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U.S. upheld on recovering Social Security overpayments

The Supreme Court has upheld federal regulations aimed at saving the government time and money when it mistakenly overpays some Social Security recipients. The justices, voting 5-4 Wednesday in a case from Colorado, said the rules are a reasonable interpretation of the Social Security Act. The court rejected arguments that needy recipients could suffer undue hardship.

The regulations apply to two Social Security programs: old-age, survivors and disability insurance benefits and supplemental security income.

Adopted by the Department of Health and Human Services, the rules cover instances in which the government at different times overpays and underpays recipients.

The rules allow officials to balance the overpayments against underpayments, arriving at a net amount that is owed either the government or the recipient.

The 10th U.S. Circuit Court of Appeals based in Denver ruled in 1988 that the regulations illegally may deprive needy recipients of the chance to keep overpayments.

The appeals court said federal law requires the government to abandon recovery of overpayments when a recipient is blameless or if returning the extra money would cause the recipient serious hardship.

But the administration said the court misunderstood the way the rules work.

Administration officials said the regulations would not deprive needy people of the opportunity eventually to keep the extra money.

Government lawyers said the regulations would spare federal officials from paying out millions of extra dollars automatically and then going through an elaborate procedure to recover some of the money.

From 1981 to 1986, about 4.7-million people a year received too much or too little due to errors in the retirement and survivor's insurance program alone, federal officials said.