Rosenfeld v. Secretary of Health and Human Services, CV-82-1979.

• Court: U.S. District Court — Eastern District of New York
• Writing for the Court: WEINSTEIN
• Citation: Rosenfeld v. Secretary of Health and Human Services, 563 F.Supp. 1192 (E.D. N.Y. 1983)
• Decision Date: 06 May 1983
• Docket Number: No. CV-82-1979.,CV-82-1979.
• Parties: Dorothy ROSENFELD, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.

563 F. Supp. 1192

Dorothy ROSENFELD, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.

No. CV-82-1979.

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

May 6, 1983.

The Legal Aid Society, New York City, for plaintiff; Morton B. Dicker, Arthur J. Fried, Joan Heckerling, New York City, of counsel.

Raymond J. Dearie, U.S. Atty. by Patrick B. Northup, Asst. U.S. Atty., Brooklyn, N.Y., for defendant.

MEMORANDUM AND ORDER

WEINSTEIN, Chief Judge:

Plaintiff challenges the determination of the Secretary of Health and Human Services denying her Supplemental Security Income (SSI) benefits because her imputed income was too high. The Secretary erred in attributing to the wife all money deposited in a joint bank account with her husband. The sums are small, but to this aged, sick woman they are important. The case must be remanded.

I. Facts

Dorothy Rosenfeld first inquired orally about SSI benefits on January 27, 1981; she made a formal application on February 4, 1981. At the time of her application she was 76 years old, had apparent psychiatric problems, and was residing in an adult home. She had been living with her husband of 39 years until November of 1980 when he had a heart attack. Upon his discharge from the hospital he felt that he could no longer care for his wife and placed her in the adult home.

In the first quarter of 1981 deposits were made to the Rosenfeld joint checking account as follows:

Date       Amount    Source of Money Deposited
                1/2/81     $683.80   Social Security Benefits (H) (466.80)
                                     Social Security Benefits (W) (217.00)
                1/5/81      468.53   Private Disability Benefits (H) (371.43)
                                     Other (97.10)
                1/12/81     412.50   Private Disability Benefits (H)
                1/23/81     132.00   Private Disability Benefits (H)
                1/26/81     600.00   Transfer from Joint Savings Account
                                     (H-W)
                2/24/81     217.00   Social Security Benefits (W)
                3/3/81      217.00   Social Security Benefits (W)
                3/24/81     570.12   Transfer from Joint Savings Account
                                     (H-W)
                

The issue before us arises because the husband's benefit checks deposited in January were treated by the Secretary as income to the wife. In February 1981 the husband opened an individual bank account, and stopped depositing his checks to the joint account.

In February and March, the wife withdrew funds from the account in order to make payments to her adult home. The record contains copies of three checks made out to the facility during this period in the total amount of $727.85. It is not clear from the record, however, whether these constitute the only funds withdrawn from the account for the benefit of the wife. There is also evidence in the record of checking account transactions in April 1981 that may bear on the uses to which the funds deposited in the first quarter were subsequently put.

In order to determine whether the petitioner's income was low enough to qualify for SSI benefits the administrative law judge computed her income for January through March of 1981 in accordance with 20 C.F.R. § 416.221 (1981). He added the deposits of January 2nd, 5th and 12th, a total of $1,564.83. To this he added petitioner's monthly social security benefits (before the medicare deduction) of $226.60 and, averaging over the three months of the first quarter of 1981, arrived at monthly unearned income of $748.21. Deducting the $20 monthly allowance of 20 C.F.R. § 416.1124, petitioner's countable income came to $728.21. (The correct figure on the Secretary's theory, after eliminating computational errors, should have been $699.88.)

As a resident of her adult home — a Level II Congregate Care Facility in New York State — petitioner's SSI payment standard under the July 1, 1980 schedules then in effect was $495.16. Because petitioner's countable income exceeded this amount, the administrative law judge found that she was not eligible for SSI during January, February and March of 1981.

II. Law

A. Statute, Regulations and Manual

All deposits to the joint account were attributed to the petitioner as unearned income on the assumption that wife and husband had equal access to the joint account and that she in fact used funds that were deposited to the account to meet her basic needs for food, clothing, and shelter. This was done pursuant to an administrative policy memorialized in the Social Security Claims Manual (CM). At the relevant time, the Manual read:

When a joint bank account is held by an SSI eligible the wife and an ineligible the husband, the total amount of ... any deposit to the account made by ... the ineligible ... is counted as income to the SSI eligible ....

CM Section 12305(B)(3)(a) (1979).

