in the context here, because both § 404(a) and § 1383(b)(1) expressly authorize her to determine whether “more or less than the correct amount of payment has been made.” Further, § 405(a) and the SSI provision in § 1383(d)(1) grant the Secretary “full power and authority to make rules and regulations and to establish procedures, not inconsistent with the provisions of this subchapter, which are necessary or appropriate to carry out such provisions____” This broad grant of authority permits SSA to issue “legislative regulations,” which a court may not disturb “unless they are arbitrary, capricious, or manifestly contrary to the statute.” Chevron, 104 S.Ct. at 2782; see also Heckler v. Campbell, 461 U.S. 458, 466, 103 S.Ct. *11481952, 1957, 76 L.Ed.2d 66 (1983); Schweiker v. Gray Panthers, 453 U.S. 34, 43-44, 101 S.Ct. 2633, 2640, 69 L.Ed.2d 460 (1981); Batterton v. Francis, 432 U.S. 416, 424-26, 97 S.Ct. 2399, 2404-06, 53 L.Ed.2d 448 (1977); Beatty v. Schweiker, 678 F.2d 359, 360 (3d Cir.1982).
The dissent agrees with the plaintiffs that the description contained elsewhere in the statutes regarding Social Security benefits as monthly entitlements compels the conclusion that erroneous payments should also be calculated monthly. But while the statutes governing entitlement to benefits refer specifically to monthly periods, significantly the provisions concerning erroneous payments contain no such limitation. There is no indication that Congress intended to incorporate in the latter statutes the other reference to monthly periods.4 In such a situation, this Court must defer to the Secretary’s reasonable interpretation. The dissent appears to ignore this basic principle of administrative law and statutory construction.
B.
Pursuant to the statutory authority, the Secretary issued regulations describing how she calculates overpayments and underpayments,5 and in particular how she proceeds when both types of error are present in a claimant’s record. The relevant SSI regulation provides:
The amount of an underpayment or overpayment is the difference between the amount paid to a recipient for a period and the amount of payments for which such recipient actually was eligible for such period. The period with respect to a determination of the fact or amount of any overpayment or underpayment begins with the first month of any quarter for which there is a difference between the amount paid and the amount due and ends with the month immediately preceding the calendar quarter in which the initial determination of overpayment or underpayment is made except that the period for an overpayment originally detected in 1974 shall not end later than December 31, 1974.
20 C.F.R. § 416.538 (1985). The regulation applicable to insured beneficiaries, § 404.-504, is somewhat ambiguous:
The amount of an overpayment or underpayment is the difference between the amount paid to the beneficiary and the amount of the payment to which the beneficiary was actually entitled.
However, the Secretary has announced that in applying § 404.504 she uses the same comparison of overpayments and underpayments within a prescribed period that is detailed in § 416.538. See SSR 81-19a.
We cannot say that the Secretary’s netting procedure is an arbitrary or capricious method of making the calculation required by Congress. SSA’s decision to net all errors — both underages and overages — and then inform the claimant of the single differential is reasonable from an administrative point of view, in that SSA can thereby avoid a multitude of confused notices and hearings. Those entrusted with the administration of the complex Social Security programs are entitled to make such choices.
*1149C.
Plaintiffs argue, however, that the Secretary’s practice nullifies their opportunity to seek waiver of overpayments at a prerecoupment hearing. The district court agreed, and held that SSA’s accounting procedure is “a recoupment without opportunity for the recipient to seek a waiver of the full [overpayment] amount.” 599 F.Supp. at 952. Accord Tarver v. Harris, No. C79-1554A (N.D.Ga.1980).6 Congress permits such waiver in limited circumstances, see 42 U.S.C. §§ 404(b), 1383(b)(1)(A), and in Yamasaki the Supreme Court construed § 404(b) to require an oral hearing before the Secretary may proceed to recoup overpayments. The netting procedure employed by the Secretary, according to the plaintiffs, allows SSA to recoup over-payments from other payments owed to the beneficiary and thus to evade the waiver and hearing provisions. '
This contention misapprehends the § 404 scheme, as well as the Yamasaki decision. Section 404(a) compels the Secretary to make a finding concerning the erroneous payments at issue; only afterwards does § 404(b) provide a hearing and an opportunity for waiver should SSA find that an overpayment occurred.7 In Yamasaki, the Court recognized this distinction. While it required a hearing for determination of imprecise § 404(b) standards such as “fault,” it noted that disputes may arise over the § 404(a) calculation of overpayment but there need be no hearing to resolve them. The Supreme Court declared, “The statute authorizes only ‘proper’ recoupment, but some leeway for practical administration must be allowed.” 442 U.S. at 696, 99 S.Ct. at 2555.
