How to Present an Equitable Estoppel Defense at a DSHS Hearing
Authored By: Northwest Justice Project
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- Element 1: An act, admission or statement inconsistent with a later claim.
- Element 2: An action by another party in reliance on DSHS's act.
- Element 3: Injury to the party who relied on DSHS if DSHS is allowed to reject its prior action.
- Element 4: Applying estoppel is necessary to prevent manifest injustice.
- Element 5: The exercise of governmental functions will not be impaired by applying estoppel.
- What if I need legal help?
If you get an overpayment notice from DSHS saying that you owe them money or food stamps because they gave you benefits they should not have, and the overpayment was through no fault of yours, you should ask for a fair hearing, also called an administrative hearing. You have a legal defense against the overpayment. You must ask for the fair hearing within 90 days of the date of the overpayment notice. The notice may say the overpayment was unintentionally caused, rather than say it was administrative error. It will also say you have to repay it. It will not tell you that there is a legal defense against it.
The legal defense is "equitable estoppel." WAC 388-02-0495. This means:
it is fair that DSHS be stopped from collecting the overpayment if it was not your fault you were overpaid and
you will be financially harmed if you have to repay it.
There are five parts to this defense. Your situation must meet all five elements. We describe them below with examples of how to prove you meet each one.
If you believe you meet all five elements, ask for a pre-hearing conference with the Fair Hearing Coordinator (FHC) in your local DSHS office. Tell the FHC you will ask the judge to apply equitable estoppel in your fair hearing. If the FHC agrees you are entitled to use this defense against collection of the overpayment, s/he can fill out a document called "Stipulation and Agreed Order of Dismissal" to present to the judge at your hearing.
* If a DSHS Administrative Hearing Coordinator tells you that equitable estoppel does not apply to your federal food assistance benefits, you should apply online for legal help at CLEAR* Online (go to www.nwjustice.org) or call CLEAR at 1-888-201-1014.
If the FHC does not agree with you, go to your fair hearing. Tell the judge you are presenting an equitable estoppel defense. In order to get the judge to stop DHS from collecting the overpayment you will need to go through each of the five elements to show the judge you meet each one by clear and convincing evidence as explained below. The elements are:
A party's admission, statement or act inconsistent with its later claim;
Action by another party in reliance on the first party's act;
Injury that would result to the relying party from allowing the first party to contradict or refute the prior act, statement, or admission;
Application of estoppel must be necessary to prevent a manifest injustice, and
The exercise of governmental functions must not be impaired as a result of applying estoppel.
It will probably be very easy to show you meet this requirement. DSHS sent you a letter saying that you were eligible for benefits. DSHS paid the benefits. DSHS then sent a letter (a later claim) stating either that you were not eligible or that you got too much.
Show the FHC or the judge your letter from DSHS saying you were eligible for benefits. If DSHS did not send you a letter, tell the FHC or the judge that DSHS's issuance to you of the check or stamps is the "act" in which DSHS said that you were eligible for benefits. Then point out that the letter saying that you were not eligible and asking you to repay the benefits is the inconsistent act.
You are the party (person) who relied on DSHS's act or statement. You believed you were eligible to get the benefits DSHS sent you. You acted accordingly. Be sure to tell the FHC or judge the following:
You gave DSHS all the information asked for.
You did not know DSHS made a mistake.
You thought you were eligible for the benefits you got, and you spent them.
It was reasonable for you to rely on DSHS.
Your reliance must have been reasonable. In most cases it will have been. Eligibility rules and benefits computations are complicated, can be confusing, change often, and sometimes do not make much sense, especially if no one has explained them to you. So it is usually reasonable for a recipient to expect DSHS to do its job right and to give him/her the right amount of cash, food or medical benefits.
You need to show you would be harmed if DSHS can now claim that you owe the money or food stamps. You need to show that you cannot afford to pay back the money or to have your benefits lowered. You also need to show that you planned your finances in the belief that you were entitled to the extra benefits you got, or you can show that you used them to buy something that you would not have bought otherwise.
Some examples of injury are:
You bought more nutritious food items. If you had not gotten the extra benefits, you would have bought cheaper items or you would have gone to the food bank more often that month.
You bought new shoes or clothing for your children instead of used, or you bought a birthday present for a household member, or you took the family to a special event. You would not have been able to spend money this way if you had known you were not eligible for the extra benefits you got.
If DSHS gave you medical care that it now says you were not eligible for, you may have gotten medical help that you would not otherwise have sought. Example: instead of going to the doctor, you might have chosen to go to a neighborhood clinic where the same service was free or cheaper.
You must give the FHC or the judge as many examples as possible of the ways in which you used the benefits which you would not have done if DSHS had not issued them to you by mistake.
You need to show two things to meet this element:
(1) You cannot afford to repay the overpayment, and
(2) You were not responsible in any way for the overpayment.
To show the first, tell the judge what your income and expenses are. Make a list of all your expenses to show that you need all of your income to keep up a very basic level of living. The list should show that you spent all your income on necessities such as shelter, food, clothing, toiletries, household maintenance and operations, and transportation. If your reasonable expenses use up all of your income, you cannot afford to repay the overpayment.
To prove the second part of this, you must show that you were totally without fault or knowledge that you were overpaid. Point out to the judge that you provided the correct information to DSHS and that you had no reason to know that you were not eligible for the benefits you got.
You will not have to do much to meet this element. The judges know that it does not harm DSHS's functions to stop it from collecting overpayments. They have found that it can actually improve governmental function by encouraging DSHS to be more careful in awarding benefits. The fair hearing coordinators have been instructed that collection of overpayments does not hurt DSHS's function.
Point out that you reported everything to DSHS timely and accurately, and that DSHS should be expected to do its job timely and accurately. Tell the judge that it is DSHS's responsibility to determine eligibility and to see that errors do not occur, not yours. You did your part in reporting information, changes, and so on. DSHS should be expected to do its part.
Apply online with CLEAR*Online - http://nwjustice.org/get-legal-help
- Call CLEAR at 1-888-201-1014
CLEAR is Washington's toll-free, centralized intake, advice and referral service for low-income people seeking free legal assistance with civil legal problems.
Outside King County: Call 1-888-201-1014 weekdays from 9:10 a.m. until 12:25 p.m. CLEAR works with a language line to provide interpreters as needed at no cost to callers. If you are deaf or hard of hearing, please call 1-888-201-1014 using your preferred TTY or Video relay service.
King County: Call 211 for information and referral to an appropriate legal services provider Monday through Friday from 8:00 am – 6:00 pm. You may also call (206) 461-3200, or the toll-free number, which may be useful when calling from a pay phone, 1-877-211-WASH (9274). 211 works with a language line to provide interpreters as needed at no cost to callers. Deaf and hearing-impaired callers can call 1-800-833-6384 or 711 to be connected to a relay operator at no cost, who will then connect them with 211. Information on legal service providers in King County may also be accessed through 211's website at www.resourcehouse.com/win211/.
Persons 60 and Over: Persons 60 or over may call CLEAR*Sr at 1-888-387-7111, regardless of income.
This publication provides general information concerning your rights and responsibilities. It is not intended as a substitute for specific legal advice. This information is current as of May 2013.
© 2013 Northwest Justice Project — 1-888-201-1014
(Permission for copying and distribution granted to the Alliance for Equal Justice and to individuals for non-commercial purposes only.)