Bormey v. Schweiker, 81-3315

• Citation: 695 F.2d 164
• Decision Date: 14 January 1983
• Docket Number: No. 81-3315,81-3315
• Parties: Neima BORMEY, Plaintiff-Appellant, v. Richard S. SCHWEIKER, Secretary of Health and Human Services, Defendant-Appellee. Summary Calendar.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 164

695 F.2d 164

Neima BORMEY, Plaintiff-Appellant, v. Richard S. SCHWEIKER, Secretary of Health and Human Services, Defendant-Appellee.

No. 81-3315

Summary Calendar.

United States Court of Appeals Fifth Circuit.

Jan. 14, 1983.

Agustin R. Guitart, Metairie, La., for plaintiff-appellant.

Louis J. Volz, III, Asst. U.S. Atty., New Orleans, La., for defendant-appellee.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before RUBIN, JOHNSON and GARWOOD, Circuit Judges.

GARWOOD, Circuit Judge:

This is an appeal from a summary judgment upholding the appellee's decision to reduce appellant's Supplemental Security Income benefits by one third pursuant to 42 U.S.C. Sec. 1382a(a)(2)(A), because she was living in the household of her parents and receiving support and maintenance from them. The principal question is whether this statutory one-third reduction was applicable. We hold that it was not, as to a part of the time in issue, and remand the case for further proceedings.

I.

The material facts are undisputed. Appellant Neima Bormey ("Bormey") was born on January 10, 1958. She suffers from a degenerative disease of the legs and arms, which has rendered her permanently disabled, and she lives at home with her parents and two sisters. In July 1974, the district office of the Social Security Administration determined that Bormey was eligible for full Supplemental Security Income ("SSI") benefits as a disabled child. The administrative record shows that Bormey was paid full benefits because her parents told the district office that they had no income.

On November 8, 1977, when Bormey was 19, she made an application with the district office to be made the payee of her SSI benefits. On November 10, 1977, the district office, having learned that her father had worked and earned income as a painter for the past five years, notified Bormey that her SSI benefits were being suspended effective December 1977. The district office maintained that she was ineligible to receive those benefits because her father's income was deemable to her since she was under 21 and a student.

Bormey, who was represented by counsel and continued to be throughout all the subsequent administrative proceedings, requested a hearing before an administrative law judge ("ALJ"). On August 19, 1978, the ALJ ordered reinstatement of her benefits. He found that Bormey was an adult, and was not a regular student, and that, as such, her father's income was not deemable to her. ¹ No party has challenged this determination. The ALJ remanded the case to the district office for recalculation of benefits.

On October 2, 1978, the district office, following the August 1978 remand by the ALJ, determined that because Bormey was not contributing any money toward the household expenses, she was living in the household of her parents and receiving support and maintenance from them, and that accordingly the SSI benefits payable to her commencing in December 1977 must be reduced by one third pursuant to 42 U.S.C. Sec. 1382a(a)(2)(A) and the then implementing regulation, 20 C.F.R. Sec. 416.1125 (now sections 416.1130-416.1145).

Bormey had been paid no SSI benefits during the period December 1977 through September 1978. In October 1978, she was paid in a lump sum ($1,208.58) benefits, reduced by one third on account of the support and maintenance she had received, for that period, and monthly payments to her were resumed at the rate of $126.27, also reflecting the one-third reduction. ²

On January 22, 1979, Bormey requested another hearing before an ALJ. At this hearing, which was held on May 7, 1979, both Bormey and her father testified that before her benefits were terminated, she contributed $100 a month toward the household expenses; that she lived in her parents' house with her mother and father and two sisters; that during the time her benefits were terminated, she had no income and was therefore unable to make any contributions; that after her benefits were resumed in October 1978, she again contributed $100 a month to the household expenses; that monthly household expenses totaled $697.10, of which $400 was for food and the balance for mortgage payments and utilities; that her pro rata share of the total household expenses was $139 per month; and that were she to receive full benefits, she would pay her pro rata share of all the household expenses.

The ALJ held that the one-third statutory reduction in Bormey's benefits was proper, and his decision was affirmed by the Administration's Appeals Council, thus becoming a final decision of the appellee, the Secretary of Health, Education, and Welfare (now the Secretary of Health and Human Resources), who administers the SSI program.

