Petition — Smith v. Harris

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Supreme Court, U.

19-498 FILED

SEP 14 w7p

In the Supreme Court’ HM"

OF THE

United States

OctToBEeR TERM, 1978

No.

JEANINE R. Situ,

Petitioner,

VS. >

Patricia Roserts Harris, Secretary of Health,

Education and Welfare,

Respondent.

PETITION FOR WRIT OF CERTIORARI

to the United States Court of Appeals

for the Ninth Circuit

Konatp A. ZuMBRUN

JoHN H. FINDLEY

Tuomas EK. Hookano

Pacific Legal Foundation

455 Capitol Mall, Suite 465

Sacramento, California 95814

Telephone: (916) 444-0154

Attorneys for Petitioner

CHRISTOPHER H. CoLLins

Pacific Legal Foundation

1990 M Street, N.W., Suite 550

Washington, D.C. 20036

Telephone: (202) 466-2686

Of Counsel

September, 1979

BOWNE-PERNAU WALSH ¢ 1045 SANSOME ST. © S.F.,CA 94111 © (415) 981-7882

SUBJECT INDEX

ee Css ue ens nanan sass

Questions presented for review ........................005.

Statutes and regulations involved ..........................

EEL LLL

Reasons for granting the writ .........................0...

A. The Court of Appeals erroneously interpreted Section

ments) of the Social Security Act, 42 U.S.C. § 1383(a),

as precluding the posthumous payment of Supplemental

Social Security Income Underpayments to a represent-

ee oc ea nee sh

B. The Court of Appeals erroneously C9 sr Section

_ 1631(b), 42 U.S.C. § 1383(b), as disallowing posthu-

mous payment of SSI Underpayments to anyone other

than the eligible spouse of the deceased beneficiary ... .

C. The Secretary's Regulations at 20 C.F.R. §§ 416.542(b)

( _ and 416.601(a) (1974) are unreasonable and in-

Vv

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ee ES ee

11

ii

TABLE OF AUTHORITIES CITED

Cases

Page

Cardinale v. Mathews, 399 F. Supp. 1163 (D.D.C. 1975) ..... 17

Kokoszka v. Belford, 417 U.S. 642 (1974) ................... 14

Smith v. Califano, 597 F.2d 152 (9th Cir. 1979) 5, 6, 10, 12, = re

a ebaeedt ona t ee dd cs ccd eh LST Ot Raiavay ard 16,

Regulations

Title 20, Code of Federal Regulations:

RONNIE oss 5 acco cnt aus Obie. 4D Dente Hol. ano 3,4

IO CU freee eons oy Sas. y tt eg 3, 14

IE Sn rr, eee, OO, FAS ooh 3, 14, 15

eS ed. re ARENT BTS 3, 12,13

Rule

Supreme Court of the United States Rule 19 ................ 8

Statutes

SD Vibe Bien PRT ae 2 SRS, we, 2

Social Security Act:

a tiem, el elt allio edee 7

MOS gs oc ee ee wee ess cee 25 ae

NE aS eet ia ie lal ince aa ice dele 3

RSE nn ee ame aCe PP | 3, 16

RS PT es et at ae

MP POCDE ED |... oon. id cease ts sae es 13

Ne rn Dg a. suo ou vp izlane eee a 3, 6

Section 1383005 ¢23 bariehtals aa 's-4 0c dials 8,9

Section 1383(a)(2) .......... it ao pun eee 2, 8,9

a S, S hes wens vce ee ee ae 2, 3,8

I i a ge te ea an 7

| i ret 7, 10, 11, 12, 15

II SE Pe Ce ee ae 14

Seotiem MGGI(B). -... 2.55... 7, 9, 10, 11, 12, 13, 14, 15

Other Authorities

Social Security Act Amendments of 1972, Pub. L. No. 92-603... 8

vot enews =

In the Supreme Court

OF THE

United States

Ocrosrr TERM, 1978

No.

JEANNINE R. Smite,

Petitioner,

Vs.

Patricia Roserts Harris, Secretary of Health,

Education and Welfare,

Respondent.

PETITION FOR WRIT OF CERTIORARI

to the United States Court of Appeals

for the Ninth Circuit

Petitioner Jeanine R. Smith, successor party in interest

to Rosette V. Guidet, deceased, prays that a writ of cer-

tiorari issue to review the opinion and judgment of the

United States Court of Appeals for the Ninth Circuit.

OPINION BELOW

The opinion of the United States Court of Appeals for

the Ninth Circuit is reported at 597 F.2d 152 (9th Cir.

1979), and is set forth in Appendix A to this petition. The

Judgment and Order of the United States District Court

for the Eastern District of California granting defendant’s

motion for summary judgment is not reported and is set

forth as Appendix B. |

a a

2

The judgment of the Court of Appeals held that Section

1631(b) of the Social Security Act, 42 U.S.C. § 1383(b),

and the regulations of the Secretary of Health, Education

and Welfare (HEW) interpreting that section, prevent the

reimbursement for services and necessities of life provided

on a credit basis to an eligible Supplemental Security In-

come (SSI) recipient during his lifetime when such recip-

ient dies before SSI benefits to which he is entitled are

received. It held further that unless there is a surviving

eligible spouse, payments owed cannot be paid to anyone

despite the provision of services in reliance upon SSI

eligibility. The judgment, therefore, severely impedes the

ability of the elderly, disabled, and indeed, all those de-

pendent upon the SSI program for their livelihood, to

obtain the necessities of life on a credit arrangement dur-

ing periods of underpayment.

JURISDICTION

The judgment of the Court of Appeals was entered on

March 9, 1979. The petition for rehearing with suggestion

for rehearing en banc was denied on June 4, 1979. On

August 10, 1979, this Court granted a 10-day extension of

time to file this petition for writ of certiorari. The juris-

diction of this Court is invoked pursuant to 28 U.S.C.

§ 1254(1).

QUESTIONS PRESENTED FOR REVIEW

-1. Whether Section 1631(a)(2) of the Social Security

Act, 42 U.S.C. § 1383(a)(2), prohibits, in all circumstances,

the posthumous payment of SST benefits to a representative

payee.

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3

2. Whether Section 1631(b) of the Social Security Act,

42 U.S.C. § 1383(b), prohibits payment of a deceased SSI

applicant’s or recipient’s benefits to a representative payee

other than an eligible spouse.

3. Whether the regulations of the Secretary of HEW,

20 C.F.R. $§ 416.542(b) and 416.601(a) (1974), are invalid.

STATUTES AND REGULATIONS INVOLVED

Set forth in Appendix C are the pertinent provisions of

the Social Security Act, 42 U.S.C. §§ 1381, 1381a, 1382(a),

and 1383; and the regulations of the Social Security Ad-

ministration, Department of Health, Education and Wel-

fare, 20 C.F.R. §§ 416.536, 416.542(b), 416.601(a), and

416.601 (b).

STATEMENT OF THE CASE

This case arises under the SSI program, whose very

purpose is to assist the aged, blind, and disabled in ob-

taining the necessities of life. Its purpose is accomplished

by providing monthly cash payments to all those deemed

eligible under income, resources, disability, and age

standards. See, e.g., 42 U.S.C. §§138la and 1382. This

case concerns the method of payment of benefits and

entitlement.

On occasion, SSI payments in less than the correct

amount are made to eligible recipients. Oftentimes, for

reasons of inadvertence, error, ov administrative delay,

payments due eligible recipients under the program are

4

not made at all.‘ When payment is due, but less than the

correct amount or no payment is received, an underpay-

ment is deemed to have occurred. 20 C.F.R. § 416.536

(1975). It is at the time of an underpayment that many SSI

recipients must attempt to rely on credit arrangements to

obtain the necessities of life.