The Manual has since been superceded by the Program Operations Manual System (POMS), which provides that effective July 31, 1982 the SSI claimant may rebut ownership of a portion of the funds in a joint account. If the claimant is successful, a proportionate amount of the deposits and accrued interest will not be attributed to her. POMS Section SI0810.130 (1982).

The Claims Manual provisions are not dispositive. "The Manual is not subject to the procedural protections inherent in the drafting of regulations. `It has no legal force, and it does not bind the SSA.' Schweiker v. Hansen, 450 U.S. 785, 789, 101 S.Ct. 1468 , 1472, 67 L.Ed.2d 685 (1981)." Whaley v. Schweiker, 663 F.2d 871, 873 (9th Cir.1981). A determination of the legitimacy of Secretary's practice of imputing all deposits to a claimant's joint bank account as income to the claimant must rest on an interpretation of the SSI statute and regulations.

Section 1612(a) of Title XVI of the Social Security Act, as amended, 42 U.S.C. § 1382a(a) (1976 and Supp.), explains that income, for the purposes of SSI eligibility and benefit levels, includes both earned and unearned income. The statute defines earned income as employment income and goes on to state, in relevant aspects, that:

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

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

(E) gifts (cash or otherwise) ....

This language provides little guidance in assessing treatment of joint bank accounts.

Nor do the regulations promulgated under Title XVI, as they have been in force during and since the Secretary's review of claimant's application, address this issue. 20 C.F.R. § 416.1102 (1982) defines income as "anything you receive in cash or in kind that you can use to meet your needs for food, clothing, or shelter." Section 416.1120 (1982), speaking to unearned income, merely tracks the statute and declares, "Unearned income is all income that is not earned income."

The government argues that the Secretary's attribution of all deposits to the joint account as income to the claimant is justified because claimant, as joint owner, had access to all funds in the account. The government also urges the court to defer to the Secretary's interpretation of income, because of his power to promulgate regulations under the Social Security Act. 42 U.S.C. § 1302.

While a court must respect the views of the Secretary in interpreting a statute committed to his administration, his interpretation is "not of controlling significance." Batterton v. Francis, 432 U.S. 416, 424, 97 S.Ct. 2399, 2404, 53 L.Ed.2d 448 (1977). Conspicuously absent from Title XVI is a broad delegation of authority to the Secretary to promulgate standards for characterization of income and resources for SSI eligibility. The Secretary has been given only the limited authority of formulating exceptions to requirements of deeming spousal income. 42 U.S.C. § 1382c(f)(1). In contrast, Title XIX of the Act delegates to the Secretary the responsibility for establishing general criteria on resource and income inclusion for medicaid eligibility. 42 U.S.C. § 1396a(a)(17). The deference accorded the Secretary in characterizing income for purposes of medicaid, see Herweg v. Ray, 455 U.S. 265, 102 S.Ct. 1059, 1066, 71 L.Ed.2d 137 (1982), does not automatically apply to the SSI program.

B. Actual Availability

Courts considering the Secretary's denomination of assets as income to an SSI claimant have often done so under the rubric of "actual availability" to the claimant. See, e.g., Usher v. Schweiker, 666 F.2d 652 (1st Cir.1981) (difference between fair market rental and actual rental); Jackson v. Schweiker, 683 F.2d 1076 (7th Cir.1982) (same); Summy v. Schweiker, 688 F.2d 1233 (9th Cir.1982) (Veterans Administration reimbursement for medical expenses); Tsosie v. Califano, 651 F.2d 719 (10th Cir.1981) (Veterans Administration benefits received on behalf of surviving children). The justification for this analysis lay with the prior version of the SSI regulations defining unearned income. 20 C.F.R. § 416.1120 (1980). The regulation, then entitled "Availability of Unearned Income," read, "In determining the amount of unearned income the amount actually available to the individual is considered."

The new regulations on earned and unearned income, which became effective October 3, 1980, were promulgated "to make these rules clearer and easier for the public to understand." 45 Fed.Reg. 65541 (1980). No substantive change in § 416.1120 seems to have been intended. The "availability" approach may reasonably be assumed to be of continuing vitality. That an availability analysis may be mandated by the statute itself is suggested by section 1614 of the Act, 42 U.S.C. § 1382c(f)(1), which declares that in deeming the income of a cohabiting spouse, availability is not to be considered, except as the Secretary may prescribe. A reasonable inference to be drawn is that all other income attributed to a claimant must actually be available.

"Courts have carefully examined when the receipt of an item of value by an SSI beneficiary constitutes income which is actually available to meet the beneficiary's basic needs." Summy v. Schweiker, 688 F.2d 1233, 1235 (9th Cir.1982). The...