Altschuld v. Comm'r of Soc. Sec., CASE NO. 1:17-CV-1959

• Decision Date: 14 August 2018
• Docket Number: CASE NO. 1:17-CV-1959
• Parties: GLENN ALTSCHULD, Plaintiff, v. COMMISSIONER OF SOCIAL SECURITY, Defendant.
• Court: U.S. District Court — Northern District of Ohio

GLENN ALTSCHULD, Plaintiff,
v.
COMMISSIONER OF SOCIAL SECURITY, Defendant.

CASE NO. 1:17-CV-1959

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO WESTERN DIVSIION

August 14, 2018

JUDGE JAMES S. GWIN

MAGISTRATE JUDGE THOMAS M. PARKER

REPORT & RECOMMENDATION

I. Introduction

Plaintiff, Glenn Altschuld, a pro-se litigant, seeks judicial review of the Commissioner of Social Security's application of the government pension offset ("GPO") provisions of the Social Security Act to his widower's benefits. He asserts that the offset provisions violate the Fifth and Fourteenth Amendments to the United States Constitution. This matter is before the court pursuant to 42 U.S.C. §405(g), 42 U.S.C. §1383(c)(3) and Local Rule 72.2(b).

Because the Commissioner correctly applied the GPO provisions and because they do not violate the U.S. Constitution, I recommend that the final decision of the Commissioner be AFFIRMED.

II. Statement of Facts

The facts of this case are not in dispute. Glenn Altschuld worked both in private sector employment and as a public school teacher prior to retirement. ECF Doc. 18 at Page ID# 63. He retired in 1991 and began receiving a pension from the Ohio State Teachers' Retirement System

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("STRS"). Id. A year later, he began receiving Social Security benefits. Id. His Social Security benefits are subject to the GPO, a fact that he does not challenge. Id.

Glenn Altschuld was married to Audrey Altschuld. (Tr. 19) Mrs. Altschuld worked in private employment. After retirement, she collected Social Security retirement benefits until she died on July 31, 2012. ECF Doc. 18 at Page ID# 63. On August 28, 2012, Altschuld filed for widower's insurance benefits. (Tr. 19)

On September 16, 2012, the Social Security Administration informed Mr. Altschuld that he was entitled to widower's benefits but, because these benefits would be less than two-thirds of his monthly pension payment, the GPO reduced his widower's benefits to zero. (Tr. 24-27) Mr. Altschuld requested reconsideration of the administration's determination. (Tr. 29-31) On reconsideration, the administration affirmed the initial decision that the GPO provision of the Social Security Act had been correctly applied to Mr. Altschuld's widower's benefits. (Tr. 38-40)

Altschuld requested a hearing, and Administrative Law Judge ("ALJ") Susan Giuffre heard the case on February 18, 2015. (Tr. 66-78) At the hearing, Altschuld and his attorney argued that the GPO violated his deceased wife's constitutional rights because the offset was applied to benefits she earned during her lifetime. (Tr. 70-71)

On March 19, 2015, ALJ Giuffre made the following findings:

1. The Government Pension Offset (GPO) Provisions of the Social Security Act were correctly applied to the claimant's Widower's Insurance Benefits. (Tr. 10)

2. The exceptions to the GPO provisions do not apply in this case. (Tr. 11)

3. Widower's Insurance Benefits are not payable to the claimant because the GPO provisions were properly applied. (Tr. 11)

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III. Law & Analysis

In this Social Security appeal, Altschuld raises constitutional challenges to the GPO provisions of the Social Security Act. In the context of Social Security appeals, this court's review is limited to determining whether there is substantial evidence in the record to support the ALJ's findings of fact and whether the correct legal standards were applied. See Elam v. Comm'r of Soc. Sec., 348 F.3d 124, 125 (6th Cir. 2003) ("decision must be affirmed if the administrative law judge's findings and inferences are reasonably drawn from the record or supported by substantial evidence, even if that evidence could support a contrary decision."); Kinsella v. Schweiker, 708 F.2d 1058, 1059 (6th Cir. 1983). However, in this case, Altschuld does not dispute the findings of fact or even the ALJ's application of the law. Rather, he challenges the constitutionality of the GPO as applied to him. As will be developed more fully below, the issues raised by Altschuld's appeal have already been decided by the U.S. Supreme Court, and this court does not have the authority to ignore or undo the our highest court's controlling decisions.