«he gravamen of this case is that the Secretary’s policy

affirmed by the Court of Appeals prohibiting posthumous

payment of underpayments to representative payees who

provided necessities of life on a credit basis to eligible SSI

recipients during periods of underpayment violates the

purposes and literal provisions of the SSI program and

the Social Security Act. As Judge Merrill pointed out in

his dissenting opinion:

“Under the Secretary’s construction of § 1631(b), as

adopted by the majority opinion, the recipient is de-

prived of any ability to secure credit on the basis of

his SSI payments that would survive death. Without

such credit, private homes for the aged and infirm are

not likely to welcome those without independent finan-

cial resources and the Act fails to provide adequately

“It is relevant to note that in the months April through September,

1978, there were an average of 4,247,210 aged, blind, and disabled

persons receiving SSI benefits. The national case error rate for this

period as regards underpayments was 4.2% of the total cases. (The

term “case” is used here nymously with “person.” Thus, on the

average, 178,383 persons during that period received no payment or

were paid less than their full entitlement. Source: telephone inter-

views on September 6, 1979, with Mr. Peter Wheeler, Director of

Quality Assurance Program, and Ms. Lanna Kennedy, Research

Analyst, Office of Research and Statistics, Social Security Adminis-

tration, United States 0 gre rl of Health, Education and Wel-

fare, Baltimore, Maryland. Under the Secretary's regulations and

the judgment of the Court of Appeals, these persons would have to

find other sources to meet their current needs or attempt to rely on

credit arrangements as in the case of petitioner's grandmother.

———,

er yuewe

eel

5

for those most in need of their SSI payments.” Smith

v. Califano, 597 F.2d 152, 158 (9th Cir. 1979).

Petitioner Smith is the granddaughter and successor

party in interest of Rosette V. Guidet. Mrs. Guidet was

born in 1895. Before her death on March 6, 1974, she was an

impoverished, blind and widowed amputee. On January 1,

1974, Mrs. Guidet was placed in a board and care facility

by her granddaughter’s husband with the assistance of the

Sacramento, California, County Welfare Department. Her

placement in the facility was made with the understanding

that payment for care and support received would be from

SSI benefits under Title XVI of the Social Security Act,

42 U.S.C. $§ 1381, et seg. Respondent Secretary does not

dispute Mrs. Guidet’s entitlement to SSI benefits. Smith

v. Califano, 597 F.2d at 154 n.2. Mr. Smith, husband of the

petitioner, signed the admissions agreement which pro-

vided for the payment of $250 in advance,

In January and February of 1974, Mrs. Guidet com-

pleted and submitted all the necessary application forms

for SSI benefits, but died on March 6, 1974, before the

Social Security Administration (SSA) completed its

processing of her application. Without completing an

eligibility determination, SSA denied payment of the

charges accrued by Mrs. Guidet in the facility because they

reasoned that, pursuant to the provisions of Section

1631(b) of the Social Security Act, payment could only

be made to a surviving spouse of the deceased eligible

recipient who was also an SSI recipient in the month the

deceased eligible recipient died. If there were no surviving

eligible spouse, the payments due to the deceased recipient

6

could not be paid to anyone. Smith v. Califano, 597 F.2d

at 154.

Smith appealed the SSA determination to an adminis-

trative law judge (ALJ), who determined that Mrs. Guidet

was entitled to SSI benefits for January and February of

1974, and that payments for the charges accrued at the

facility by Mrs. Guidet should be made either directly to

the facility itself or

“to a representative payee, to be used solely to reim-

burse . . . for necessaries furnished to the deceased

applicant during the period for which the benefits are

due, if such necessaries were provided in reasonable

reliance on the needy applicant’s future payment for

such necessaries out of supplemental security income

payments not yet received but to which entitlement

existed for the perio? of furnishing such necessaries.”

Id.

The Appeals Council of HEW rejected the decision of

the ALJ on the basis that, under the regulations of the

Secretary of HEW, “payment through a representative

payee is contemplated only where the eligible’ individual

is living.” Jd. Both the ALJ and the Appeals Council found

that the “record does not reflect any reason to deny

payment other than the applicant’s death.” Jd.

Suit was brought on May 5, 1975, in the United States

District Court for the Eastern District of California by

Jeanine R. Smith, successor party in interest to the claim

of Rosette V. Guidet, seeking a reversal of the decision of

the Appeals Council of HEW, which was based on an

erroneous interpretation of Section 1631 of the Social

Security Act, 42 U.S.C. § 1383. Smith also requested that

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7

the court invalidate certain regulations implementing

Sections 1631(a) and (b) of the Social Security Act as

contravening the purposes of the Act, direct the Secretary

of HEW to pay the disputed benefits to an appropriate

representative payee, and award attorneys’ fees and costs.

The jurisdiction of the District Court was premised on 42

U.S.C. § 405(g) and Section 1631(c)(3) of the Social Se-

curity Act, 42 U.S.C. § 1383(c) (3).

Cross motions for summary judgment were filed on

October 18, 1976. The court granted the Secretary’s motion

and denied Smith’s motion on October 22 of that year. On

December 20, 1976, Smith appealed the District Court’s

judgment to the United States Court of Appeals for the

Ninth Circuit. On March 9, 1979, the Ninth Circuit affirmed

the judgment of the Eastern District of California, and a

rehearing was denied on June 4, 1979.

REASONS FOR GRANTING THE WRIT

This case presents significant issues involving the rights

of eligible SSI beneficiaries to receive benefits guaranteed

to them under the Social Security Act and the SSI

program.

The ruling of the Court of Appeals essentially deprives

hundreds of thousands of SSI beneficiaries of any ability

to secure credit during periods of underpayment because

it precludes payment of benefits posthumously, except

where there is a surviving eligible spouse. There is a

real possibility that qualified potential SSI beneficiaries

will be refused much needed care or services until the

administrative paperwork on their claims has been fully

processed, which may take weeks or months, even though

there is no doubt as to eligibility.

The judgment of the Court of Appeals effectively “re-

wards” the Secretary for the delay in processing SSI

applications if the otherwise eligible beneficiary dies before

the paperwork is completed and he therefore does not

receive benefits to which he is entitled. The decision also

critically affects those current SSI recipients who experi-

ence an interruption in the payment of benefits for reasons

including administrative error or inadvertence. The “re-

ward” to the Secretary in the event of death of the recip-

ient during a period of underpayment is made all the more

unjust in such circumstances where nonpayment was due

solely to the fault of the SSA.

This case thus presents important questions of federal

law concerning the interpretation of two key subsections

of the SSI program, created under the Social Security

Act Amendments of 1972, Pub. L. No. 92-603. These are

Sections 1631(a)(2) and 1631(b), 42 U.S.C. §§ 1383(a) (2)

and 1383(b). This Court’s review pursuant to Supreme

Court Rule 19 is therefore of utmost importance.

A. The Court of Appeals Erroneously Interpreted Section

1631(a) of the Social Security Act, 42 U.8.C. § 1383(a),

as Precluding the Posthumous Payment of Supple-

mental Social Security Income Underpayments to a

Representative Payee

It is clear from a reading of Subsections (1) and (2) of

42 U.S.C. §1383(a) that the intent of Congress was to

authorize the Seeretary to provide for payments to an

individuai, other than the beneficiary, or an appropriate

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9

public or private agency, where payments directly to a

beneficiary would fail to effectuate the purposes of the Act.

Section 1383(a)(1) provides for the payment of benefits

in a time and manner which will “best effectuate the

purposes” of the program. Subpart (a)(2) of that section

allows that when payment is to be made to an individual,

it may also be made to his spouse or, if the Secretary

deems it appropriate, to any other person or public or

private agency “who is interested in or concerned with

the welfare of such individual.” 42 U.S.C. § 1383(a) (2).

The obvious intent of these two provisions, when taken

together, is to allow payment of benefits to be made in those

instances when the eligible beneficiary is not in a position,

for whatever reason, to attend to his or her own financial

interests.

A plain reading of the statute reveals that there is

tbsolutely no distinction created between living and de-

ceased beneficiaries as regards the designation of repre-

sentative payees. It further appears that there is no

explicit prohibition against payment of past due benefits

to a representative payee of the eligible recipient as reim-

bursement for federally eligible needs met during the life

of the recipient by other than the SSI payment. Indeed,

to deny such payment will not effectuate the purposes of

the Act, but will instead create an irrational distinction

which will serve to hinder the purpose of providing as-

sistance to eligible recipients. It makes little sense to allow

such payment if the decedent left a surviving spouse, but

to deny payment if there is no surviving widow or widower.

