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Social Security to Pay $500M Over Database Snafu - InternetNews.
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Social Security to Pay $500M Over Database Snafu

The Social Security Administration has agreed to pay more than $500 million in benefits that were withheld from 80,000 people since 2007 due to an errant computer program.

The preliminary agreement, approved by U.S. District Court Judge Claudia Wilken in Oakland, Calif., resolves the class-action suit Martinez v. Astrue. In that suit, the plaintiffs argued that a 1996 law -- designed to prevent criminals receiving government benefits from fleeing prosecution -- resulted in innocent individuals being denied Social Security payments.

The court upheld the complaint alleging that the agency used a computer-matching system to deny benefits to individuals whose names turned up in warrant databases, many of whom were tagged due to false allegations or minor offenses.

Social Security staffers mistakenly told many members of the class that they weren't eligible to appeal to have their benefits reinstated after they'd been flagged by the database, according to the National Senior Citizens Law Center (NSCLC), one of the groups representing the plaintiffs.

"The vast majority of class members were not fleeing at all," NSCLC attorney Gerald McIntyre said in a statement. "Many never knew that criminal charges were pending against them, let alone that a warrant had been issued."

McIntyre said that the erroneous warrants often stemmed from individuals who wrote checks with insufficient funds, and only learned of the charge after receiving notice that their Social Security benefits were being canceled.

The lead plaintiff in the case was Rosa Martinez, a California woman whose benefits were withheld due to a 1980 drug warrant issued in Miami. A subsequent investigation revealed that the warrant was for a different individual of the same name, but Martinez was unable to convince the agency to reinstate her benefits.

Dan Moraski, a spokesman for the agency, told InternetNews.com that he could not comment on the preliminary agreement until the settlement becomes final.

The so-called "fleeing felons" law has netted convictions of numerous criminals for murder and other serious offenses, but several courts have ruled the practice of automatically denying benefits due to database searches unlawful.

The settlement also directs the agency to notify people whose benefits were suspended or denied between 2000 and 2006 to apply for reinstatement.

The settlement could lead to the reinstatement of benefits for more than 200,000 people, according to NSCLC.