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Judge orders immediate restraining order against Social Security to protect disability clients

U.S. Judge Marco Hernandez ruled on March 26 that the Social Security Administration (SSA) improperly handled the clients of a nonprofit organization that is shutting down amidst a federal investigation.

Earlier this month, Safety Net of Oregon was served with a federal search warrant on allegations that it was mismanaging clients’ funds. Safety Net serves as the representative payee, which is an organization or individual that manages the disability benefits of individuals unable to handle their own money. The nonprofit, which was payee to about 1,000 people, is slated to shut it doors April 1, prompting concerns that its clients wouldn't have access to their money and would be unable to pay rent, utilities, medical bills and other expenses.

The ruling by Hernandez is in response to a lawsuit filed by Disability Rights Oregon and the Oregon Law Center against the SSA. The suit alleged that the SSA was required by law to assign the former clients of Safety Net to another payee service.

“These people are poor, homeless or precariously housed, and among the most vulnerable citizens in our community,” said Kathy Wilde, an attorney with Disability Rights Oregon, telling the judge that SSA had an “unambiguous statutory mandate” to assign Safety Net's clients to a new payee.

She said that many of Safety Net's clients are difficult to reach. Many, she said, were unaware that they needed a new payee and would have a rude awakening on April 1 when they were unable to access their money. She said that it would be “chaos” at Safety Net's office on April 1 when people showed up to access their money.

Janice Herbert, assistant U.S. attorney representing, told the judge that SSA had been proactive in attempting to find new payees for former Safety Net clients. She said that Share and Care House, a Washington-based nonprofit, has had a steady presence at SSA's Portland offices to sign up Safety Net clients.

She said that it's simply not feasible to transfer over the 426 former clients who haven't found a payee to a new payee because Safety Net's records are a mess. She also said that if a beneficiary is assigned to a new payee, then the law requires there to be a 15-day delay period to allow the beneficiary to object.

“It's simply not good enough to transfer over to another organization,” she said. “That's the problem.”

Herbert also said that SSA has been doing outreach with local social service organizations and the county to alert former clients of their situation. She also said that she expected there to be a wave of people at the SSA offices after the first of April. At this point, she said SSA would be able to issue an emergency check and get each individual signed up with a new payee.

Hernandez disagreed with this approach and ruled in favor of the plaintiffs. SSA must now begin assigning new payees to former Safety Net clients.

On March 14, Street Roots reported the following investigation on why  Portland carries a backlog of Social Security Disability cases nearly twice as high as the national average.

On March 24, Street Roots reported that the Oregon Law Center and Disability Rights Oregon filed a lawsuit against the Social Security Administration.