AR 97-1(1): AR 97-1 (1): Parisi By Cooney v. Chater , 69 F.3d 614 (1st Cir. 1995) -- Reduction of Benefits Under the Family Maximum In Cases Involving Dual Entitlement--Title II of the Social Security Act.

AR 97-1 (1) (Rescinded 10/27/99)

EFFECTIVE/PUBLICATION DATE: 01/13/97

Acquiescence Ruling 97-1(1)

Issue:

Whether, in determining the amount of benefit reduction under the maximum

family benefits provision in section 203(a) of the Social Security Act

(the Act) in cases where a beneficiary is entitled to benefits on more

than one earnings record, only those monthly benefits payable on the

worker's earnings record after application of the simultaneous benefit

provisions are included in calculating the total monthly benefits payable

on that record.

Statute/Regulation/Ruling Citation:

Sections 202(k)(3)(A), 202(r) and 203(a) of the Social Security Act (42

U.S.C. 402(k)(3)(A), 402(r) and 403(a)); 20 CFR 404.304(d), 404.403,

404.404, 404.407(a), 404.623; Social Security Ruling

62-7 .

Circuit:

First (Maine, New Hampshire, Massachusetts, Rhode Island, Puerto Rico).

Parisi By Cooney v. Chater, 69 F.3d 614 (1st Cir. 1995).

Applicability of Ruling:

This Ruling applies to determinations or decisions at all administrative

levels (i.e., initial, reconsideration, Administrative Law Judge (ALJ)

hearing or Appeals Council).

Description of Case:

Anthony Parisi, the worker, became disabled in February 1988. He and

Anthony Parisi II, his dependent child and the plaintiff in this case,

began receiving Social Security benefits on Anthony Parisi's earnings

record. In 1991, Adriana Parisi, the worker's spouse, became entitled to

retirement benefits (old-age benefits) based on her own earnings record.

Under section 202(r) of the Act, Adriana was deemed also to have applied

for and become entitled to wife's benefits based on the worker's earnings

record

tiff in this case,

began receiving Social Security benefits on Anthony Parisi's earnings

record. In 1991, Adriana Parisi, the worker's spouse, became entitled to

retirement benefits (old-age benefits) based on her own earnings record.

Under section 202(r) of the Act, Adriana was deemed also to have applied

for and become entitled to wife's benefits based on the worker's earnings

record. The Social Security Administration (SSA) determined under section

202(k)(3)(A) of the Act that because the monthly retirement benefits that

Adriana was entitled to receive on her own record exceeded the amount of

her monthly wife's benefits on Anthony Parisi's earnings record, she could

only receive payment for the retirement benefits payable on her own

earnings record.

SSA counted the wife's benefits to which Adriana was entitled, but which

were not actually paid to her, toward the monthly maximum amount of

benefits payable on Anthony Parisi's earnings record under section 203(a)

of the Act (the family maximum). Because the total monthly amount of

Anthony's disability benefits, the plaintiff's child's benefits, and

Adriana's wife's benefits exceeded the monthly family maximum limit, SSA

reduced the amount of the plaintiff's and the wife's monthly benefits.

The plaintiff's request for reconsideration of the benefit reduction was

denied, and he requested a hearing before an ALJ. The ALJ found that

Adriana's wife's benefits should not be counted toward the family maximum.

However, the Appeals Council reversed the ALJ's decision and the plaintiff

appealed to the district court. The district court found that the family

maximum limit on monthly benefits was meant to include only "effective

entitlements" that result in actual payment of benefits

earing before an ALJ. The ALJ found that

Adriana's wife's benefits should not be counted toward the family maximum.

However, the Appeals Council reversed the ALJ's decision and the plaintiff

appealed to the district court. The district court found that the family

maximum limit on monthly benefits was meant to include only "effective

entitlements" that result in actual payment of benefits. Because Adriana's

entitlement to wife's benefits was only "conditional" upon her not being

entitled to a greater amount of monthly benefits on her own earnings

record, the district court concluded that Adriana's wife's benefits should

not be counted toward the family maximum. SSA appealed and the United

States Court of Appeals for the First Circuit, while offering somewhat

different reasoning, found that the district court correctly reversed the

Appeals Council's decision.