The Court of Appeals also relied upon the legislative

history of the provision which ultimately became Section

10

1631(b) of the Act as a basis for its decision that the repre-

sentative payee provisions of Section 1631(a) could not

be applied to Section 1631(b). The legislative history

provides:

“Overpayments and underpayments.—. . .[I]f less

than the correct amount of benefits had been paid, the

Secretary would pay the balance due to the underpaid

individual. If the individual dies before the amount

due has been paid to him, or before he negotiates the

check representing the correct payment, the amount

due would be paid to his eligible spouse, if there is one,

and the payment would not be taken into account in

determining the spouse’s need under this program.

Underpayments, however, would not be paid to the

estate of a deceased individual since that would not

further the objective of meeting the current needs of

individuals. Overpayments, on the other hand, could

be recovered from the estate of a deceased individual.

H.Rep. No. 231, 92d Cong., 2d Sess., reprinted in [197 2]

U.S.Code Cong. & Admin.News 4989, 5141.” Smith v.

Califano, 597 F.2d at 155 (emphasis added).

The significant language in the House Report is that

which precludes payments “to the estate of a deceased

individual since that would not further the objective of

meeting the current needs of individuals.” The Court of

Appeals concluded on the basis of such language that the

representative payee provisions of Section 1631(a) could

not be incorporated into the underpayment section provi-

sion of Section 1631(b). Smith v. Califano, 597 F.2d at 157.

_ As the dissent below accurately pointed out, however,

what would be accomplished by payment to the representa-

tive payee is not a blanket payment to the estate of the

11

deceased, but rather a payment to a representative payee,

outside of the estate of the deceased. There is no reason

or justification for allowing these payments to be reached

by the general creditors of the deceased by allowing them

to be paid to the estate of the deceased, but neither is

there any reason or justification for denying underpay-

ments as reimbursement for the current needs of an

eligible beneficiary due solely to the fact that, although

there may be a representative payee ready, willing, and

able to assume the financial responsibilities, there is no

surviving spouse. While Congress may have intended to

preclude wasteful payment to the estate of the deceased

beneficiary as not in furtherance of the purposes of the

Act, it could not have intended to preclude payment for

needs intended to be met with SSI and actually provided

during the lifetime of the recipient. Such would thwart

the very goals Congress set out to achieve by enacting the

SSI program.

The literal language of Section 1631(a) and the purposes

of the SSI program compel a conclusion, therefore, that

the Section 1631(a) representative payee provisions are

applicable to the underpayment provisions of Section

1631(b) notwithstanding the intervening death of the SSI

recipient.

B. The Court of Appeals Erroneously Interpreted Section

1631(b), 42 U.S.C. § 1383(b), as Disallowing Posthu-

mous Payment of SSI Underpayments to Anyone Other

Than the Eligible Spouse of the Deceased Beneficiary

Section 1631(b) of the Social Security Act provides that

underpayments may be made to the eligible beneficiary or

12

to his eligible spouse. It is the position of the petitioner

that, under Section 1631(b), payment to a representative

payee constitutes payment to an eligible individual. Ac-

cording to the Secretary’s regulation found at 20 C.F.R.

§ 416.601(b) (1974), payment to the representative payee

of an eligible individual constitutes payment to such eli-

gible individual. The court below was of the opinion that

Section 416.601(b) does not apply to Section 1631(b), be-

cause Oongress intended to limit the payment of under-

payments to the individual or his eligible spouse. Smith

v. Califano, 597 F.2d at 156 n.7. Such a view is contrary

to the overall purposes of the Social Security Act. More-

over, the distinction which the Court of Appeals draws

between regular payments under Section 1631(a) and

underpayments under Section 1631(b) does not withstand

elose scrutiny. The Court of Appeals relies heavily on the

provisions of Section 1631(a) allowing payment to “other

persons” and concludes that since that language is not

used in the Section 163i(b) underpayment provisions, Con-

gress intended to limit payment of underpayments to only

the eligible individual or eligible surviving spouse. Smith

v. Califano, 597 F.2d at 156 n.7.

Underpayments made pursuant to Section 1631(b) are

oftentimes made to representative payees despite the fact

that Section 1631(b) does not precisely set out persons

other than the eligible individnal or spouse to whom pay-

ment can be made. Smith v. Califano, 597 F.2d at 158.

Even the Secretary does not honor the distinction between

regular payments and underpayments drawn by the Court

of Appeals. As the dissent points out:

13

“Tf full force is to be given to the literal distinction

between §41631(a) and (b), on which the majority

relies, the result would be that while regular payments

can be made to a representative payee, adjustments

for underpayments never can. I can see little sense in

such a distinction. But more: As I understand the

practices of the Secretary and his interpretations of

the regulation, the emphasis has not been on the dif-

ference between regular payments and underpayments.

Rather, it has been on whether the recipient is living

or dead. The Appeals Council in this case relied on

this living/dead distinction as quoted by the govern-

ment in its brief. ‘[I]t is evident from $ 416.601(a)

that payment through a representative payee is con-

templated only where the eligible individual is living.’

The cited regulation does not expressly impose this

condition. But in any event it would appear that the

Secretary quite sensibly does not hesitate to adjust

for an underpayment by paying a representative if

the recipient is alive.” Smith v. Califano, 597 F.2d at

158 (emphasis added).

The Court of Appeals’ distinction would preclude pay-

ment in the amount of the underpayment to representative

payees. The result would be a direct payment of adjust-

ments for underpayment to, for example, drug addicts or al-

coholies, violating the clear prohibition of Sections 1631(a)

(2) and 1611(e)(3)(A), 42 U.S.C. § 1382(e)(3)(A), for-

bidding payments of any sort directly to such persons.

Under a logical, common sense reading of the statute,

using 20 C.F.R. §416.601(b) (1974), there is no reason

why the adjusted benefits provided for in Section 1631(b)

cannot pass to a representative payee as prescribed in

ES CL OE MT NRT OS i ren sn ct itt ee a oar.

14

Section 1631(a)(2). This reading of Section 1631(b) best

furthers the intent of the statute.

This Court has made it clear that in interpreting a stat-

ute it “will not look merely to a particular clause in which

general words may be used” but will take in connection

with the statute the entire enactment and “the objects and

policy of the law, as indicated by its various provisions,

and give to it such a construction as will carry into execu-

tion the will of the Legislature. Brown v. Duchesme, 19

How. 183, 194, 15 L. Ed. 595 (1857).” Kokoszka v. Belford,

417 U.S. 642, 650 (1974).

Section 1631(b), when read in conjunction with Section

1631(a)(2) and examined in light of the policy outlined

by Congress in Title XVI of the Social Security Act, allows

underpayments to be made to a representative payee of a

qualified SSI beneficiary other than a qualified eligible

spouse, as reimbursement for the federally eligible needs

provided to the beneficiary even after that person has died.

C. The Secretary’s Regulations at 20 C.F.R. §§ 416.542(b)

(1975) and 416.601(a) (1974) Are Unreasonable and In-

valid

The regulations promulgated by the Secretary purport-

edly for the purpose of promoting the goals of the Social

Security Act are in fact inconsistent with those goals, and

are therefore invalid, to the extent that they prohibit the

posthumous payment of SSI benefits to the representative

payee of a qualified beneficiary to reimburse for the needs

of the beneficiary met during his lifetime. Title 20, Code

of Federal Regulations, Section 416.542(b) (1975) reads:

15

“If a recipient dies before the amount due him had

been paid to him... the amount of the underpayment

may be paid only to his surviving spouse and then

only if such spouse was eligible for supplemental

security income benefits... . No underpayment may

be paid to the estate of any underpaid recipient, the

estate of the surviving spouse, or to any survivor other

than the living-with eligible spouse.”

This provision, which precludes payment of underpayments

to others than an eligible surviving spouse, is inconsistent

with the intent of Congress and with the stated policy and

express provisions of Sections 1631(a) and (b) of the So-

cial Security Act discussed supra.

Title 20, Code of Federal Regulations, Section 416.601(a)

(1974) reads:

“(1) When it appears to the Administration that the

interest of a recipient of payments under title XVI

of the Act would be served thereby, certification of

payment may be made by the Administration, regard-

less of the legal competency or incompetency of the

recipient eligible thereto, either for direct payment to

such recipient, or for his use and benefit to a relative

or some other person (including an appropriate public

or private agency) selected by the Administration as

the ‘representative payee’ of the recipient.” (Emphasis

added.)

