into consideration. However, plaintiff Gilmore and his wife had been separated since November 1973.
The defendant admits that plaintiff Gilmore's payment reductions were erroneous and that his wife's income should not have been considered. He should have received $82.30 for the months of January through March and because his Social Security benefits were increased, $70.20 thereafter.
Hattie Gooch is a 69 year old widow living in Modesto, California. Because the State incorrectly understated the amount plaintiff Gooch was receiving from the Veterans' Administration, she received $175 in SSI benefits, or $7 more than she was entitled to, for the months of January through April 1974. In April 1974, her VA benefits increased by $9. In May, plaintiff Gooch's benefits were reduced to $120 per month. The defendant admits that this figure is incorrect and has no explanation for the error. Both parties agree that plaintiff Gooch should have received $159 in May 1974.
Pearl Wells began receiving a $73 per month SSI benefit in January 1974. During January, plaintiff Wells' VA benefits were increased by $9 per month. She alleges that she reported this immediately to her local Social Security office. Plaintiff received no SSI check for May 1974. She was told that her payments were suspended because the caseworker added the entire amount of her increased VA benefits ($96) to the entire old amount ($87) and thereby obtained the erroneous sum of $183. The $9 increase should have been added to her previous monthly benefits ($87) for a correct total of $96. She also was informed that the defendant intended to recoup amounts erroneously paid because of an improper classification of her Veterans' Benefits. Plaintiff received $59 for June 1974 from SSI and in July she began to receive what defendant claims is the correct amount of $50 per month. Defendant argues that plaintiff Wells should have received a May SSI payment and admits that her explanation of how the error occurred may be valid.
Defendant alleges that plaintiff Wells was married on November 19, 1974, and because of her husband's cash resources and unearned income, she became ineligible for SSI in December 1974. She has allegedly signed a statement indicating that she wished her ineligibility to become effective immediately and, therefore, her payments have been suspended. She returned voluntarily her December checks and received no payment for January.
Plaintiff Agnes Hinds applied for SSI benefits in December 1973 and was found eligible in March 1974. According to the defendants, plaintiff Hinds was paid $558.30 in March which represented retroactive payments to January 1974. Mrs. Hinds received her April check but did not receive her May check on time. She reported this nonreceipt to the Social Security Office and received her check later in May.
At the same time that plaintiff Hinds reported nonreceipt of her May check, she also reported that her husband had been in jail since January 4, 1974. Defendant alleges that Mr. Hinds was released on bail during February 1974, but was returned to jail, actually a hospital for the criminally insane, during March 1974. He properly had been converted to SSI in January 1974. Every month Mrs. Hinds would take her husband his SSI check, he would endorse it, and she would cash it.
Based on the information reported by plaintiff Hinds, the defendant determined that Mr. Hinds had been overpaid on two bases: (1) He was being paid as an individual rather than as part of a couple for the period of January through March; and (2) because of his institutionalization, he was entitled to no benefits after March 1974. Therefore, Mrs. Hinds' payments were suspended as of June 1974 to recover Mr. Hinds' overpayment.
Realizing that no finding had been made as to whether a waiver of overpayment was appropriate, defendant states that plaintiff Hinds was asked, on July 10, 1974, to complete a "without fault" statement. All benefits previously withheld were allegedly paid on August 8, 1974. Plaintiff Hinds was denied a waiver of overpayment and on November 1, 1974, signed an agreement to refund her husband's overpayments at a rate of $25 per month.
In addition to affidavits summarizing the factual backgrounds of the individual plaintiffs' claims, the plaintiffs also have filed affidavits summarizing eight nonparty case histories.
The common thread running through these case histories, like those of the plaintiffs, is that the individuals' SSI benefits were reduced without a prior notice and without opportunity for a hearing.
Defendant, F. David Mathews, Secretary of Health, Education and Welfare is sued in his official capacity as administrator of the Supplemental Security Income Program. See 42 U.S.C. § 1383b (Supp. III, 1973).
II. REGULATION AT ISSUE
Regulations provide a four stage procedure to review both initial and continuing eligibility determinations for SSI benefits. 20 C.F.R. §§ 416.1401 et seq. After an initial determination, there are the reconsideration, hearing, and appeals stages within the agency, and the final stage is judicial review. Regulations provide in general that a person who was once found eligible for SSI benefits cannot have them reduced, suspended, or terminated until the reconsideration stage, which includes notice and hearing rights, is completed. 20 C.F.R. §§ 416.1336(c),.1417,.1419(a).
The regulation that plaintiffs maintain is invalid allows a departure from the general procedure outlined above. It reads in relevant part as follows:
(a) Advance written notice of intent to discontinue payment because of an event requiring suspension or to reduce (see subpart D of this part), or terminate payments prior to effectuation of the action will be given in all cases except where:
(2) Amendments to Federal Law or an increase in benefits payable under Federal law (other than benefits payable under this part) require automatic suspension, reduction, or termination of benefits under this part [Amendment to Federal Law Exception] or