Holding:

After reviewing the statutory language in sections 203(a) and 202(k)(3)(A)

of the Act, the legislative history, SSA's regulations and policy

considerations, the Court of Appeals held that "Adriana's non-payable

spousal benefits d[id] not count toward the section [2]03(a) 'family

maximum' . . . [because] section [2]03(a) operates to limit the total

amount of benefits actually payable on a single worker's record, not the

amount of entitlements theoretically available." The court further held

that because Adriana's deemed entitlement to wife's benefits resulted in

"zero payable benefits" under section 202(k)(3)(A) of the Act, none of her

benefits should be included in the family maximum computation required

under section 203(a).

al

amount of benefits actually payable on a single worker's record, not the

amount of entitlements theoretically available." The court further held

that because Adriana's deemed entitlement to wife's benefits resulted in

"zero payable benefits" under section 202(k)(3)(A) of the Act, none of her

benefits should be included in the family maximum computation required

under section 203(a).

Without reviewing SSA's definition of "entitlement," the court reasoned

that, if SSA was correct in arguing that section 203(a) of the Act places

a limit on entitlements, it would be contradictory and impossible to

enforce compliance with the family maximum cap by reducing payable

benefits. The court held that section 203(a) of the Act requires SSA to

consider the actual amount of benefits payable under the relevant benefits

provisions (read as a whole), not purely theoretical entitlements, in

calculating the total monthly benefits payable on the worker's earnings

record. The court noted that its conclusion did not undermine SSA's

definition of "entitlement" and that Adriana had entitlement, in an

abstract way, to wife's benefits under section 202(b)(1) of the

Act. [1]

The court also held that the statutory language requires that monthly

benefits be reduced under the family maximum only as much " as

necessary " to enforce compliance and that, because the reduction in

Parisi's case depended on the calculation of Adriana's wife's benefits,

which amounted to zero due to her simultaneous entitlement to a higher

benefit on her own earnings record, a reduction was not necessary.

Accordingly, the court concluded that the total amount of benefits payable

on the worker's record did not exceed the family maximum and that

Anthony's child's benefits should not be reduced.

Statement As To How Parisi Differs From Social Security

Policy

ich amounted to zero due to her simultaneous entitlement to a higher

benefit on her own earnings record, a reduction was not necessary.

Accordingly, the court concluded that the total amount of benefits payable

on the worker's record did not exceed the family maximum and that

Anthony's child's benefits should not be reduced.

Statement As To How Parisi Differs From Social Security

Policy

Section 203(a) of the Act establishes a limit, derived from the worker's

primary insurance amount, on the total monthly benefits to which

dependents or survivors may be entitled on the basis of one worker's

earnings record (the family maximum). Under SSA's regulations implementing

section 203(a) of the Act (20 CFR 404.403 and 404.404), the benefits of

each claimant entitled on a worker's earnings record are reduced

proportionately so that the total benefits of those entitled on the record

in one month do not exceed the family maximum. In calculating total

monthly benefits, SSA includes all benefits of the claimants who are

entitled on the worker's record without considering whether the benefits

are actually due or payable.

The Parisi court held that, when computing a reduction under the

family maximum pursuant to section 203(a) of the Act, SSA should not

include the monthly benefit that would otherwise be payable to the spouse

if payment of that spouse's benefit is precluded by section 202(k)(3)(A)

of the Act due to the spouse's simultaneous entitlement to a higher

benefit on the spouse's own earnings record.

Explanation of How SSA Will Apply The Parisi Decision Within

The Circuit

This Ruling applies only to cases involving claimants whose benefits are

reduced because of the family maximum and who reside in Maine, New

Hampshire, Massachusetts, Rhode Island or Puerto Rico at the time of the

determination or decision at any administrative level, i.e., initial,

reconsideration, ALJ hearing or Appeals Council.

How SSA Will Apply The Parisi Decision Within

The Circuit

This Ruling applies only to cases involving claimants whose benefits are

reduced because of the family maximum and who reside in Maine, New

Hampshire, Massachusetts, Rhode Island or Puerto Rico at the time of the

determination or decision at any administrative level, i.e., initial,

reconsideration, ALJ hearing or Appeals Council.

When the total benefits due or payable for any month on the earnings

record of a worker exceed the maximum amount under section 203(a) of the

Act (the family maximum applies) and a person entitled on the worker's

earnings record is simultaneously entitled to benefits on another earnings

record, SSA will consider only the amount of monthly dependent's or

survivor's benefits actually due or payable to the simultaneously-entitled

person when determining the amount of the benefit reduction because of the

family maximum. Adjudicators will continue to apply SSA's other policies

for applying and calculating the family maximum reduction.

[1] The First Circuit's

reasoning differed from the district court's analysis that distinguished

between "effective" and "conditional" entitlements. The court held that

this distinction had "no roots in the statutory language."