The Secretary interprets this regulation to mean that

payment through a representative payee is contemplated

only where the individual is living. Smith v. Califano, 597

F.2d at 158. Not only does the above quoted regulation

not make any mention of whether the beneficiary must

be alive for the representative payee provisions to be

16

applicable but such an interpretation is invalid as unneces-

sarily restrictive and contra to the intent of Congress and

to the stated purposes and the express langnage of the

Social Security Act.

The intent of Congress, as evidenced in a broad reading

of the statute, is to assist qualified individuals to obtain

the basic necessities of life. To deny adjustments for under-

payment to a representative payee as reimbursement for

the needs supplied to a now deceased beneficiary, but to

allow such payments to be made to the representative

payee of a living beneficiary, contravenes this intent. As

such, these regulations are void.

CONCLUSION

The decision of the Court of Appeals creates an anoma-

lous situation wiereby the Secretary of HEW is “rewarded”

for his delay or inadvertence in providing benefits to those

entitled under the SSI program. If he delays long enough

and the eligible recipient dies, pursuant to the decision of

the Court of Appeals, no payment need be made what-

soever, notwithstanding the fact that the eligible applicant

or recipient may be deprived of any ability to secure credit

during his lifetime on the basis of his SSI eligibility and

payments which may survive his death. Such result contra-

venes the clear language of Section 1601(a) of the Act,

42 U.S.C. §1381(a), which provides that “every aged,

blind, or disabled individual who is determined . . . to be

eligible . . . shall be paid benefits by the Secretary of

HEW.” As Judge Merrill pointed out in his dissent, “the

act, with the Secretary’s blessing, seems to work most

zealously against its own apparent purpose.” Smith v.

17

Califano, 597 F.2d at 158. That purpose is “to free the

poor from want and the indignities of poverty.” Cardinale

v. Mathews, 399 F. Supp. 1163, 1164 (D.D.C. 1975).

For the reasons set forth above, a writ of certiorari

should issue to review the decision of the United States

Court of Appeals for the Ninth Circuit.

Respectfully submitted,

Ronatp A. ZumBrun

Joun H. Finpiey

Tomas E. Hooxano

Pacific Legal Foundation

455 Capitol Mall, Suite 465

Sacramento, California 95814

Telephone: (916) 444-0154

Attorneys for Petitioner

CurisToPHEr H. Coins

Pacific Legal Foundation

1990 M Street, N.W., Suite 550

Washington, D.C. 20036

Telephone: (202) 466-2686

Of Counsel

September, 1979

(Appendices Follow)

Appendices

Appendix A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JEANINE R. Smiru, Successor Party in |

Interest,

Rosette V. Gumpert, deceased.

Plaintiff-Appellant,

vB. > No. 77-1296

Caspak W. Wenpercer, Secretary of OPINION

H.E.W.

Defendant-Appellee. :

[Filed March 9, 1979]

Appeal from the United States District Court

for the Eastern District of California

Before: MERRILL and CHOY, Circuit Judges, and

MURRAY’, District Judge.

CHOY, Circuit Judge:

Jeanine R. Smith, as successor in interest to Rosette V.

Guidet, appeals from the district court’s granting of sum-

mary judgment in favor of the Secretary of Health,

Education and Welfare (the Secretary). We affirm.

I. Statement of the Case

The parties are agreed on the essential facts. Ms.

Smith’s grandmother, Rosette V. Guidet, was born in 1895.

*The Honorable William D. Murray, Senior United States Dis-

trict Judge for the District of Montana, sitting by designation.

A-2

She was widowed and suffering from a sight limitation

and amputated leg. On January 1, 1974, Mrs. Guidet was

placed in a board and eare facility by Smith’s husband

with the assistance of the Sacramento County Welfare

Department. Though it was understood that the costs of

care would be paid by public assistance programs,’ Mr.

Smith signed the admissions agreement, providing for

payment of $250 a month in advance.

In late January and early February, Mrs. Guidet com-

pleted the necessary applications for supplemental security

income under Title XVI of the Social Security Act (the

Act), 42 U.S.C. § 1381. Mrs. Guidet died on March 6, 1974,

before the Social Security Administration (SSA) com-

pleted its processing of her application. Without com-

pleting an eligibility determination,? the SSA denied

payment to Mrs. Smith or her successors because:

Section 1631(b) of the Social Security Act provides

that money due a_ supplemental security income

recipient who dies may be paid only to the deceased

individual’s surviving husband or wife who was also a

supplemental security income recipient in the month

the deceased individual died. If there is no such

surviving husband or wife, the payments due the

deceased recipient cannot be made to anyone.

administrative law judge wrote:

pa '

Government ledges that for purposes of this it should

be assumed that there was no reason to deny benchte for farwe

and February other than Mrs. Guidet’s death. . ..

fin bh ndings: ch fee,’ edlipnell tye Adept Clndied the

eae _—

ea nee

|

|

A-3

Upon appeal, an administrative law judge (ALJ) con-

cluded that Mrs. Guidet’s benefits for J anuary and Febru-

ary should be paid either to the health facility or “to

another appropriate representative payee.” The ALJ

wrote:

[I]f a person entitled to supplemental security income

payments dies before receiving them, . . . payment,

wholly or in part, may be made to a representative

payee, to be used solely to reimburse . . . for neces-

saries furnished to the deceased applicant during the

period for which the benefits are due, if such neces-

saries were provided in reasonable reliance on the

needy applicant’s future payment for such necessaries

out of supplemental security income payments not yet

received but to which entitlement existed for the

period of furnishing such necessaries.

The Appeals Council of HEW on its own motion reviewed

the ALJ’s decision. Rejecting the ALJ’s conclusion, the

Appeals Council wrote:

Where an individual has died, there can be no payment

to her even through a representative payee. Similarly,

the applicant’s attorney argues in his excellent brief

that under Section 416.601(b) of the Regulations,

payment to a representative payee constitutes pay-

ment to an eligible individual. The Appeals Council

does not disagree with this contention; however, it is

evident from Section 416.601(a) that payment through

a representative payee is contemplated only where the

eligible individual is living.

Ms. Smith then sought review of the Appeal Council’s

decision in the district court.* Noting that the health

*The parties correctly assert that the Appeals Council's decision

represented a final administrative decision a able in district

court — 42 esi §§ 405(¢) and wy ey fen nteamanan

t of summary judgment constitutes a judgment, a e

fo this court under 28 U.S.C. § 1291.

A4

facility had not yet received payment, Ms. Smith asked

that the district court reverse the Appeals Council’s deci-

sions as legally erroneous, invalidate those regulations

that she asserted were inconsistent with a proper reading

of the Act, direct the Secretary to pay Mrs. Guidet’s bene-

fits “to an appropriate representative payee,” and award

costs and attorney’s fees. On cross motions for summary

judgment the district court granted the Secretary’s motion

and denied Ms. Smith’s motion.‘

Il. Interpretation of § 1632

The parties agree that the payment involved in the

present dispute constitutes an underpayment under the

Act. Section 1631(b) of the Act, 42 U.S.C. § 1383(b),

provides in part:

Whenever the Secretary finds that more or less than

the correct amount of benefits has been paid with

respect to any individual, proper adjustment or recov-

ery shall . . . be made by appropriate adjustments in

future payments to such individual or by recovery

from or payment to such individual or his eligible

spouse (or by recovery from the estate of either). ...

(Emphasis added). The Secretary argues that this provi-

sion and the regulations adopted thereunder® prevent his

‘This court has recently written:

Summary judgment may be ted “‘only where there is no

enuine issue of any material fact or where viewing the evi-

Srocd” tat the ft t most favorable to the adverse , the

movant is clearly entitled to il as a matter of law.’”

C ov. Roberts, 506 F.2d 1039, 1042 (9th Cir. 1974), See

Fed.R.Civ.P. 56.

v. i & Naturalization Serv., ... F.2d ...; ... 9th

Cir. Oct. 13, 1978), slip op. at 3356. The parti i did Cn

on the material facts, the involving the proper etation

Sear aint statutes and regulations. Because the case - mapoemdin

as a matter 4 was

resolv summary judgment proper

‘See note 7 infra.

