69 F.3d 614 (1st Cir. 1995), 95-1230, Parisi by Cooney v. Chater

Docket Nº:95-1230.
Citation:69 F.3d 614
Party Name:Unempl.Ins.Rep. (CCH) P 14853B Anthony PARISI, II, a minor, by his Parent and Natural Guardian, Lorralee COONEY, Plaintiff, Appellee, v. Shirley S. CHATER, Commissioner of Social Security, Defendant, Appellant.
Case Date:November 08, 1995
Court:United States Courts of Appeals, Court of Appeals for the First Circuit
 
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Page 614

69 F.3d 614 (1st Cir. 1995)

Unempl.Ins.Rep. (CCH) P 14853B

Anthony PARISI, II, a minor, by his Parent and Natural

Guardian, Lorralee COONEY, Plaintiff, Appellee,

v.

Shirley S. CHATER, Commissioner of Social Security,

Defendant, Appellant.

No. 95-1230.

United States Court of Appeals, First Circuit

November 8, 1995

Heard Sept. 15, 1995.

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[Copyrighted Material Omitted]

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Steve Frank, United States Department of Justice, with whom Frank W. Hunger, Assistant Attorney General, Donald K. Stern, United States Attorney, and William Kanter, United States Department of Justice were on brief, for appellant.

Sandra L. Smales, with whom Raymond Cebula was on brief, for appellee.

Before STAHL, Circuit Judge, CAMPBELL, Senior Circuit Judge, and LYNCH, Circuit Judge.

LYNCH, Circuit Judge.

In 1991 when Anthony Parisi, II ("Anthony") was nine years old, the Social Security Administration reduced the amount he was receiving in dependent child's benefits on account of his disabled father Anthony Parisi ("Parisi") from $464 a month to $262 a month. The purported justification for the reduction is a provision in the Social Security Act ("SSA") that sets a maximum amount that can be paid out on a single wage earner's account. If the benefits paid on that account exceed the maximum, a reduction is required to comply with the cap. The cap was exceeded in this case, the agency says, when Parisi's wife (who is not Anthony's mother and with whom Anthony does not live) was deemed "entitled" under one subsection of the statute to spousal benefits on Parisi's account. Another part of the same section of the statute, however, prohibited any portion of those benefits from actually being paid to her. The question is whether those spousal "benefits," which were never actually payable, were properly counted toward the family maximum cap. We conclude that they were not and accordingly affirm the district court's reversal of the agency's determination.

I. Factual Background

While married to Adriana Parisi, Anthony Parisi, a fisherman, had a child, Anthony Parisi, II, with Lorralee Cooney of Gloucester, Massachusetts. Anthony lives with Ms. Cooney, who has sole custody of him and brings this action on his behalf.

In February 1988, Parisi became disabled, and he and Anthony, as his dependent, started receiving payments on his account as a wage earner. 1 In 1991, Adriana Parisi applied for and became eligible for early retirement ("old-age") benefits under the SSA based on her own wage-earner's record. By operation of the statute, she was automatically deemed also to have applied for and to qualify for spousal benefits on Parisi's account. See 42 U.S.C. Sec. 402(r)(1). However, because the benefits to which Adriana was entitled on her own account exceeded the spousal benefits for which she qualified on her husband's account, it was determined that she could be paid benefits only on her own account.

The agency also decided, however, that Adriana's spousal benefits--even though not actually payable to her or anyone else--still had to be counted toward the SSA's statutory limit (the "family maximum") on benefits available on a single worker's record. Because the benefits Anthony was already receiving, when combined with Parisi's own benefits and Adriana's (non-payable) spousal benefits, exceeded the statutory maximum amount, the agency reduced Anthony's dependent benefits. Lorralee Cooney was so notified. On reconsideration at Cooney's request, the agency reaffirmed its decision to reduce Anthony's benefits.

The agency's determination was appealed to an administrative law judge ("ALJ"), who concluded that Adriana's non-payable spousal benefits should not be counted toward the

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family maximum. The agency appealed the ALJ's decision to the Social Security Appeals Council, which reversed the ALJ. The Appeals Council's decision was appealed to the district court. See 42 U.S.C. Sec. 405(g). The agency argued that under the plain language of the SSA, calculation of the family maximum includes all "entitlements," not just entitlements that result in actual payment. The district court disagreed. It concluded that the SSA's "family maximum" cap on benefits was meant to include only "effective entitlements" (entitlements that result in some actual payment), not "conditional entitlements," and that because Adriana Parisi's spousal benefits were only conditional (upon her not being entitled to a larger benefit on her own wage-earner's account), they were not properly counted toward the family maximum.

II. Relevant Statutory Provisions

The two statutory provisions primarily at issue are 42 U.S.C. Sec. 403(a) and 42 U.S.C. Sec. 402(k)(3)(A). The former contains the "family maximum" provision and the latter is the provision that prevents Adriana Parisi from being actually paid any spousal benefits on the basis of Parisi's work record (which she would otherwise have received under section 402(b)(1)). Section 403(a) provides in pertinent part as follows:

... [T]he total monthly benefits to which beneficiaries may be entitled under section 402 or 423 of this title for a month on the basis of the wages and self-employment income of [an] individual [wage-earner] shall ... be reduced as necessary so as not to exceed [the maximum amount set by statute].

42 U.S.C. Sec. 403(a)(1). And section 402(k)(3)(A) provides in relevant part:

If an individual is entitled to an old-age or disability insurance benefit for any month and to any other monthly insurance benefit for such month, such other insurance benefit for such month, after any reduction ... under section 403(a) of this title, shall be reduced, but not below zero, by an amount equal to such old-age or disability insurance benefit....

42 U.S.C. Sec. 402(k)(3)(A).

The parties agree that, because the monthly amount of Adriana Parisi's old-age benefits on her own work record exceeds the amount of spousal benefits she could be paid on her husband's record under section 402(b)(1), section 402(k)(3)(A) has the result of reducing to zero the payable amount of Adriana Parisi's spousal benefits. It is also agreed that Adriana's own old-age benefits, as well as Parisi's benefits, are not subject to reduction under section 403(a). Thus the only payable benefits at stake are Anthony's. 2 The statutory issue is whether the amount of "total monthly benefits to which beneficiaries may be entitled" for purposes of section 403(a) must include what the monthly amount of Adriana's spousal benefits would have been under section 402(b)(1) but for the operation of section 402(k)(3)(A) of the statute. If Adriana's non-payable spousal benefits are included in the family maximum calculation, then Anthony's benefits were properly reduced. If not, then the district court's judgment must be affirmed.

III. Discussion

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