Lawsuit alleges SSA mishandled Safety Net of Oregon

Street Roots, March 24, 2014

SSA benefits formDisability Rights Oregon and the Oregon Law Center have filed a class action lawsuit against the Social Security Administration, alleging that its handling of a troubled nonprofit organization is illegal and imperils the financial stability of hundreds of disabled individuals.

On March 6, the Social Security Administration Office of the Inspector General served a federal search warrant on Safety Net of Oregon, a nonprofit that manages the disability benefits for individuals unable to handle their finances, to investigate charges that $600,000 of beneficiary funds were unaccounted for. The Social Security Administration (SSA) also decertified Safety Net, leaving about 1,000 people, many with severe disabilities to find a new organization or individual (a “payee”) to manage their benefits by March 21. Those unable to find a new payee would be unable to access their money beginning April 1.

Filed March 24 in U.S. federal court, the complaint states that SSA’s efforts to alert Safety Net’s clients through phone calls and letters that they would need a new payee have fallen short. According to the complaint, only 300 of Safety Net’s clients have found new payees. Within a week, the remaining 700 will be unable to access their funds for rent, utilities, medical costs and other necessities. The complaint also notes that many affected people, because of their disability, will have a difficult time navigating SSA’s bureaucracy.

The complaint was filed on behalf of six of Safety Net’s clients, which are described as homeless or near homeless, as well as homeless outreach organization JOIN. The complaint states that these individuals either didn’t get notice from Social Security that they would need to find a new payee or have been unable to find one. With their benefits about to be suspended, some individuals face the imminent possibility that they will be unable to make rent and will be evicted, according to the complaint. One of them will be unable to make payments he owes as part of his probation and may go back to jail.

“There’s a lot of confusion and concern,” says JOIN Executive Director Marc Jolin. “People not really understanding what’s happening and why, and what it’s going to mean to transfer their payee representative and what happens if they can’t. We’ve got people coming into JOIN asking those questions pretty regularly, not really understanding what’s happening and looking for help trying to navigate the situation.”

The complaint states that JOIN would have its finances and resources strained as it devotes more aid to former Safety Net clients. JOIN’s contractual obligation with the City of Portland to move a certain number of homeless individuals off the street could also be harmed by Safety Net’s closure, the complaint states.

SSA has refused to reappoint a new payee for Safety Net’s clients, according to the complaint, and has done no outreach to local social services agencies. “Instead, SSA is requiring individuals to go to a local SSA office to apply for a new payee. This is a significant barrier for many SSA clients.”

“Many individuals are incapable of going to an SSA office,” the complaint states. “Homeless individuals served by JOIN do not understand that their benefits will be delayed, do not want to go to a government office, and their outreach workers must spend an enormous amount of time supporting and coaching them before they are willing to go to SSA.”

When SSA’s regional manager, Cory Burgess, was informed that many former Safety Net clients suffer from paranoia and are reluctant to step foot in a government office he is quoted in the complaint as saying, “Well, they’ll be in next month when they don’t get their money.”

“We’re simply saying please appoint a new one,” says Monica Goracke, managing attorney at the Oregon Law Center, which filed the complaint. “Don’t interrupt peoples’ benefits.”

The SSA’s handling of Safety Net is illegal, according to the complaint, which cites laws stating that when a payee is shutdown it must assign an alternative payee rather than disrupt payments. The complaint also states that SSA can only suspend payments when no other suitable payee can be found and points out that Share and Care House, another nonprofit, has offered to take Safety Net’s old clients. The complaint also argues that Safety Net clients were never given a chance to appeal their suspension of benefits as required by law.

The complaint asks that SSA be directed to find new payees for all of Safety Net’s clients who haven’t found one. It also asks that a restraining order be placed on SSA to prevent it from suspending the benefits of Safety Net clients until they are given adequate notice is given to them of their right to appeal the decision.

“They’re relying on those fund to pay rent, utilities and transportation,” Jolin says. So having an interruption even a few weeks can be pretty devastating.”

Multnomah County Chair Marissa Madrigal has sharply criticized the Social Security Administration’s handling of a troubled nonprofit organization that manages the federal disability benefits of 1,000 individuals who may soon find themselves without a way to pay for rent, groceries and other necessities.