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McLellan v. Colorado Department of Human Services.

2022 COA 7. No. 20CA1217.  Social Security—Supplemental Security Income Benefits—Aid to the Needy Disabled—Assistance Reimbursement—First Benefit Payment.

January 6, 2022

McLellan is disabled. She applied for Supplemental Security Income (SSI) benefits in 2007, but her request was not approved until 2017. While awaiting approval of SSI, she applied for interim assistance from Larimer County under the Aid to the Needy Disabled—State Only (AND-SO) program. As a condition of receiving AND-SO benefits, applicants are required annually to sign an Authorization for Reimbursement of Interim Assistance (IM-14) form. The IM-14 authorizes the county to recover funds from the “first retroactive SSI payment.”

In 2012, Larimer County began providing McLellan monthly assistance payments through the AND-SO program. In 2017, the SSA determined McLellan was eligible for SSI benefits beginning in 2012 and found she was due $30,402.90 in back payments for the period between 2012 and 2017. In March 2018, McLellan received her first disbursement in the amount of $2,250. She received a second disbursement of the same amount in September. On the same day, Larimer County received a check from the Social Security Administration (SSA) in the amount of $11,571 to reimburse it for the interim assistance it had provided McLellan. Larimer County notified McLellan that it had received the reimbursement.

McLellan requested an administrative hearing before the Office of Administrative Courts alleging that she never authorized Larimer County to keep any portion of her back payment award, any authorization she may have given was invalid or had expired, and Larimer County was not entitled to keep it because it was not the initial SSI back payment. The Administrative Court decided Larimer County was entitled to keep the money. McLellan appealed, and the Colorado Department of Human Services (department) Office of Appeals affirmed. McLellan sought judicial review, and the district court upheld the decision.

As an initial matter, the Court of Appeals rejected the department’s argument that McLellan lacked standing, because she asserted an economic loss sufficient to satisfy the requirement for an injury in fact.

McLellan argued that Larimer County improperly withheld the third retroactive SSI payment, contending that a county is only entitled to accept the first payment from the SSA. A county may be reimbursed by the SSA for AND-SO payments pursuant to the Interim Assistant Reimbursement Regulation (IAR). The Court read the IAR in conjunction with the federal statutory and regulatory terms and concluded that “first retroactive SSI payment” in the IAR means the first “SSI benefit payment” as defined in 20 C.F.R. § 416.1902. Accordingly, in March 2018, McLellan did not receive the “first retroactive SSI payment”—she received the initial installment of her first “SSI benefit payment” (or of her “first retroactive SSI payment”). Larimer County therefore received the portion of the first SSI benefit payment that had been withheld from McLellan and paid to Larimer County as reimbursement for the assistance she had received.

McLellan also argued that the IM-14 form authorizing reimbursement from her benefits was invalid because (1) neither Larimer County nor the department signed the form and (2) it was expired. McLellan made no evidentiary record in the administrative proceedings that the SSA-Colorado Agreement required the signature of a state representative on the IM-14, and the agreement was not in the record on appeal, so the Court did not consider the first argument. As to the expiration argument, under the IRA the IM-14 is valid for one year from the date the client signs it. Here, the IM-14 was still valid when the SSA paid the second installment and disbursed the reimbursement funds in September 2018, less than one year after McLellan signed the authorization.

The judgment was affirmed.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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