Robinson v. Bowen

• Decision Date: 08 January 1987
• Docket Number: No. 85 Civ. 0450 (EW).,85 Civ. 0450 (EW).
• Citation: 650 F. Supp. 1495
• Parties: Marie ROBINSON, Plaintiff, v. Otis R. BOWEN, M.D., Secretary of Health and Human Services, Defendant.
• Court: U.S. District Court — Southern District of New York

650 F. Supp. 1495

Marie ROBINSON, Plaintiff, v. Otis R. BOWEN, M.D., Secretary of Health and Human Services, Defendant.

No. 85 Civ. 0450 (EW).

United States District Court, S.D. New York.

January 8, 1987.

Westchester Legal Services, Inc., Senior Citizens Law Clinic, White Plains, N.Y., for plaintiff; Marianne Artusio, of counsel.

Rudolph W. Giuliani, U.S. Atty., S.D. N.Y., New York City, for defendant; Mark S. Sochaczewsky, Sp. Asst. U.S. Atty., Annette H. Blum, Regional Atty., — Region II, Linda Riffkin, Asst. Regional Atty., Office of the General Counsel, Dept. of Health and Human Services, of counsel.

OPINION

EDWARD WEINFELD, District Judge.

Plaintiff Marie Robinson moves for class certification and for summary judgment in her action seeking to invalidate a Social Security Administration ("SSA") regulation which counts, as income, payments from other agencies which are withheld by the agencies to repay prior overpayments.¹ Defendant Otis R. Bowen, Secretary of the Department of Health and Human Services (the "Secretary"), moves for judgment on the pleadings. Both parties agree that there are no factual issues in dispute and the matter is ripe for disposition.

Plaintiff, prior to 1981, was receiving monthly widow's benefits from the Veteran's Administration ("VA"), as a Veteran's Widow. On May 1, 1981, upon reaching age sixty, she additionally became entitled to receive benefits under Title II of the Social Security Act based upon her deceased husband's earning record. Plaintiff failed to report these additional benefits to the VA until November 3, 1981. As a result of this failure, the payment of plaintiff's VA benefits were not reduced as they should have been and she was overpaid VA benefits in the amount of $1536.² Plaintiff's request for a waiver of the overpayment was denied by the VA because it was determined there was "material failure" by plaintiff in causing the overpayments.

To recover the overpayment, the VA, beginning in April, 1982, withheld plaintiff's monthly VA payments which were then applied toward satisfaction of the debt. When the recoupment began, plaintiff's monthly benefits were $23; in June 1982 they were increased to $39; they were increased again in January 1984 to $40; and finally, in January 1985 to $42. The total amount due to the VA was fully repaid in October 1985. Commencing in November 1985, the VA sent plaintiff the monthly amount to which she was entitled, and since that time she has been receiving the full amount of her VA benefits without deduction.

In June 1983, plaintiff applied for Supplemental Security Income ("SSI") benefits. This application was denied in September 1983; however, on January 4, 1985, an Administrative Law Judge determined that plaintiff was disabled within the meaning of the Social Security Act and awarded her SSI payments retroactive to the date of her application. Plaintiff's SSI award was computed according to a Social Security Administrative decision to treat plaintiff's withheld VA benefit payments as monthly income under the SSA regulation, 20 C.F.R. § 416.1123(b)(1). This decision was upheld by an Administrative Law Judge and then by the Social Security Appeals Council.

The crux of this controversy centers about whether the VA benefits that were withheld from plaintiff were properly included in computing her income and resources, even though she did not actually receive those payments in hand, for purposes of determining the amount of monthly SSI payments to which she was entitled.

Discussion

Plaintiff contends that the SSA regulation which provides for including payments withheld as income in computing the amount of her SSI benefits is invalid. She argues that it conflicts with 42 U.S.C. § 1382(a)(2)(B) because payments withheld to repay a prior overpayment are not "payments received" as provided for in the definition of income in that section, and therefore should not be included as income when calculating either SSI eligibility or the amount of benefits. Plaintiff also argues that the regulation violates Congress' intent in enacting 42 U.S.C. § 1383(b)(1)(B), of the Deficit Reduction Act of 1984, which limits the withholding of SSI overpayments to 10 percent of the recipient's total "income" for the month. Finally, plaintiff contends that the regulation violates plaintiff's equal protection rights because there is no rational basis for a scheme in which SSI recipients who have received overpayments of SSI benefits are guaranteed at least 90% of the SSI standard, while SSI recipients who have received overpayments from other agencies are not similarly protected.