A-5

making posthumous underpayments to anyone except an

eligible spouse. See 39 Fed. Reg. 2012 (1974) ; 40 Fed. Reg.

47762 (1975). Ms. Smith counters that subsection (b) does

not proscribe payment to appropriate “representative

payees.” We believe that the Secretary’s interpretation is

correct.

First, the language of § 1631(b) is clear on its face. It

specifically limits the Secretary to giving underpayments

only to “such individual or his eligible spouse.” By con-

trast, where Congress intended to allow payments to other

individuals, it specified such allowance, as in subsection

(a)(2) of §1631.° As we wrote in another context, “(t]he

language of a statute is the best and most reliable index

of its meaning, and where the language is clear and un-

equivocal it is determinative of its construction.” Monte

Vista Lodge v. Guardian Life Insurance Co., 384 F.2d

126, 128 (9th Cir. 1967), cert. denied, 390 U.S. 950 (1968).

Second, the legislative history indicates that Congress

intended that subsection (b) be interpreted in the Secre-

tary’s manner. The House Report said of the provision

which became §$ 1631(b) :

Overpayments and underpayments. — .. . [I]f less

than the correct amount of benefits had been paid, the

Secretary would pay the balance due to the underpaid

individual. If the individual dies before the amount

due has been paid to him, or before he negotiates the

check representing the correct payment, the amount

due would be paid to his eligible spouse, if there is

one, and the payment would not be taken into account

in determining the spouse’s need under this program.

*See page 6 infra.

A-6

Underpayments, however, would not be paid to the

estate of a deceased individual since that would not

further the objective of meeting the current needs of

individuals. Overpayments, on the other hand, could

be recovered from the estate of a deceased individual.

H. Rep. No. 92-231, 92d Cong., 2d Sess., reprinted in

[1972] U.S. Code Cong. & Ad. News 4989, 5141. Later the

House Report reiterated that subsection (b)

provides that when more or less than the correct

amount of benefits has been paid to an individual, the

Secretary will make proper adjustments in future pay-

ments or by recovery from or payment to such indi-

vidual or his eligible spouse, or by recovering from

the estate of either... .

Id. at 5326. These comments demonstrate that Congress

intended subsection (b) to operate as the Secretary here

contends.

Third, though the courts remain the final interpreters

of an act of Congress, see FMC v. Seatrain Lines, Inc.,

411 U.S. 726, 745-46 (1973); Hart v. McLucas, 585 F.2d

516, 520 (9th Cir. 1976), the courts have also repeatedly

reeognized that an administrative agency’s reasonable

interpretation of the statute which it administers is deserv-

ing of considerable respect. See New York Department of

Social Services v. Dublino, 413 U.S. 405, 421 ( 1973) ; Udall

v. Tallman, 380 U.S. 1, 16-17 (1965) ; White v. United States

Civil Service Commission, 468 F.2d 1357, 1358 (9th Cir.

1972)." In the instant case the Secretary’s reasonable read-

"The Secretary's regulations are consistent with his interpretation

of subsection (b). Section 416.542(b), 20 C.F.R., reads in part:

If a reci ient dies before the amount due him has been paid to

him, cay he endorses the check representing the correct

A-7

ing of the Act is consistent with both the language of the

statute and congressional pronouncements. We are thus

most reluctant to disregard the Secretary’s interpretation.

We conclude, as did the Appeals Council, that subsection

(b) does not authorize the disbursement of Mrs. Guidet’s

aid to a “representative payee.”

Though apparently acknowledging that on its face sub-

section (b) does not authorize such payment, Ms. Smith

argues that when that subsection is read in conjunction

with other parts of the Social Security Act a statutory

basis for such payment emerges. First, she notes that the

payment, the amount of the underpayment may be paid onl

to his surviving spouse and then only if such tr we

eligible for supplemental security income benefits and was

living with the d recipient when he died or was not

separated from him for 6 months at the time of death. No

underpayment may be paid to the estate of any underpaid

recipient, the estate of the surviving spouse, or to any survivor

other than the living-with eligible spouse.

If the Secretary’s regulations conflicted with the i

of the statute they were intended to implement” they .waeld of

course be invalid. See Townsend v. Swank, U.S. 282, 286

(1971); Hart v. McLucas, 535 F.2d 516, 520 (9th Cir. 1976). But

where the tions are reasonable and reflect the language and

policy underlying the statute, the courts should carefully consider

the regulations in determining the ak ger inte tion of a

statute. See Northern Indiana Pub. . Co. v. Porter Coun

Chapter of the Izaak Walton League of America, Inc., 423 U.S. 1

15 (1975); Ehlert v. United States, 402 U.S. 99, 105 (1971); Bone

v. Hibernia Bank, 493 F.2d 135, 139 (9th Cir. 1974).

Ms. Smith refers to § 416.601, which reads in part:

(a) . .. When it appears to the Administration that the interest

of 2 jecipient of payments under title XVI . . . would be

served thereby, ification of payment may be made by the

Administration . . . either for direct payment to such recipient,

‘ee use and benefit to a relative or some other

including an appropriate public or private agency) selected

by the Administration as the “representative mult of the

recipient. ...

(b) . .. Payments made in accordance with aph (a) of

this section to a representative payee of an digib e individual

‘

;

;

A-8

ALJ found that because Title II of the Social Security

Act provides for making underpayments to individuals

other than the eligible person’s surviving spouse, “[t]he

parts of the statute must be read reasonably together to

accomplish their purpose. The authorization in the one

subsection [of Title IT] is meant to be understood in all

the other sections [of the Act, including Title XVI].”

Section 204(a)(2) and (4) of Title II, 42 U.S.C. § 404(a)

(2) & (d), includes very detailed provision for making

underpayments to persons other than a deceased individ-

or eligible spouse shall constitute payments to such eligible

individual or eligible spouse.

Ms. Smith contends that § 416.601 a — to § 1631(b) and there-

fore payment to either her or the h facility as a “representative

payee” would constitute payment to “such individual” within the

meaning of § 1631(b). The Secretary responds that § 416.601 can-

not be applied to § 1631(b).

We think the Secretary is correct. To invoke the § 416.601(b)

equivalency rule in the context of § 1631(b) would mean that the

Secretary could pay any “appropriate person.” This would in effect

abrogate the limits of § 1631(b) that Congress intended to a ply to

underpayments. Instead, underpayments would tig sub-

ject to the same rule as are payments under § 1 (a) (2).

That is, payment could be made to such individual or eligible

errata scheme common to subsections (a) (2) and (b)—or to

an appropriate other person—a method statutorily limited to sub-

section (a)(2). We cannot disregard congressional intent to limit

underpayments under subsection (b) more than regular payments

under subsection (a) (2).

This conclusion is reinforced by the language of § 416.601. That

language parallels the language Congress employed in § 1631 (a)

(2), suggesting that the Secretary intended the regulation to apply

in that context and not in the different § 1631(b) payment scheme.

Finally, we note that the ’s reasonable interpretation of his

own regulation should be accorded great respect by a court inter-

reting the r tion. See Northern Indiana Pub. Serv. Co., 423

S. at 15; Ehlert, 402 U.S. at 105; Bone, 493 vy at te sg :

particularly so here because Congress gave to rr gt tas

of i z ting congressional intent. § 1631(a)(1), U.S.C.

1383(a)(1). In sum, we conclude that the Secretary’s reading of

is regulations is consistent with and supports the proper reading

of § 1631.

A-9

ual’s spouse, including to “the legal representative of the

estate of the deceased.” § 204(d)(7). But when Congress

wished to incorporate parts of Title II into the newer Title

XVI, it did so explicitly. For example, subsection (d) (1)

of $1631, the very section with which we are concerned,

selectively incorporates into Title XVI procedures speci-

fied in parts of Title Il. Moreover, we cannot infer such

incorporation here because the Title II provision for pay-

ing “the legal representative of the estate” conflicts directly

with the language of 4 1631(b) and the House Report’s

statement that “[u]nderpayments ... would not be paid

to the estate of a deceased since that would not further

the objective of meeting the current needs of individuals.”

