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Feds To Pay $500M In Social Security Lawsuit

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Aug 11, 2009 6:00 pm US/Central

Feds To Pay $500M In Social Security Lawsuit

At Least 80,000 Americans Previously Denied Payments To Receive Checks

OAKLAND (AP) ― A federal judge has tentatively approved a settlement requiring the government to pay more than $500 million to tens of thousands of people wrongly barred from receiving Social Security payments.

The Social Security Administration over the past several years withheld benefit checks from recipients found to have outstanding arrest warrants

Agency officials say they were complying with a 1996 law requiring them to stop payments to recipients "fleeing to avoid prosecution" of a felony.

But a class action lawsuit filed last year alleged the policy was wrongly applied to all recipients with warrants, whether they were fleeing prosecution or not.

In reaching the settlement, the agency agreed to pay missed benefits and reinstate monthly payments to at least 80,000 people.

(© 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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