Government Agrees to Review Denials in Disability Cases

The U.S. government has agreed to reconsider tens of thousands of cases in which benefits were denied to people who said they could not work because of mental or physical ailments, a published report said.

The agreement is part of a proposed settlement of a lawsuit filed on behalf of more than 200,000 New York state residents, the New York Times reported in today’s editions.

Those who prove they were wrongfully denied benefits could receive lump-sum payments of $3,000 to $6,000 a year for up to 4 1/2 years, the paper said.

The settlement applies only to New York residents, but lawyers say it could set a pattern for other parts of the country.

It still requires court approval, which lawyers for both sides have recommended.

The settlement would affect any New York resident denied benefits at any time in the 11 years since the Ronald Reagan Administration purged the Social Security disability rolls. Benefits are supposed to be paid to anyone who cannot engage in any “substantial gainful activity.”