Plaintiffs argue additionally that Yamasaki supports their claim, since one of the named plaintiffs in that case sought a hearing concerning all overpayments even though she had incurred an offsetting underpayment. These facts, however, appear only in the Secretary’s brief, Petitioner’s Brief at 11 n. 15, Califano v. Yamasaki, 442 U.S. 682, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979), and the parties did not otherwise address nor did the Court mention the implications of netting. Nevertheless, the plaintiffs here claim that the Court’s decision is controlling as to the facts before it, citing NAACP v. Medical Center, Inc., 657 F.2d 1322 (3d Cir.1981) (in banc). Medical Center, however, contains no such interpretational maxim, as it merely sought to construe Supreme Court decisions and focused on the special facts which the Court faced and addressed in those cases. Id. at 1329-30. The import of the unacknowledged facts in Yamasaki is better analogized to the slim precedential value of summary affirmances by the Supreme Court when relied upon in later cases. See Edelman v. Jordan, 415 U.S. 651, 671, 94 S.Ct. 1347, 1359, 39 L.Ed.2d 662 (1974). Accordingly, we decline to base a decision of an issue of administrative law upon the fact that the Supreme Court did not address a footnote in a party’s brief in an earlier case.
D.
Plaintiffs appear to be concerned by a sense that Social Security beneficiaries in *1150their class are being treated differently— and less favorably — than those recipients whose cases involve an underpayment or an overpayment but not both. As they view the statutory scheme, claimants may seek waiver of any overpayment and thus secure extra benefits, unless they are unfortunate enough to have been underpaid during the same period. Even if this view were persuasive, a court may undo such an alleged discrimination only if it is at odds with the Act.
They observe that “[t]he overall objective of the social security system is ‘the protection of its beneficiaries from some of the hardships of existence.’ ” Finberg v. Sullivan, 634 F.2d 50, 63 (3d Cir.1980) (in banc) (quoting United States v. Silk, 331 U.S. 704, 711, 67 S.Ct. 1463, 1467, 91 L.Ed. 1757 (1947)). And thus, the proper focus of those interpreting the Act is to ensure that present benefits provide the necessary means for subsistence. See Beatty v. Schweiker, 678 F.2d 359, 362 (3d Cir.1982). But the waiver provisions applicable to overpayments embody this principle, by requiring the Secretary to forego recoupment of sums owed by the beneficiary where such a recoupment would reduce the individual’s future benefits below an acceptable level.
While Congress provided for deserving beneficiaries in some cases to receive more than their entitlements, by permitting SSA to waive such overpayments, it does not follow that any time a recipient is overpaid he or she will necessarily be entitled to seek a windfall. Where the recipient was also underpaid, it is logical to offset the amounts. By such an interpretation, the parties are placed in the position that the law intended, and Congress’ generous provision of waiver of overpayment remains the exception rather than the rule.
Plaintiffs maintain that one who is both underpaid and overpaid is actually in a worse position than all other claimants. This is true, they assert, because any time a recipient is underpaid he is likely to accumulate debts. Normally, this does not create hardship since once the underpayment is discovered the individual receives a lump-sum payment with which to pay liabilities. But if one is also overpaid, and cannot seek waiver of every monthly overpayment, after netting he will not receive the full lump-sum payment. Thus, while the primary goal of the Act, to provide adequate present benefits, may be fulfilled in theory as soon as the errors are discovered, those benefits, plaintiffs argue, may actually be inadequate given the individual’s large and pressing debts.
We are somewhat troubled by this scenario, granting that it is the worst possible case, but concern for a particularized situation is not grounds for voiding a regulation designed to deal with thousands of cases. As federal judges, we must leave the determination of policy to those with legislative authority. Chevron, supra, 104 S.Ct. at 2793. It is sufficient that, in numerous cases, erroneous payments are minor in amount and in duration, and the offset treats both parties equitably.8 Consequently, in allowing waiver of net over-*1151payments and maintenance of current benefits, the netting regulations are consonant with the goals of the Act. In a social welfare case we must recognize the “limitations on the practical ability of the State to remedy every ill.” Plyler v. Doe, 457 U.S. 202, 216, 102 S.Ct. 2382, 2394, 72 L.Ed.2d 786 (1982).9
Plaintiffs’ last contention is that the result reached today will create an incentive for SSA to delay notifying claimants of erroneous payments, in the hope that later mistakes will offset the earlier errors and ease the administrative burden of correcting them. This theory is flawed, however. Where SSA knows of an underpayment, it makes no difference to it whether an immediate disbursement is made or the beneficiary is later overpaid. If it knows of an overpayment, it is in the interest of SSA to notify the individual immediately, as numerous errors are small and many recipients will not request waivers or hearings. In any event, a beneficiary who knows of an error may seek immediate redress, and if necessary file an administrative complaint and ultimately a civil action.
In summary, the Secretary’s netting regulations are not arbitrary and capricious, but in fact are a reasonable means to accomplish the statutory mandate. They are consistent with the Act’s broad purposes, and must be upheld.
IV.
