Judge stays order on erroneous refunds

A federal judge agreed to stay his order forbidding the Bush administration from reclaiming $50 million in erroneous refunds to beneficiaries after the agency responsible said it has already gotten half the money back.

Judge Henry Kennedy Jr. reversed a preliminary injunction he issued last week prohibiting the government from recouping the money pending the outcome of a lawsuit filed by two seniors’ groups. An appeal of the injunction is pending.

The administration argued that the prior order would have required them to return about $25 million that had already been repaid and would confuse the 230,000 beneficiaries who got the rebates and were told to return the money.

The plaintiffs contend that federal law entitles beneficiaries to keep the rebates if they can prove repaying them would cause financial harm.