7 On Your Side: FEMA wants Superstorm Sandy assistance money back

LINDENHURST (WABC) -- A 65-year-old retiree from Long Island who lost everything during Superstorm Sandy was facing an uncertain financial future after FEMA informed her that she'd have to repay all the assistance money she received.

Living off a fixed Social Security income didn't offer much room to pay back thousands of dollars to the government, so she turned to 7 On Your Side.

"It still looks the same as when I left," Ann Minicozzi said. "All the debris is still here from the fire."

First came the flood, and then the fire, which meant getting a disaster assistance letter from FEMA was a lifeline for Minicozzi.

"I had nothing," she said. "I didn't even have a bed. The first place I rented, I was sleeping on the floor."

She qualified for help since her apartment and everything in it was gone after Sandy's surge left Lindenhurst under water for days.

"The military was on the street," she said. "We weren't even allowed to walk down the street, then we could walk down, but not allowed to take anything out. So a week had passed, and by the time you got into the house, everything was mold. There was no salvaging anything."

But almost three years later, that desperate feeling was back, as Ann feared being homeless once again after she was told to pay back the assistance FEMA gave her.

"I was sick, how am I going to repay this," she said.

She received a letter saying FEMA had reviewed Ann's case and determined she was not entitled to any compensation, attempting to claw back nearly $7,000 that Ann had used to pay rent.

"I though my life was over," she said. "How am I going to afford this when my income is Social Security? That's a lot of money years later."

She sent in an appeal last year attaching her lease and proof she had been paying rent she could barely afford on her benefits.

"I was paying $650," she said. "Now I'm paying $800, and my Social Security is $1,470 a month."

A year later, FEMA sent not one but two confusing clawback letters.

"I did do an appeal, and they're saying my appeal is denied," she said. "Then I have another letter saying I never appealed."

So we asked FEMA to take yet another look at the case, and two days later she got a different letter.

"All collection activity has ceased," she said. "And I thank you so much."

Her entire debt was canceled. Citing privacy, FEMA wouldn't discuss why, but Ann doesn't have to pay back a dime.

"Thank you so much," she said. "Anyone who has a problem, get in touch with you. Thank you so much."