# SSR 63-42c: SSR 63-42c: SECTION 209. -- WAGES -- EXTENT AND VALUE OF SERVICES

> Federal · Rulings · In force

URL: https://www.frixlaw.com/law-library/statutes/SSA_SSR_OASI_SSR_63_42c

## Section

- **Citation:** SSR 63-42c
- **Heading:** SSR 63-42c: SECTION 209. -- WAGES -- EXTENT AND VALUE OF SERVICES
- **Jurisdiction:** Federal
- **Kind:** Rulings
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** Social Security Rulings / OASI / Definition of Wages / SSR 63-42c

## Text

20 CFR 404.1026

SSR 63-42c

POSS v. RIBICOFF, 289 F.2d 10 (2d Cir., 1961), cert. denied, 82 S.Ct. 178,
368 U.S. 902 (1961), rehearing denied, 82 S.Ct. 393, 368 U.S. 963
(1962) [1]

The United States Court of Appeals for the Second Circuit, in a per
curiam opinion, upheld the Secretary's decision that the amount of wages
creditable to the wife's social security earnings account were only $600
in 1956 and $150 in each of the first two quarters of 1957 and that any
additional monies nominally paid her were not wages for her services, but
were wages paid through her to her husband. The Secretary's decision had
been upheld by the United States District Court for the Eastern District
of New York in Poss v. Flemming, 187 F.Supp. 824 (1960). The District
Court in its decision (Abruzzo, District Judge) summarized the facts as
follows:

"Alsam Holding Co., Inc., and Howard Funding Co., Inc., are real estate
corporations. Each corporation owns an apartment building which they have
owned for many years. The two corporations were formed some 25 years ago.
In Alsam, Jacob, the husband of the plaintiff and a lawyer, owned 50 per
cent of the stock, and his brother, Samuel, owned the other 50 per cent.
In Howard, Jacob owned one-third of the stock, his brother, Samuel,
one-third, and the remaining one-third is owned by H. D. Pasachoff, a
nephew of the two brothers.

"Plaintiff claims that her husband served as secretary of the two
corporations until his resignation on July 1, 1956. In June, 1956, at a
family dinner, plaintiff was advised that she would be designated
secretary of the corporations effective July 1, 1956, in place of her
husband. She also claims that in 1956 and 1957 no salary was paid to her
husband and the salary apparently ordinarily paid to him was paid to her.
Plaintiff became 65 years of age on September 21, 1957.
is resignation on July 1, 1956. In June, 1956, at a
family dinner, plaintiff was advised that she would be designated
secretary of the corporations effective July 1, 1956, in place of her
husband. She also claims that in 1956 and 1957 no salary was paid to her
husband and the salary apparently ordinarily paid to him was paid to her.
Plaintiff became 65 years of age on September 21, 1957.

"It is undisputed that the plaintiff performed secretarial and clerical
services for these two corporations at home for upwards of 15 to 20 years
without compensation. The Referee found that in 1953 the plaintiff
requested payment for services rendered. He also found that Alsam agreed
to pay plaintiff $50 a month and that she actually was paid this amount
beginning in 1954 until 1957, and that any other amounts paid in 1956 and
1957 did not represent wages paid to her, and that any wages allegedly
paid to her in fact represented wages paid to her husband. Howard did pay
her some salary but what amount the record is not clear.

* * * * * *

"At the hearing before the Referee, * * *, the Referee stated * * *:

"The Referee's decision is based on the assumption that the plaintiff's
appointment as secretary was not a bona fide change in employment. He
held:

"The Court has scrutinized carefully the transcript of the hearing before
the Referee. The testimony tends to cast doubt on whether the salary
claimed by the claimant was a legitimate one or one for the purpose of
building up Social Security benefits. The Referee in analyzing the proof
had to contend with the fact that for 1956 and 1957 none of the checks
issued by Howard was produced. As to plaintiff's failure to produce these
checks, suffice it to say that the Referee as trier of the facts placed no
credence in the affidavit submitted to him explaining plaintiff's failure
to produce these checks, and of six checks issued by Alsam in 1956
totaling $2,150, one check for $1,000 bore the notation 'Repayment of
Loan' * * *
ne of the checks
issued by Howard was produced. As to plaintiff's failure to produce these
checks, suffice it to say that the Referee as trier of the facts placed no
credence in the affidavit submitted to him explaining plaintiff's failure
to produce these checks, and of six checks issued by Alsam in 1956
totaling $2,150, one check for $1,000 bore the notation 'Repayment of
Loan' * * *. The 1956 tax returns * * * of both corporations under
Schedule 'D,' 'Compensation of Officers,' does not list plaintiff as
secretary or any other officer of either corporation. These exhibits
coupled with other factors are indicative of the fact that plaintiff's
alleged appointment as secretary of both corporations was a paper
transaction to permit both plaintiff and her husband to collect social
security benefits. [2] * * *

