## Facts

- Jim Coulston received Social Security benefits due to an intellectual impairment and had difficulty reading.
- The Social Security Administration mistakenly mailed Coulston a $20,658 benefit check.
- Coulston believed the check was a legitimate back payment related to medical expenses after he canceled Medicare.
- With help from his ex-wife and a friend, Coulston cashed the check and spent most of it on bills and Christmas gifts.
- Coulston returned the unspent portion but lacked resources to repay the remainder.
- The SSA sought to recover the remaining $18,249 by withholding Coulston’s future benefits.
- Coulston requested a waiver of recovery under 42 U.S.C. § 404, asserting he was without fault and that recovery would defeat the purposes of benefits or be against equity and good conscience.

## Issues

1. Whether substantial evidence supported the Commissioner’s finding that Coulston was not “without fault” in accepting and spending the erroneous payment under 42 U.S.C. § 404.
2. If Coulston was without fault, whether recovery would defeat the purpose of Title II benefits or be against equity and good conscience.

## Decision

- The Eighth Circuit reversed the district court’s judgment affirming the Commissioner’s denial of waiver.
- The court held Coulston was “without fault” in receiving and using the mistakenly issued check.
- The court concluded the agency could not recoup the remaining overpayment and directed that a waiver of recovery be granted.

## Legal Principles

- Under 42 U.S.C. § 404, SSA may recover overpayments unless the beneficiary is without fault and recovery would defeat the purpose of Title II or be against equity and good conscience.
- “Fault” is assessed in light of the claimant’s circumstances, including mental and educational limitations, and turns on the claimant’s own knowledge and conduct.
- The “without fault” determination should not be based on the supposed prudence, abilities, or omissions of third parties who assisted the claimant.
- Where an impaired beneficiary reasonably and in good faith believes an unexpected payment is proper, the record may not support a finding of fault.
- If the claimant is without fault, recovery may be barred when recoupment would undermine the claimant’s subsistence benefits or would be inequitable given reliance and inability to repay.

## Conclusion

The Eighth Circuit required the SSA to waive recovery of an erroneous benefit payment because the claimant’s intellectual impairment and good-faith belief in entitlement showed he was without fault, and withholding future benefits to recoup the overpayment was not permissible under § 404.


Coulston v. Apfel, 224 F.3d 897 (8th Cir. 2000)