The district court did not reach the plaintiffs’ constitutional arguments, properly following the rule that, where possible, cases should be decided on statutory grounds. See, e.g., Yamasaki, 442 U.S. at 692, 99 S.Ct. at 2553. Because of our decision supporting the Secretary’s statutory argument it is necessary that we address plaintiffs’ claim that the statutes regarding the calculation and recoupment of erroneous benefit determinations, as construed by the Secretary, violate equal protection, due process, and “substantive due process.” We conclude that these claims are lacking in merit.
A.
Plaintiffs’ first constitutional claim rests on the equal protection component of the Fifth Amendment’s due process clause. See Schweiker v. Wilson, 450 U.S. 221, 226 & n. 6, 101 S.Ct. 1074, 1079 & n. 6, 67 L.Ed.2d 186 (1981). In Social Security litigation, a challenged classification will pass constitutional muster if it “advances legitimate legislative goals in a rational fashion.” Id. at 234, 101 S.Ct. at 1082.
The classification challenged on this appeal is not only rational but clearly necessary. A case in which a beneficiary is overpaid, for example, $100, is quite different from one in which the Secretary discovers an overpayment of $100 and an underpayment of $50. In the latter situation, the claimant rightly owes SSA only $50, and SSA properly establishes this before the waiver procedure begins. In short, no *1152two cases of erroneous determinations are alike, and Congress rationally gave the Secretary authority to make a threshold determination in each situation as to the exact overpayment amount subject to waivér. Administration of individualized benefits calculations in such a case-by-case fashion is a legitimate and proper legislative goal.
Plaintiffs insist that they are discriminated against since they, unlike others, may not seek waiver at a hearing of each monthly overpayment. But this argument rests on plaintiffs’ conception of an overpayment as a discrete error in one month. The Secretary, pursuant to statutory authority, takes a larger view of an overpayment as the net result of all errors in a period. Nothing in the Fifth Amendment prevents such a rational administrative interpretation.
B.
Next, plaintiffs assert that the regulations abridge their due process rights. If they were correct that § 404 and its companion SSI provision require an opportunity for waiver of any overpayment, regardless of an offsetting underpayment, discussion of their due process contention would be unnecessary: Yamasaki requires that evidentiary hearings be conducted pri- or to determinations of waiver of recoupment if a recipient so requests. However, the netting procedure, as construed by the Secretary pursuant to a Congressional grant of authority, is a valid method of establishing the amount of the overpayment that may be waived. As such, the Secretary is not required by due process considerations to provide a hearing when employing the netting regulations.
The latter result is also supported by Yamasaki. There, the Supreme Court held that the Secretary need not provide a hearing at which beneficiaries may present evidence relevant to overpayment computations. Because any issue in dispute is likely to involve only mathematical determinations, a claimant’s right to submit written evidence satisfies whatever process is due. 442 U.S. at 696, 99 S.Ct. at 2555. Such determinations are not of the character that would be clarified by oral testimony and examination of witnesses. Id.; Mattern v. Mathews, 582 F.2d 248, 256 (3d Cir.1978), cert. denied, 443 U.S. 912, 99 S.Ct. 3101, 61 L.Ed.2d 876 (1979); Griffin v. Califano, 448 F.Supp. 430 (N.D.Ga.1977), aff'd mem., 608 F.2d 1371 (5th Cir.1979).
C.
Finally, plaintiffs urge that the Secretary’s regulations are “totally arbitrary and irrational,” and therefore violate “substantive due process,” citing United States Dep’t of Agriculture v. Murry, 413 U.S. 508, 93 S.Ct. 2832, 37 L.Ed.2d 767 (1973).
In Murry, the Court held unconstitutional a statute that denied food stamp benefits to a household if any of its members was claimed by a non-member as a dependent child in the previous income tax year. Justice Douglas wrote that this scheme was irrational and therefore “lacks critical ingredients of due process.” Id. at 514, 93 S.Ct. at 2836.
Read broadly, Murry and similar decisions from the early 1970’s may be viewed as establishing expansive judicial review of legislative action. But in surveying these cases in Malmed v. Thornburgh, 621 F.2d 565 (3d Cir.), cert. denied, 449 U.S. 955, 101 S.Ct. 361, 66 L.Ed.2d 219 (1980), this Court refused to perceive such a radical trend. Rather, Judge Aldisert wrote, the eases merely reaffirm the rational basis test and the limited judicial review it provides in cases arising under the Fifth and Fourteenth Amendments. Id. at 575.
Accordingly, the analysis of this matter in light of Murry is similar to our earlier discussion of the equal protection issue, and the plaintiffs’ argument in this respect must fall.
V.
The Social Security system aims to provide eligible individuals with all amounts for which they are properly eligible, and other benefits necessary to maintain an *1153adequate standard of living. These goals are laudable, but their accomplishment is extremely complicated when applied in millions of cases. Errors are unfortunate, and in some cases inevitable.
In our view, the procedures devised by Congress and the Secretary represent a reasonable attempt to correct such errors, are congruent with the Act’s goals, and meet constitutional strictures. The district court’s order of summary judgment for the plaintiffs will therefore be vacated, and summary judgment entered in favor of the Secretary.