Ms. Smith responds next that § 1631(a)(2) indicates the

propriety of payment to a payee other than the eligible

individual or his spouse. That provision reads in part:

Payments of the benefit of any individual may be made

to any such individual or to his eligible spouse (if any)

or partly to both, or, if the Secretary deems it ap-

propriate to any other person (including an appro-

priate public or private agency) who is interested in

or concerned with the welfare of such individual (or

spouse).

Regardless of the proper interpretation of this provision

vis-a-vis regular SSI payments, Congress has provided

that underpayments should be distributed in accordance

with subsection (b), specifically dealing with underpay-

ments. And “[f]undamental maxims of statutory construc-

tion require that a specific section be found to qualify a

general section. A specific statutory provision will govern

even though general provisions, if standing alone, would

A-10

include the same subject.” Monte Vista Lodge, 384 F.2d at

129; see Clifford F. MacEvoy Co. v. United States ex rel.

Calvin Tompkins Co., 322 U.S. 102, 107 (1944).

Ms. Smith argues finally, and most powerfully, that her

construction better satisfies the general congressional pol-

icy underlying Title XVI of helping the elderly and dis-

abled. She notes that families will be less willing to assist

their aged and disabled relatives if they fear that they will

not obtain reimbursement should their relative pass away

before payment. She also notes that the Secretary’s inter-

pretation in essence “rewards” the Secretary for failing to

process claims quickly and accurately because the Govern-

ment may avoid paying monies otherwise due should an

eligible individual without an eligible spouse die before

payment (as in this case). Finally, she contends that the

Secretary’s interpretation creates an incongruous scheme

wherein the Secretary can pay regular SSI benefits under

subsection (a)(2) but not underpayments under subsec-

tion (b) to individuals other than an eligible spouse.

We have a good deal of sympathy for Ms. Smith’s policy

claims. We are afraid, however, that in light of the legis-

lative history and language of § 1631(b), we must reject

her effort to redesign the statute. For as the Supreme

Court has recently written:

[A]s the second Mr. Justice Harlan said, when speak-

ing for the Court in another context, a statute “is not

an empty vessel into which this Court is free to pour

a vintage that we think better suits present-day

tastes.” United States v. Sisson, 399 U.S. 267, 297

(1970). Considerations of this kind are for Congress,

not the courts.

A-11

National Broiler Marketing Association v. United States,

46 U.S.L.W. 4620, 4623 (U.S. June 12, 1978).*

*In the interpretation of his regulations the Secretary has recog-

nized the same limitation. In January of 1974 the Secretary first

roposed regulations dealing with underpayments, writing: “If

ere is no surviving eligible spouse, no one can receive the under-

payment.” 39 Fed. Reg. 2012 (1974). After receiving comments

about the proposed regulations, the Secretary noted:

With respect to the limitation . . . on payment of an under-

payment due a deceased individual, the comments said the

prohibition against paying underpa ts to the estate of the

recipient seemed to violate the spirit of the Social Security Act

and might deprive an individual nsible for the medical or

burial costs of funds to pay them. However, section 1831 b)

of the Social Security Act authorized the payment of an under-

payment only to a surviving spouse eligible for supplemental

security income and living with the individual when he died.

AFFIRMED.

TT A nT eee ee

A-12

Jeanine R. Smith, etc. v. Joseph Califano, ete.

No. 77-1296

MERRILL, Circuit Judge, dissenting:

I dissent. I would reverse and restore the decision of

the ALJ.

Under the Secretary’s construction of §1631(b), as

adopted by the majority opinion, the recipient is deprived

of any ability to secure credit on the basis of his SSI

payments that would survive death. Without such credit,

private homes for the aged and infirm are not likely to

welcome those without independent financial resources and

the Act fails to provide adequately for those most in need

of their SSI payments. The Act, with the Secretary’s

blessing, seems to work most zealously against its own

apparent purpose.

The majority opinion relies on the fact that §¢ 1631(b)

does not include the words “other persons” which are to

be found in §1631(a). However, Regulations 416.601(a)

and (b) are broadly stated to permit payment to one other

than the eligible individual in all cases where it appears to

the administration that the interest of the recipient would

be served. That should cover this case.

In footnote 7 the majority opinion rejects the application

of those regulations to $1631(b), stating that to apply

them would “abrogate the limits of [that section] that

Congress intended to apply to underpayments. Instead,

underpayments would essentially be subject to the same

rule as are regular payments under § 1631(a)(2).”

ep a nr I EE a =

A-13

If full force is to be given to the literal distinction be-

tween §$§ 1631(a) and (b), on which the majority relies,

the result would be that while regular payments can be

made to a representative payee, adjustments for under-

payments never can. I can see little sense in such a dis-

tinction. But more: As I understand the practices of the

Secretary and his interpretations of the regulation, the

emphasis has not been on the difference between regular

payments and underpayments. Rather, it has been on

whether the recipient is living or dead. The Appeals Coun-

cil in this case relied on this living/dead distinction as

quoted by the government in its brief. “[I]t is evident

from § 416.601(a) that payment through a representative

payee is contemplated only where the eligible individual is

living.” The cited regulation does not expressly impose

this condition. But in any event it would appear that the

Secretary quite sensibly does not hesitate to adjust for

an underpayment by paying a representative if the recip-

ient is alive.

The legislative history as quoted in the majority opinion

explicitly provides only that underpayments are not to be

made to the estate of a deceased recipient. This makes

sense to me, since otherwise general creditors could reach

the payment. However, nothing in the quoted legislative

history would preclude applying Regulation 416.601(b) to

§ 1631(b) and to Regulation 416.542(b) so long as payment

did not reach the estate. The ALJ as quoted in the ma-

jority opinion showed just how that could be done. The

payment could be made directly to the representative payee

on his making a proper showing of entitlement.

A-14

The question, then, as I perceive it, is not whether the

statutory distinction between underpayment and regular

payment must be respected literally. (The Secretary him-

self apparently does not respect it.) The question is

whether (assuming that payment is not made to the estate

of a deceased recipient) the distinction between living and

dead recipients (not required by the statute, or even ex-

plicitly by the regulations), can be said to satisfy the

general congressional policy underlying the Act. I would

say no.

Appendix B

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

Jeanine R. Smirn, Successor Party in |

Interest,

Rosette V. Guwer, deceased,

bi . §-75-3292-TIM

Caspar WEINBERGER, Secretary of Health, JUDGMENT

Education, and Welfare,

Defendant. ,

[Original Filed October 22, 1976]

This Court having heretofore made and entered its Order

Granting Defendant’s Motion for Summary Judgment, And

Denying Plaintiff’s Motion for Summary Judgment, and

good cause appearing therefor,

IT IS HEREBY ORDERED, ADJUDGED AND

DECREED that defendant have and take judgmert against

plaintiff in the above entitled cause, and that plaintiff take

nothing by reason of her complaint.

DATED: Oct 22, 1976

THomas J. MacBripe

Chief United States

District Judge

B-2

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

a

Jeanine R. Smiru, Successor Party in

CIVIL NO.

Interest, S-75-322-T]M

Rosetre V. Guiwet, deceased, ORDER GRANTING

inti DEFENDANT'S

Plaintiff, | MOTION FOR

v. SUMMARY

| OP DENYING.

Caspak W. Weinpercer, Secretary of FLAINTIFE'S,

‘Health, Education, and Welfare, SUMMARY

Defendant. : JUDGMENT

[Original Filed October 22, 1976]

The above entitled cause came on regularly for hearing

on October 18. 1976 before the Honorable Thomas J. Mac-

Bride, Chief United States District Judge, on the parties’

eross-motions for summary judgment. Plaintiff appeared

by and through her attorney Thomas E. Hookano, Esq.

Defendant appeared by and through his attorney Richard

W. Nichols, Chief Assistant U. S. Attorney. The matter

having been submitted to the Court, and the Court being

fully apprised in the premises, and good cause appearing,

IT 18, THEREFORE, ORDERED, ADJUDGED AND

DECREED that plaintiff’s motion for summary judgment

be, and the same is hereby, denied;

AND IT IS FURTHER ORDERED, ADJUDGED AND

DECREED that defendant’s motion for summary judgment

be, and the same is hereby, granted.