Having exhausted her administrative remedies, Bormey filed suit against the appellee in federal district court under 42 U.S.C. Sec. 405(g) seeking judicial review of the adverse decision. Both parties filed motions for summary judgment. The district court referred the matter to a magistrate, who conducted a hearing and recommended that appellee's motion for summary judgment be granted. The district court accepted the magistrate's recommendation and rendered summary judgment for appellee. ³

II.

Our review is ordinarily limited to determining whether the record as a whole contains substantial evidence to support the appellee's findings. Thomas v. Schweiker, 666 F.2d 999, 1001 (5th Cir.1982). However, we must also determine whether appellee applied the proper legal standard in reducing Bormey's SSI benefits, and whether the proceedings below were conducted in conformity with the applicable statutes and regulations. See Strickland v. Harris, 615 F.2d 1103, 1108 (5th Cir.1980); Ferran v. Fleming, 293 F.2d 568, 571 (5th Cir.1961); Chamberlain v. Schweiker, 518 F.Supp. 1336, 1338 (C.D.Ill.1981).

The first question raised by Bormey is whether, upon becoming an adult, she had a right to the standard (or full) SSI payment without regard to any support or maintenance she had received, or was receiving, from her parents before or at the time she became an adult. Bormey, in effect, argues that unearned income received by a recipient while he or she is a child cannot be used to reduce SSI benefits once the recipient becomes an adult, even though after becoming an adult that income is still being received. We disagree.

The statutes which govern the SSI program plainly show it was Congress's intent that SSI benefits be paid only to the extent an individual's minimum income level is not being met from other sources. See H.R.Rep. No. 92-231, 92d Cong., 2d Sess., reprinted in [1972] U.S.Code Cong. & Ad.News 4989, 5135-36. See also Weiss v. Schweiker, 519 F.Supp. 763, 765 (S.D.N.Y.1981). Under 42 U.S.C. Sec. 1381a, ⁴ a disabled individual's eligibility for SSI benefits is determined "on the basis of his income and resources." Under 42 U.S.C. Sec. 1382a, ⁵ income is defined as including both earned and unearned income, and unearned income includes "support and maintenance furnished in kind" to the individual. If the individual lives in the household of another and receives both maintenance and support from that person, then the amount payable to the individual is reduced by one third. 42 U.S.C. Sec. 1382a(a)(2)(A).

It has long been recognized that in questions of statutory interpretation, the construction of a statute by an agency charged with its administration is entitled to some deference. Dennard v. Richards Group, Inc., 681 F.2d 306, 315 (5th Cir.1982). The appellee has interpreted these statutes to require that an individual's income be an important factor in determining his or her initial or continuing eligibility for SSI benefits and the amount thereof. See 20 C.F.R. Secs. 416.202 and 416.203. ⁶ Eligibility for SSI benefits and the amount payable is therefore based on the actual need of the individual whether at the time he or she makes an initial application for benefits or whether he or she already receives them. It follows that the actual needs of a recipient will be considered even when he or she becomes an adult. Thus, the income received by a child, which he or she still receives after becoming an adult, will be considered in determining eligibility for, and the amount of, SSI benefits.

The "benefit anomalies" described by Bormey in her brief which may occur as a result of this construction flow from the differences in the level of generosity of the applicant's or recipient's relatives or friends, and the statute was fashioned to recognize those generosity differences in determining initial and continuing eligibility for, and the amount of, SSI benefits. See Usher v. Schweiker, 666 F.2d 652, 659 (1st Cir.1981). We hold that the unearned income being received by a recipient at the time he or she becomes an adult must be considered by the Social Security Administration in determining eligibility for, and the amount of, SSI benefits at that time.

The next question raised by Bormey is whether the unearned income, in the form of support and maintenance, received by her from her parents triggered the statutory one-third reduction in her SSI benefits.

Before October 3, 1980, the application of the statutory one-third reduction was governed by 20 C.F.R. Sec. 416.1125, which was originally adopted on January 29, 1974. 39 Fed.Reg. 3674 (1974). ⁷ This regulation was, however, amended on July 7, 1978, and subpart K of the amended regulation provided that its provisions would be effective with January 1974, unless specifically indicated to the contrary. Effective October 3, 1980, the regulation was revised and reorganized. 45 Fed.Reg. 65541 (1980). The substantive provisions, however, remain essentially the same as the 1978 version and now appear as sections 416.1130-416.1145.

Section 416.1125, as amended in 1978, was in effect when Bormey's case was heard by the ALJ in May 1979. ⁸ The ALJ, however, applied the original (1974) version, and held...