7,000 Low-Income Families with Children Whose Benefits Were Wrongfully Cut Will Receive Retro-Payments in Multi-Million Dollar Public Assistance Benefit Settlement
MONDAY, APRIL 15, 2013

As a result of a federal class action lawsuit challenging the unlawful withholding of benefits, more than 7,000 recipients of Safety Net Assistance in New York City will receive retro-payments of between $100 and $718 . This settlement is thought to be one of the largest ever for recipients of public assistance benefits in New York.

The United States Federal District Court for the Southern District of New York approved the negotiated settlement in Hercules v. Doar and more than $3 million in retro-active benefits payments are being issued by the City of New York.

The federal lawsuit was filed in August, 2010, by The New York Legal Assistance Group, The Legal Aid Society and the law firm Cooley LLP against the New York City Human Resources Administration and the New York State Office of Temporary and Disability Assistance. Plaintiffs are Safety Net Assistance recipients living with young children whose public assistance benefits were reduced or discontinued for excessively long periods when they were sanctioned for alleged violations of the public assistance employment requirements. Families can be penalized or sanctioned by having all or some of their benefits cut for up to six months when they miss a mandatory appointment. Due to a computer programming error which lasted for several years, HRA and OTDA issued notices that incorrectly told SNA recipients living with children that they were subject to the longer penalties which are, by law, applicable only to individuals living in households without children.

"This 'computer error' had persisted for over six years, during which time the City had been shortchanging thousands of low-income families with minor children,“ said Adriene Holder, Attorney-in-Charge of The Legal Aid Society’s Civil Practice. “The litigation underscores the important role that attorneys at Legal Aid and our partner organizations play in ensuring that vulnerable families are treated fairly."  Holder noted that the typical family with two children receives a maximum benefit of only $789 per month, including payments for rent.

Julia Russell, an attorney with the New York Legal Assistance Group (NYLAG) said: “We are very pleased that these recipients are finally getting the benefits they were erroneously denied, although we regret that we needed to sue the City and State to get them to correct their mistakes.”

In addition to the more than 7,000 individuals who are receiving payments now, approximately 8,000 additional households are eligible to receive Hercules payments if and when they return to the public assistance rolls within the next 34 months.

As a result of the Hercules v. Doar negotiations, HRA and OTDA have corrected their computer systems, modified their sanction notices to include information necessary to allow individuals to challenge the duration of their sanctions, and lifted any improper sanctions currently in effect.

Under the settlement approved by the Court, defendants will also delete the sanctions resulting from these improper notices from class members’ records and will not count them in assessing any future penalties. Attorneys for the plaintiffs will monitor the City’s notices for the next 34 months to make sure that similar problems do not recur.

Lawyers from NYLAG representing the plaintiffs include: Jane Greengold Stevens, Julia Russell, and Danielle Tarantolo. Lawyers from The Legal Aid Society include: Lester Helfman, Susan Sternberg, Susan Bahn, and Kenneth Stephens. Lawyers from Cooley LLP include Jason Koral, Jennifer Lerner and Jennifer Pavane Kenter.