SSI eligibility and the amount of SSI benefits are based on a beneficiary's earned and unearned income. Under the Social Security Act:

(2) unearned income means all other income, including —

(A) support and maintenance furnished in cash or kind....

(B) any payments received as an annuity, pension, retirement, or disability benefit, including veterans' compensation and pensions, workmen's compensation payments, old-age, survivors, and disability insurance benefits, railroad retirement annuities and pensions, and unemployment insurance benefits;

(C) prizes and awards;

(D) the proceeds of any life insurance policy to the extent that they exceed the amount expended by the beneficiary for purposes of the insured individual's last illness and burial or $1,500, whichever is less;

(E) gifts (cash or otherwise), support and alimony payments, and inheritances; and

(F) rents, dividends, interest, and royalties.³

Plaintiff contends that the SSA's regulation defining the amount "considered as income" conflicts with the intent of Congress to count the items listed in § 1382a(a)(2)(B) as income only if they are actually received because withheld payments are not actually received in hand. The regulation at issue, which was promulgated in 1982 in place of a prior regulation, provides in pertinent part:

(b) Amount considered as income. We may include more or less of your unearned income than you actually receive.

(1) We include more than you actually receive where another benefit payment (such as a social security insurance benefit) ... has been reduced to recover a previous overpayment. You are repaying a legal obligation through the withholding of portions of your benefit amount, and the amount of your debt reduction is also part of your unearned income. Exception: We do not include more than you actually receive if you received both SSI benefits and the other benefits at the time the overpayment of the other benefit occurred and the overpaid amount was included in figuring your SSI benefit.⁴

The Social Security Act authorizes the Secretary of Health and Human Services to "make and publish such rules and regulations, not inconsistent with this chapter, as may be necessary to the efficient administration" of his functions.⁵ Therefore, the initial inquiries required by the parties' motions are: (1) whether the Secretary's regulation is inconsistent with the language of § 1382a(a)(2)(B) of the Congressional Act; and, if it is determined not to be inconsistent with the language of the Act, (2) whether, nevertheless, it is inconsistent with Congress' purpose in providing for SSI benefits. Our Court of Appeals has held that:

Absent evidence that a regulation issued by an agency pursuant to Congressional authority bears no reasonable relationship to the provisions of the statute being administered by the agency ... its interpretation of the statute is entitled to considerable deference. Since the agency is vested with policy-making power, it is authorized to fill in gaps that may have been left by Congress in a statute and we may not substitute our interpretation for that of the agency, so long as the agency's interpretation is `reasonably defensible.'⁶

Plaintiff is correct that because this 1982 regulation was not passed contemporaneously with the promulgation of the Statute and it conflicts with the agency's earlier policy of not including withheld benefit payments in the computation of income, the court is more reluctant to defer to the agency's interpretation.⁷ However, the agency's interpretation here is clearly still entitled to some deference.⁸

Statutory Language

Congress did not address the precise question of whether benefits from other programs that are withheld to recoup overpayments constitute income within the definition of "unearned income." While the Act does not include such recoupments in its list of exclusions from income,⁹ it does, in defining items which are included as "unearned income," specifically provide in subsection (a)(2)(B) that "any payments received ... including veterans' compensation" are such income. However, in the context of the statutory provision, the Secretary appears to be correct in interpreting the term "received" as not prohibiting the inclusion in income of monies that are not actually received in hand but rather are applied to a previous overpayment. The term "received" appears only in subsection (a)(2)(B) of § 1382a(a)(2); if Congress had specifically intended the use of the term "received" in subsection (a)(2)(B) to impose a condition of actual receipt on the items enumerated in that subsection, it knew how and would have imposed such a requirement in the other subsections as well.¹⁰ Most if not all of the items contained in subsections (a)(2)(A), (C), (D), (E), and (F) are items which, under various circumstances, might be credited to, but not actually received by, a beneficiary. Therefore, it is not logical to infer that Congress' use of the term "received" in subsection (a)(2)(B) was intended to insure that those particular payments would not be included in the calculation of "earned income" unless they were actually received in hand by an individual in the literal sense of the word. If that had been the intent of Congress, surely it would have inserted "received" into all six of the subsections, or in the initial line of subsect...