Yesawich Jr., J. (concurring in part and dissenting in part). While I agree with the majority’s holding that the 1983 amendment to Labor Law § 597 (4) restored respondent’s common-law right of setoff, I also believe that respondent’s recoupment policy is a rule within the meaning of, and subject to, the provisions of the State Administrative Procedure Act (hereinafter SAPA), with which respondent has failed to comply-
Initially, I disagree with the majority’s conclusion that petitioner is not aggrieved by respondent’s implementation of the setoff policy. The agency’s imposition of a blanket 50% setoff rate directly affects the rights of those the agency is designed to serve, in that it lessens the actual amount of money that a claimant will receive of the benefit to which he or she is statutorily entitled. For certain individuals, the ensuing decrease in payments may completely frustrate the major purpose of the unemployment insurance program, which is to furnish a financial cushion against the "crushing force” of involuntary unemployment (see, Labor Law § 501). The statutorily established public policy of this State dictates that certain levels of assistance be provided to those in need. Agency action which, as here, arbitrarily reduces that assistance manifestly renders the party whose payments are thereby decreased "aggrieved” as a consequence.
As to the merits, I am of the view that although respondent has a substantive right to setoff, such a substantive right— regardless of whether it is a product of a statute or the common law—is separate and distinct from the agency’s authority to effect a particular implementation of that right, which is circumscribed by SAPA. The particular implementation chosen by respondent in this case, a 50% across-the-board withholding, plainly fits the definition of a "rule” set forth in SAPA (see, Matter of Roman Catholic Diocese v New York State Dept. of Health, 109 AD2d 140, 147 [Levine, J., dissenting in part], revd, on dissenting opn below 66 NY2d 948); it is a " 'preset, rigid numerical policy’ ” (supra, at 147, quoting Matter of Sturman v Ingraham, 52 AD2d 882, 885), and therefore must be promulgated in accordance with the notice, comment and filing procedures outlined in State Administrative Procedure Act § 202. Furthermore, because this rule *910directly affects benefit payments, it clearly involves more than merely the internal management of the agency (compare, Matter of Krauskopf v Perales, 139 AD2d 147, 149-151, affd 74 NY2d 730). Inasmuch as the record does not reflect that the rulemaking procedures dictated by SAPA were observed, respondent’s 50% setoff rule is, in my judgment, invalid, and its application to petitioner is arbitrary and capricious.
Accordingly, I would reverse the judgment, grant the petition to the extent of declaring respondent’s policy of withholding 50% of benefits invalid, and order respondent to redetermine petitioner’s benefits after taking into account the facts and circumstances of her individual situation at the time the benefits were payable.
Ordered that the judgment is affirmed, without costs.