DATED: Oct 22, 1976

TxHomas J. MacBripr

Chief United States

District Judge

Appendix C

42 U.S.C. § 1381

§ 1381. Statement of purpose; authorization of appropria-

tions

For the purpose of establishing a national program to

provide supplemental security income to individuals who

have attained age 65 or are blind or disabled, there are

authorized to be appropriated sums sufficient to carry out

this subchapter.

42 U.S.C. § 1381a

§ 1381la. Basic entitlement to benefits

Every aged, blind, or disabled individual who is deter-

mined under part A to be eligible on the basis of his

income and resources shall, in accordance with and sub-

ject to the provisions of this subchapter, be paid benefits

by the Secretary of Health, Education, and Welfare.

42 U.S.C. § 1382(a)

Part A—DETERMINATION oF BENEFITS

§ 1382. Eligibility for benefits—Definition of eligible in-

dividual

(a)(1) Each aged, blind, or disabled individual who does

not have an eligible spouse and—

(A) whose income, other than income excluded pur-

suant to section 1382a(b) of this title, is at a rate of

not more than $1,752 (or, if greater, the amount deter-

mined under section 1382f of this title) for the calendar

year 1974, or any calendar year thereafter, and

(B) whose resources, other than resources excluded

pursuant to section 1382b(a) of the title, are not more

than (i) in case such individual has a spouse with

C-2

‘ 42 U.S.C. § 1382(a)

whom he is living, $2,250, or (ii) in case such indi-

vidual has no spouse with whom he is living, $1,500,

shall be an eligible individual for purposes of this sub-

chapter.

(2) Each aged, blind, or disabled individual who has an

eligible spouse and—

(A) whose incom~ (together with the income of such

spouse), other than income excluded pursuant to sec-

tion 1382a(b) of this title, is at a rate of not more than

$2,628 (or, if greater, the amount determined under

section 1382f of this title) for the calendar year 1974,

or any calendar year thereafter, and

(B) whose resources (together with the resources

of such spouse) other than resources excluded pursuant

to section 1382b(a) of this title, are not more than

$2,250,

shall be an eligible individual for purposes of this sub-

chapter.

42 U.S.C. § 1383

§ 1383. Procedure for payment of benefits—Time, manner,

_ form, and duration of payments; promulgation of

regulations 7

~(a)(1) Benefits under this subchapter shall be paid at

such time or times and in such installments as will best

effectuate the purposes of this subchapter, as determined

under regulations (and may in any case be paid less

frequently than monthly where the amount of the monthly

benefit would not exceed $10).

C-3

42 U.S.C. § 1383

(2) Payments of the benefit of any individual may be

made to any such individual or to his eligible spouse (if

any) or partly to each, or, if the Secretary deems it ap-

propriate to any other person (including an appropriate

public or private agency) who is interested in or concerned

with the welfare of such individual (or spouse). Notwith-

standing the provisions of the preceding sentence, in the

case of any individual or eligible spouse referred to in

section 1382(e)(3)(A) of this title, the Secretary shall

provide for making payments of the benefit to any other

person (including an appropriate public or private agency)

who is interested in or concerned with the welfare of such

individual (or spouse).

(3) The Secretary may by regulation establish ranges

of incomes within which a single amount of benefits under

this subchapter shall apply.

(4) The Secretary—

(A) may make to any individual initially applying

for benefits under this subchapter who is presumptively

eligible for such benefits and who is faced with financial

emergency a cash advance against such benefits in an

amount not exceeding $100; and

(B) may pay benefits under this subchapter to an

individual applying for such benefits on the basis of

disability or blindness for a period not exceeding 3

months prior to the determination of such individual’s

disability or blindness, if such individual is pre-

sumptively disabled or blind and is determined to be

otherwise eligible for such benefits, and any benefits

so paid prior to such determination shall in no event

be considered overpayments for purposes of subsection

C4

42 U.S.C. § 1383

(b) of this section solely because such individual is

determined not to be disabled or blind.

(5) Payment of the benefit of any individual who is an

aged, blind, or disabled individual solely by reason of blind-

ness (as determined under section 1382¢(a) (2) of this title)

or disability (as determined under section 1382c(a)(3) of

this title), and who ceases to be blind or to be under such

disability, shall continue (so long as such individual is

otherwise eligible) through the second month following the

month in which such blindness or disability ceases.

Overpayments and underpayments; adjustment, recovery,

or payment of amounts by Secretary

(b) Whenever the Secretary finds that more or less than

the correct amount of benefits has been paid with respect

to any individual, proper adjustment or recovery shall,

subject to the succeeding provisions of this subsection, be

made by appropriate adjustments in future payments to

such individual or by recovery from or payment to such

individual or his eligible spouse (or by recovery from the

estate of either). The Secretary shall make such provision

as he finds appropriate in the case of payment of more than

the correct amount of benefits with respect to an individual

with a view to avoiding penalizing such individual or his

eligible spouse who was without fault in connection with

the overpayment, if adjustment or recovery on account of

such overpayment in such case would defeat the purposes

of this subchapter, or be against equity or good conscience,

or (because of the small amount involved) impede efficient

or effective administration of this subchapter.

i A arte cee

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42 U.S.C. § 1383

Hearing to determine eligibility or amount of benefits; time

within which to request hearing; time for determinations

of Secretary pursuant to hearing; judicial review

(c)(1) The Secretary is directed to make findings of fact,

and decisions as to the rights of any individual applying

for payment under this subchapter. The Secretary shall

provide reasonable notice and opportunity for a hearing to

any individual who is or claims to be an eligible individual

or eligible spouse and is in disagreement with any determi-

nation under this subchapter with respect to eligibility of

such individual for benefits, or the amount of such indi-

vidual’s benefits, if such individual requests a hearing on

the matter in disagreement within sixty days after notice

of such determination is received, and, if a hearing is held,

shall, on the basis of evidence adduced at the hearing affirm,

modify, or reverse his findings of fact and such decision.

The Secretary is further authorized, on his own motion, to

hold such hearings and to conduct such investigations and

other proceedings as he may deem necessary or proper for

the administration of this subchapter. In the course of any

hearing, investigation, or other proceeding, he may admin-

ister oaths and affirmations, examine witnesses, and receive

evidence. Evidence may be received at any hearing before

the Secretary even though inadmissible under the rules of

evidence applicable to court procedure.

(2) Determination on the basis of such hearing, except

to the extent that the matter in disagreement involves a

disability (within the meaning of section 1382¢e(a)(3) of

this title), shall be made within ninety days after the in-

dividual requests the hearing as provided in paragraph (1).

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42 US.C. § 1383

(3) The final determination of the Secretary after a

hearing under paragraph (1) shall be subject to judicial

review as provided in section 405(g) of this title to the

same extent as the Secretary’s final determinations under

section 405 of this title.

Procedures applicable; prohibition on assignment of pay-

ments ; representation of claimants; maximum fees; pen-

alties for violations

(d)(1) The provisions of section 407 of this title and

subsections (a), (d), (e), and (f) of section 405 of this title

shall apply with respect to this part to the same extent as

they apply in the case of subchapter II of this chapter.

(2) The Secretary may prescribe rules and regulations

governing the recognition of agents or other persons, other

than attorneys, as hereinafter provided, representing

claimants before the Secretary under this subchapter, and

may require of such agents or other persons, before being

recognized as representatives of claimants, that they shall

show that they are of good character and in good repute,

possessed of the necessary qualifications to enable them

to render such claimants valuable service, and otherwise

competent to advise and assist such claimants in the

presentation of their cases. An attorney in good standing

who is admitted to practice before the highest court of the

State, Territory, District, or insular possession of his

residence or before the Supreme Court of the United’

States or the inferior Federal courts, shall be entitled to

represent claimants before the Secretary. The Secretary

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42 U.S.C. § 1383

may, after due notice and opportunity for hearing, suspend

or prohibit from further practice before him any such

person, agent, or attorney who refuses to comply with the

Secretary’s rules and regulations or who violates any pro-

vision of this paragraph for which a penalty is prescribed.

