Social Security Can’t Recoup Disabled Debtor’s Overpayments

The Social Security Administration can’t reduce payments to a bankrupt beneficiary to recoup overpayments it made through its own error, a federal appeals court said.

Equity considerations preclude the Social Security Administration from going after Darrin Lenald Cooper’s disability insurance benefits after he discharged his debts in bankruptcy proceedings, the US Court of Appeals for the Ninth Circuit said Thursday.

“The limited factual and legal connections between the debt and Cooper’s ongoing entitlement to SSDI benefits do not make it equitable for SSA to defy the financial protection purposes of Chapter 7 bankruptcy and SSDI benefits to recover an overpayment ...