Anderson v. Heckler, 83-1322

• Decision Date: 14 February 1984
• Docket Number: No. 83-1322,83-1322
• Citation: 726 F.2d 455
• Parties: , Unempl.Ins.Rep. CCH 15,135 Mary Jo ANDERSON, Appellant, v. Margaret M. HECKLER, Secretary, Health & Human Services, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 455

726 F.2d 455

4 Soc.Sec.Rep.Ser. 113, Unempl.Ins.Rep. CCH 15,135

Mary Jo ANDERSON, Appellant, v. Margaret M. HECKLER, Secretary, Health & Human Services, Appellee.

No. 83-1322.

United States Court of Appeals Eighth Circuit.

Submitted Nov. 14, 1983.

Decided Feb. 14, 1984.

Evan L. Hultman, U.S. Atty., Thomas G. Schrup, Asst. U.S. Atty., N.D. Iowa, Cedar Rapids, Iowa, for appellee; Paul P. Cacioppo, Regional Atty., Region VII, Bruce R. Granger, Deputy Regional Atty., Dept. of Health and Human Services, Kansas City, Mo., of counsel.

Dennis Groenenboom, Legal Services Corp. of Iowa, Cedar Rapids, Iowa, for appellant.

Before LAY, Chief Judge, ROSS and BOWMAN, Circuit Judges.

LAY, Chief Judge.

On May 17, 1978, Mary Jo Anderson (plaintiff) applied for disabled child benefits under Title II of the Social Security Act, 42 U.S.C. Secs. 401-433 (1976 & Supp. V 1981). ¹ Ms. Anderson's application was denied throughout the administrative appeal process. Thereafter, she sought judicial review of the denial. On July 13, 1981, the district court, the Honorable Edward J. McManus presiding, remanded the case to the Social Security Administration for further consideration. On October 23, 1981, a new hearing was provided before an Administrative Law Judge (ALJ). The ALJ recommended denial of benefits; the Social Security Appeal's Council adopted the ALJ's decision. Ms. Anderson again appealed to the district court; the court found that substantial evidence on the record as a whole existed to support the determination to deny benefits. This appeal followed.

Mary Jo Anderson was born on September 16, 1945. Since an undetermined date, Ms. Anderson has suffered from chronic undifferentiated schizophrenia with paranoia. She has always resided at her parents' home and is currently receiving Supplemental Security Income benefits. ² Ms. Anderson has worked at two jobs relevant to this appeal: as a sales clerk in Armstrong's Department Store in Cedar Rapids, Iowa; and then as a clerk-typist for Iowa Electric Light and Power Company.

To be eligible for disabled child benefits, a claimant must prove that he or she is under a disability that began before age 22 and existed at the time of the claimant's application for benefits. 42 U.S.C. Sec. 402(d)(1)(B)(ii). A claimant is "under a disability" if the claimant is unable to engage in substantial gainful activity by reason of any medically determinable mental or physical impairment that has lasted or can be expected to last for 12 months or more. 42 U.S.C. Sec. 423(d)(1)(A). The disability must be continuous from before age 22 until the claimant's application. Futernick v. Richardson, 484 F.2d 647, 648 (6th Cir.1973). Thus, if Ms. Anderson at any time since her 22nd birthday has engaged in substantial gainful activity, she is not disabled within the meaning of the statute and is not entitled to disabled child benefits. ³

The regulations covering disability benefits provide that if the applicant's "earnings averaged more than $200 a month in calendar years prior to 1976" and "more than $230 a month in calendar year 1976" the Secretary will consider the applicant to have engaged in substantial gainful activity. 20 C.F.R. Sec. 404.1574(b)(2)(i) & (ii) (1982). This presumption may be rebutted by evidence of the nature of the applicant's work, the adequacy of the applicant's performance, and the time the applicant spent in work. 20 C.F.R. Sec. 404.1573 (1982).

The ALJ found that while at Armstrong's, Ms. Anderson earned $705.03 during the two and one half months worked in 1972; $1,838.67 during the seven months worked in 1973; and $2,062.84 during the five months worked in 1974. During Ms. Anderson's employment at Iowa Electric, she earned $3,962.85 in 1975 for eight months of work and $4,826.42 in 1976 for eleven months of work. Both the ALJ and the district court averaged Ms. Anderson's earnings for a given year over the months worked in that year. Using this method, Ms. Anderson's earnings at Armstrong's each year exceeded the amounts that create a presumption of substantial gainful activity. Given this presumption and the evidence of Ms. Anderson's satisfactory work record, the ALJ concluded that Ms. Anderson had engaged in substantial gainful activity during her period of claimed disability. On appeal, Ms. Anderson challenges the ALJ's method of computing her average earnings. Ms. Anderson contends that the total earnings for each year should have been averaged over the full calendar year of 12 months. Using this method, Ms. Anderson's earnings at Armstrong's would not create a presumption of substantial gainful activity. ⁴

The Secretary argues that the regulation requires that the applicant's earnings be averaged over only the months worked. We recognize that an agency's interpretation of its own regulation should be followed unless there are compelling indications that it is wrong. E.I. duPont de Nemours & Co. v. Collins, 432 U.S. 46, 56, 97 S.Ct. 2229, 2235, 53 L.Ed.2d 100 (1977). There is no available legislative history to guide us in the interpretation of the relevant regulations. However, a careful reading of the regulations leads us to agree with the Secretary's method of computing average earnings.

The applicable regulation provides: "The work that you have done during any period in which you believe you are disabled may show that you are able to do work at the substantial gainful activity level. If you are able to engage in substantial gainful activity, we will find that you are not disabled." 20 C.F.R. Sec. 404.1571 (1982). Under the regulation, a determination that an applicant has in the past engaged in substantial gainful activity does not purport to be a determination that the applicant is now or ever has been capable of maintaining this level of financial support. Instead, it is a determination that, for a specific time during the period in which the applicant claims to have been disabled, the applicant was able to engage in substantial gainful activity and thus was not, during that time, continuously disabled. Because an applicant is required to show that he or she was continuously disabled, a determination that the applicant engaged in substantial gainful activity defeats the claim for benefits.

A proper reading of the regulation requires that the decision maker average the wages earned by the applicant over the time employed to determine whether during that time the applicant was capable of substantial gainful activity. This method of averaging gives a truer reading of the applicant's capabilities. The plaintiff's method of averaging her wages received during a calendar year over all the months in that year, whether plaintiff was employed during those months or not, circumvents the purpose for determining whether an applicant engaged in substantial gainful activity. A determination of average earnings using the plaintiff's method would not tell us whether an applicant was "capable" of substantial gainful activity but whether the applicant was capable of earning, for that year, a substantial income. ⁵

We also note that the regulation is written in terms of "earnings averaged more than $200 a month." If plaintiff were correct in her assertion that an applicant's...