. Early in the proceedings, the district court remanded the case at the request of the Secretary for further clarification of the disputed amounts. The computation was complicated because Lugo also received SSI benefits as representative payee for his common law wife, Maria Luna, another named plaintiff in this action. Subsequently, SSA modified its conclusion regarding both claimants in minor respects, and Lugo’s action was reinstated on September 29, 1982.

. The Supreme Court agreed recently to consider a case that addressed this issue. City of New York v. Heckler, 742 F.2d 729 (2d Cir.1984), cert. granted, - U.S. -, 106 S.Ct. 57, 88 L.Ed.2d 46 (1985).

. The statute states in relevant part:
Whenever the Secretary finds that more or less than the correct amount of benefits has been paid with respect to any individual, proper adjustment or recovery shall, subject to the succeeding provisions of this subsection, be made by appropriate adjustments in future payments to such individual or by recovery from or payment to such individual or his eligible spouse (or by recovery from the estate of either).

. Plaintiffs seek support in the legislative history of § 404(b), in which the Senate Committee wrote that the statute "waives any right of the United States to recover by legal action or otherwise in any case of incorrect payment to an individual if adjustment or recovery would defeat the purpose of this title or would be against equity and good conscience.” Appellees’ Br. at 16 (quoting S.Rep. No. 734, 76th Cong., 1st Sess. 51 (1939) (emphasis added)). This language is as enigmatic as the statutory provision with respect to netting overpayments and underpayments, and is thus subject to divergent interpretations.