The Secretary may, by rule and regulation, prescribe the

maximum fees which may be charged for services per-

formed in connection with any claim before the Secretary

under this subchapter, and any agreement in violation of

such rules and regulations shall be void. Any person who

shall, with intent to defraud, in any manner willfully and

knowingly deceive, mislead, or threaten any claimant or

prospective claimant or beneficiary under this subchapter

by word, circular, letter, or advertisement, or who shall

knowingly charge or collect directly or indirectly any fee

in excess of the maximum fee, or make any agreement

directly or indirectly to charge or collect any fee in excess

of the maximum fee, prescribed by the Secretary, shall be

deemed guilty of a misdemeanor and, upon conviction

thereof, shall for each offense be punished by a fine not

exceeding $500 or by imprisonment not exceeding one year,

or both.

Administrative requirements prescribed by Secretary;

criteria; reduction of benefits to individual for noncom-

pliance with requirements

(e)(1)(A) The Secretary shall, subject to subparagraph

(B), prescribe such requirements with respect to the filing

of applications, the suspension or termination of assist-

ance, the furnishing of other data and material, and the

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42 U.S.C. § 1383

reporting of events and changes in circumstances, as may

be necessary for the effective and efficient administration

of this subchapter.

(B) The requirements prescribed by the Secretary pur-

suant to subparagraph (A) shall require that eligibility

for benefits under this subchapter will not be determined

solely on the basis of declarations by the applicant con-

cerning eligibility factors or other relevant facts, and that

relevant information will be verified from independent or

collateral sources and additional information obtained as

necessary in order to assure that such benefits are only

provided to eligible individuals (or eligible spouses) and

that the amounts of such benefits are correct.

(2) In case of the failure by any individual to submit

a report of events and changes in circumstances relevant

to eligibility for or amount of benefits under this sub-

chapter as required by the Secretary under paragraph (1),

or delay by any individual in submitting a report as so

required, the Secretary (in addition to taking any other

action he may consider appropriate under paragraph (1) )

shall reduce any benefits which may subsequently become

payable to such individual under this subchapter by—

(A) $25 in the case of the first such failure or

delay,

(B) $50 in the case of the second such failure or

delay, and

= (C) $100 in the case of the third or a subsequent

such failure or delay,

except where the individual was without fault or good

cause for such failure or delay existed.

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42 U.S.C. $ 1383

Furnishing of information by Federal agencies

(f) The head of any Federal agency shall provide such

information as the Secretary needs for purposes of deter-

mining eligibility for or amount of benefits, or verifying

other information with respect thereto,

Reimbursement to States for interim assistance payments;

definitions; agreement; hearing provisions inapplicable

to disagreements concerning payments

(g)(1) Notwithstanding subsection (d)(1) of this sec-

tion and subsection (b) of this section as it relates to the

payment of less than the correct amount of benefits, the

Secretary may, upon written authorization by an individ-

ual, withhold benefits due with respect to that individual

and may pay to a State (or a political subdivision thereof

if agreed to by the Secretary and the State) from the

benefits withheld an amount sufficient to reimburse the

State (or political subdivision) for interim assistance fur-

nished on behalf of the individual by the State (or political

subdivision).

(2) For purposes of this subsection, the term “benefits”

with respect to any individual means supplemental security

income benefits under this subchapter, and any State sup-

plementary payments under section 1382e of this title or

under section 212 of Public Law 93-66 which the Secretary

makes on behalf of a State (or political subdivision there-

of), that the Secretary has determined to be due with

respect to the individual at the time the Secretary makes

the first payment of benefits. A cash advance made pur-

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42 U.S.C. §$ 1383

suant to subsection (a)(4)(A) of this section shall not be

considered as the first payment of benefits for purposes

of the preceding sentence.

(3) For purposes of this subsection, the term “interim

assistance” with respect to any individual means assistance

financed from State or local funds and furnished for meet-

ing basic needs during the period, beginning with the

month in which the individual filed an application for bene-

fits (as defined in paragraph (2)), for which he was eligible

for such benefits.

(4) In order for a State to receive reimbursement under

the provisions of paragraph (1), the State shall have in

effect an- agreement with the Secretary which shall pro-

vide—

(A) that if the Secretary makes payment to the

State (or a political subdivision of the State as pro-

vided for under the agreement) in reimbursement for

interim assistance (as defined in paragraph (3)) for

any individual in an amount greater than the reim-

bursable amount authorized by paragraph (1), the

State (or political subdivision) shall pay to the indi-

vidual the balance of such payment in excess of the

reimbursable amount as expeditiously as possible, but

in any event within ten working days or a shorter

period specified in the agreement; and

(B) that the State will comply with such other rules

as the Secretary finds necessary to achieve efficient

and effective administration of this subsection and to

- carry out the purposes of the program established

by this subchapter, including protection of hearing

rights for any individual aggrieved by action taken by

C-11 .

42 U.S.C. § 1383

the State (or political subdivision) pursuant to this

subsection. ;

(5) The provisions of subsection (ce) of this section

shall not be applicable to any disagreement concerning

payment by the Secretary to a State pursuant to the pre-

ceding provisions of this subsection nor the amount re-

tained by the State (or ‘political subdivision)»

20 C.F.R. § 416.536 (1975)

§ 416.536 Underpayments—defined.

An underpayment can occur only with respect to a period

for which a recipient filed application (where required) for

benefits and met all conditions of eligibility therefor. An

underpayment, including any amounts of State supplemen-

tary payments which are due and administered by the

Social Security Administration, is:

20 C.F.R. § 416.536 (1975)

(a) Nonpayment, where payment for a quarter (or

month, where applicable) was due but was not made, and

(b) Payment of less than the amount due for any quar-

ter (or month, where applicable).

20 C.F.R. § 416.542(b) (1975)

(b) Underpaid recipient dead—underpayment payable.

If a recipient dies before the amount due him has been paid

to him, or before he endorses the check representing the

correct payment, the amount of the underpayment may be

paid only to his surviving spouse and then only if such

spouse was eligible for supplemental security income bene-

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20 C.F.R. § 416.542(b) (1975)

fits and was living with the underpaid recipient when he

died or was not separated from him for 6 months at the

time of death. No underpayment may be paid to the estate

of any underpaid recipient, the estate of the surviving

spouse, or to any survivor other than the living-with elig-

ible spouse.

20 C.F.R. § 416.601 (1974)

§ 416.601 Payments on behalf of a recipient.

(a) Payments to recipient or representative payee.

(1) When it appears to the Administration that the inter-

est of a recipient of payments under title XVI of the Act

would be served thereby, certification of payment may be

made by the Administration, regardless of the legal com-

petency or incompetency of the recipient eligible thereto,

either for direct payment to such recipient, or for his use

and benefit to a relative or some other person (including

an appropriate public or private agency) selected by the

Administration as the “representative payee” of the recip-

ient. (2) In the case of an individual who is eligible for

benefits solely on the basis of disability and who is medi-

cally determined to be a drug addict or an alcoholic, the

Administration will provide for the payment of benefits to

a representative payee, as specified by section 1631(a) (2)

of the Act. This may be accomplished through a variety

of arrangements, such as certification of payment to an

individual interested in or concerned with the eligible indi-

vidual or eligible spouse, to a treatment facility or center

providing services to such individual or spouse, to a social

services agency concerned with drug addiction or aleohol-

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20 C.F.R. § 416.601 (1974)

ism, or to any other individual or agency which is found

appropriate for this purpose. These arrangements will be

utilized to the end that payment of benefits for all such

individuals will be made to a representative payee. (3)

When it appears that an individual (other than a disabled

person who is medically determined to be a drug addict or

an alcoholic) who is receiving payments may be incapable

of managing such payments in his own interest, the Ad-

ministration shall, if such individual is age 18 or over, and

has not been adjudged legally incompetent, continue pay-

ments to such individual pending a determination as to his

capability of managing payments and the selection of a

representative payee. (See Subpart N of this part for pro-

visions relating to determinations and administrative and

judicial review of determinations.)

(b) Effect of payments to representative payee. Pay-

ments made in accordance with paragraph (a) of this sec-

tion to a representative payee of an eligible individual or

eligible spouse shali constitute payments to such eligible

individual or eligible spouse.