forwarded to her. The monthly benefit was set at $ 58.90, payable retroactively from June, 1955.
Nearly three years after this award was made, plaintiff was requested to file a form indicating the length of her employment in the years 1956, 1957, 1958, and 1959. On May 13, 1959, plaintiff answered that she had worked every month during those years. Plaintiff was then requested to submit a supplementary statement, which she did on November 3, 1959. She there stated that she worked for a doctor, and added: 'I work 6 hours each week -- 1 hour four evenings and 2 hours on Saturday.' She reported her earnings at $ 18.00 per week from 1956 on.
In February, 1960, plaintiff was informed that it had been determined that no benefits were payable to her from June, 1955, on, since she had worked on seven or more calendar days in each month thereafter, and that she had therefore been overpaid in the amount of $ 3,414.70. She was also told that since she was still working, her benefits had been suspended effective March, 1960. Plaintiff was requested to refund the $ 3,414.70 'immediately.'
Plaintiff asked for, and received, reconsideration of this decision, which was affirmed. She then sought relief from a Hearing Examiner, who held a full hearing at which plaintiff was present. The Hearing Examiner reached the following conclusion here relevant:
'* * * that while the claimant was 'without fault' in receiving the incorrect payments, recovery of the overpayments would not defeat the purpose of the Act or be against equity and good conscience.'
Plaintiff requested the Department's Appeals peals Council to review this decision. The Appeals Council denied review, adding: 'The Hearing Examiner's decision stands as the final administrative decision of this Department.' Plaintiff subsequently filed this action to review the final Departmental decision, which is conceded by both parties in this case to be equivalent to a 'final decision of the Secretary made after a hearing,' 42 U.S.C. § 405(g), thus giving the Court jurisdiction.
The determination that the plaintiff was overpaid is not challenged in these proceedings. The sole issue is whether plaintiff must refund the amount overpaid to her.
42 U.S.C. § 404(b) provides:
'There shall be no adjustment or recovery by the United States in any case where incorrect payment has been made to an individual who is without fault * * *, and where adjustment or recovery would defeat the purpose of this subchapter or would be against equity and good conscience.'
Since the Hearing Examiner has unequivocally -- and correctly, in view of the plaintiff's full disclosure in 1956 -- held that the plaintiff was 'without fault' in receiving the benefits while she was working part-time, the sole question is whether adjustment or recovery 'would defeat the purpose of this subchapter or would be against equity and good conscience.' 42 U.S.C. § 404(b), supra. (Emphasis added.) The Court does not reach the question whether repayment would defeat the purpose of the subchapter, because the Court concludes that such repayment would clearly 'be against equity and good conscience.'
The Department's own regulations interpreting this section define the phrase as follows:
"Against equity and good conscience' means that it would be inequitable to ask for repayment from the individual (regardless of his financial circumstances). This depends upon whether the individual by reason of the payment has '(a) Relinquished a valuable right, e.g., a wage earner who has retired from employment which he is now unable to regain; or '(b) Changed his position for the worse, e.g., a wage earner entered into employment relying on the erroneous advice of a Bureau representative that his employment after entitlement is not covered and did not report the employment.' Reg. § 404.509, Appendix, Title 42, U.S.C.A., 20 C.F.R. 404.509.. (Emphasis added.)
Under the language of this regulation, plaintiff 'relinquished a valuable right' -- namely, the right to decide intelligently how much she wanted to work. Plaintiff stated on a questionnaire dated June 26, 1960: 'I limited my earnings so that I would not earn over $ 1200 in any year.' Had plaintiff known that the 7-day rule was to be applied in a manner which would deprive her of all Social Security benefits, she might well have chosen to work much more than she did. On the other hand, she might have chosen not to work at all, and to receive, instead, the insurance benefits. By working, she earned only $ 13.10 per month more than she received in such insurance benefits. On the same questionnaire of June 26, 1960, plaintiff said that her brother was on a pension and was ill with a heart condition and arthritis. She might well have decided to stay home with him. Plaintiff thus lost a valuable right -- the right to choose intelligently among various alternatives -- through no fault of her own. See Kilby v. Ribicoff, 198 F.Supp. 184, 187 (D.Pa.1961). In these undisputed circumstances, with fault attributable solely to the Department's failure promptly to follow up plaintiff's 1956 disclosures, and in view of the undisputed fact that plaintiff's total savings amount to about $ 11,800, with a monthly income jointly with her brother of $ 177 balanced against joint monthly expenses of $ 170, the Court believes that it would be inequitable and unconscionable to require plaintiff to repay the amount she was overpaid, either by direct cash repayment or by withholding current benefits
as they come due.
Defendant's motion to dismiss or in the alternative for summary judgment will therefore be denied, and plaintiff's motion for summary judgment will be granted.