A. Social Security Law

State and local government employers that provide their employees with retirement benefits are not required to participate in Social Security. 42 U.S.C. § 410(a)(7). If a state governmental entity provides retirement benefits to its employees and does not participate in Social Security, its employees are "noncovered"; they pay no Social Security taxes on their earnings. 42 U.S.C. § 410(a)(7)(F). Alternatively, individuals employed by private employers and government employers that have agreed to participate in Social Security are "covered," and both employee and employer are required to pay Social Security taxes. 42 U.S.C. § 410(a)(7)(A), 418. People who change jobs or work multiple jobs may have both covered and noncovered earnings during a career.

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Congress initially created widower's (and spousal and widow) benefits in the 1930s to provide support to individuals who stayed home to raise a family and were, as a result, financially dependent on the working spouse. GOVERNMENT PENSION OFFSET, SSA Publication No. 05-10007. When both spouses worked outside the home, a widower's benefits are offset by the amount of the individual's own retirement benefit. 42 U.S.C. § 402(k)(3)(A). This calculation is relatively easy when an individual always worked in covered employment: his own Social Security retirement benefit is subtracted from any Social Security widower's benefit to which he is entitled. 42 U.S.C. § 402(k)(3)(A); (Tr. 40). But, when an individual receives a pension for noncovered work, the Social Security retirement benefit does not reflect his total retirement benefit. The GPO was enacted to take into account the additional government pension for noncovered work. GOVERNMENT PENSION OFFSET, SSA Publication No. 05-10007. The GPO, as it currently functions, decreases an individual's widower's benefit amount by two-thirds of his government pension. 42 U.S.C. § 402(f)(2)(A), (k)(5)(A); 20 C.F.R. 404.408a.

Prior to 1977, the Social Security Act required a man seeking widower's benefits to prove that he had received at least one-half support from his spouse; however, women seeking benefits were not required to meet any dependency test. In March 1977, the Supreme Court held that this distinction violated the equal protection requirement of the Due Process Clause of the Fifth Amendment. Califano v. Goldfarb, 430 U.S. 199, 51 L. Ed. 2d 270, 97 S. Ct. 1021 (1977). In response to this decision, Congress eliminated the dependency test, but also provided that survivor's benefits for both men and women would be offset by the full amount of any pension the claimant received as a result of employment not covered by Social Security, from a federal, state, or local government agency (pension offset provision). Pub. L. 95-216, § 334(c)(2), 91 Stat. 1544, 1545, which states, in pertinent part:

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The amount of a widow's insurance benefit . . . shall be reduced (but not below zero) by an amount equal to the amount of any monthly periodic benefit payable to such widow (or surviving divorced wife) for such month which is based upon her earnings while in the service of the Federal Government or any State (or any political subdivision thereof. . .) if, on the last day she was employed by such entity, such service did not constitute "employment" as defined in section 210.

The Secretary implemented 20 C.F.R. § 404.408a to clarify when reduction of spousal benefits is required. The regulation states, in pertinent parts:

(a) When reduction is required. Unless you meet one of the exceptions in paragraph (b) of this section, your monthly Social Security benefits as a wife, husband, widow, widower, mother, or father will be reduced each month you are receiving a monthly pension from a Federal, State, or local government agency (Government pension) for which you were employed in work not covered by Social Security on the last day of such employment. . .

(e) When effective. This reduction was put into the Social Security Act by the Social Security Amendments of 1977. It only applies to applications for benefits filed in or after December 1977 and only to benefits for December 1977 and later.

B. Application

The GPO applies to...