. According to the Secretary, overpayments are typically caused by inaccurate assessments of future income, unreported excess income, reductions of disability benefits through receipt of worker’s compensation benefits, retroactive changes in the law, incorrect entitlement determinations, and other recipient and administrative errors. Underpayments are commonly the result of errors in calculating benefit payments, unpaid accrued benefits, erroneous terminations, and unnegotiated or lost checks. Appellant’s Br. at 5 n. 3.

. Tarver held that the Secretary may not recoup overpayments from lump-sum benefits owed to claimants without affording a hearing. Here, the Secretary attempts to distinguish Tarver, arguing that that case involved recoupment of overpayments from underpayments that were from a different period and already adjudicated.

. Section 404(b) provides:
In any case in which more than the correct amount of payment has been made, there shall be no adjustment of payments to, or recovery by the United States from, any person who is without fault if such adjustment or recovery would defeat the purpose of this subchapter or would be against equity and good conscience.
42 U.S.C. § 404(b) (1982).
The plaintiffs further insist that the language in this subsection, that "there shall be no adjustment of payments,” refers to deprivation of lump-sum payments owed to the beneficiary as well as reduction of future benefit payments. However, this subsection does not come into operation until the § 404(a) offset is determined. Further, the plaintiffs’ argument once again rests on ambiguous language, and we must defer to the Secretary’s reasonable view that “adjustment of payments” refers to future benefit disbursements.

. The hardship described above is likely only where the overpayments and underpayments occur at widely different times within a period (e.gin separate years), and where the over-payments occur first. Lugo’s case is an example of this somewhat unusual situation. There, the overpayment occurred first, and if it had been discovered promptly Lugo could have sought waiver of the entire overpayment. But the longer the error went uncorrected the more likely it became that Lugo had spent all the funds. Then, the long underpayment began and debts could accumulate. When the netting finally occurred, the beneficiary did not receive a full lump-sum benefit, since the underpayment was offset against the overpayment, and he cannot seek waiver of every individual overpayment. While Lugo's circumstances are cause for concern, the Secretary’s actions may not be measured against their impact in one of the thousands of cases she must administer. Tustin v. Heckler, 749 F.2d 1055, 1064 (3d Cir.1984). Lugo’s situation was worsened because his underpayment was quite large and continued over a four-year period. The cases of the other named plaintiffs provide a ready contrast. Luna’s underpayment was only $215.90, and was offset by an identical overpayment; Terebieniec’s underpayment was merely $126.30, in contrast to his $966.90 overpayment. Pickel’s case provides more severe errors — a $2,208.90 underpayment and $3,489.00 overpayment. But the mistakes in the Pickel case accrued in little more than a year.

. This conclusion is consistent with our decision in Beatty v. Schweiker, 678 F.2d 359 (3d Cir.1982). In that case, the Secretary granted SSI benefits four years after the application was filed, and disbursed $11,500 in retroactive benefits. Because of this large award, at the beginning of the following quarter the claimant’s resources exceeded the statutory limit and her SSI benefits were terminated. The civil action challenged the Secretary’s regulation that included lump-sum SSI awards in a calculation of available resources. This Court upheld the Secretary’s action as a reasonable interpretation of the statute. Further, we rejected the plaintiffs argument that just as § 1383(b)(1) forbids the imposition of unfair penalties on claimants who were overpaid, it should also be construed to prevent disadvantaging those who were under-
paid for lengthy periods of time. While it was assumed that much of the lump-sum payment would be used to alleviate accumulated debts, the Act in a broad sense focuses only on maintenance of acceptable present benefits:
If the Secretary were to terminate an individual’s current payments to recoup previous overpayments, the recipient may have nothing on which to live. The penalization that the provisions for waiver of overpayment are designed to avoid are of a different order of magnitude from whatever hardship Beatty will suffer. By definition, despite the termination of benefits, Beatty is able to maintain a standard of living at the federal minimum income level.
678 F.2d at 363.