"Based upon the facts adduced, the circumstances surrounding the change
in salary of the plaintiff in 1956 and 1957 as compared with other years,
and the lack of positive proof by checks issued by either corporation 1956
and 1957, the Referee was justified in fixing the income for Social
Security purposes at $600 a year."

* * * * * *

"In its decision affirming the Secretary's decision, the Court of Appeals
(Per Curiam) stated in part:

"The appellant argues that the appellee has no right to inquire into the
bona fides of her appointment as Secretary or the value of her services as
a stenographer. But the money benefits to which a wage earner, (not
receiving disability benefits) is entitled under 42 U.S.C.A. § 402(a) are
computed by one of various formulae prescribed by 42 U.S.C.A. § 415(a),
each of which is dependent on 'wages.' Thus it was necessary for the
Secretary [of Health, Education, and Welfare] or his delegate to determine
what part of the payments nominally made to the appellant was paid as
'wages.' On this issue, the bona fides of the appellant's appointment as
Secretary and the actual nature, extent and value of her services were
relevant
42 U.S.C.A. § 415(a),
each of which is dependent on 'wages.' Thus it was necessary for the
Secretary [of Health, Education, and Welfare] or his delegate to determine
what part of the payments nominally made to the appellant was paid as
'wages.' On this issue, the bona fides of the appellant's appointment as
Secretary and the actual nature, extent and value of her services were
relevant. And we agree with Judge Abruzzo that the appellee's findings of
fact and the inferences to be drawn therefrom are supported by substantial
evidence and are therefore conclusive under 42 U.S.C.A. § 405(b). Adams v.
Flemming, 2 Cir., 276 F.2d 901, 903.

"Affirmed."

The Supreme Court denied the claimant's request for review of the case
and later denied her request for a rehearing on the request for review.

[1] See also Dondero v.
Celebrezze , 312 F.2d 677 (2d Cir., 1963). SSR 63-40c.

[2] As this sentence of the
court's decision implies, the wages paid through Mrs. Poss for the
services performed by her husband are his earnings for purposes of
applying the retirement test in the Social Security Act. [Ed.]

## Nearby sections

- [SSR 61-6 SSR 61-6. DOMESTIC SERVICE BY FAMILY MEMBER](https://www.frixlaw.com/law-library/statutes/SSA_SSR_OASI_SSR_61_6.md)
- [SSR 61-25 SSR 61-25. RAILROAD COMPENSATION CREDITABLE AS WAGES UNDER SOCIAL SECURITY ACT](https://www.frixlaw.com/law-library/statutes/SSA_SSR_OASI_SSR_61_25.md)
- [SSR 62-29 SSR 62-29. WAGES -- DOMESTIC SERVICE -- IDENTITY OF EMPLOYER](https://www.frixlaw.com/law-library/statutes/SSA_SSR_OASI_SSR_62_29.md)
- [SSR 62-63 SSR 62-63: Rescinded 1984](https://www.frixlaw.com/law-library/statutes/SSA_SSR_OASI_SSR_62_63.md)
- [SSR 63-18 SSR 63-18: SECTION 209. -- WAGES -- TRAVEL EXPENSES EXCEEDING ALLOWANCE FOR TRAVEL](https://www.frixlaw.com/law-library/statutes/SSA_SSR_OASI_SSR_63_18.md)
- [SSR 63-42c SSR 63-42c: SECTION 209. -- WAGES -- EXTENT AND VALUE OF SERVICES](https://www.frixlaw.com/law-library/statutes/SSA_SSR_OASI_SSR_63_42c.md)
- [SSR 64-8 SSR 64-8: SECTIONS 209 and 215. -- COMPUTATION OF BENEFITS -- ACCRUED WAGES PAID AFTER WORKER'S DEATH BUT WITHIN YEAR OF DEATH](https://www.frixlaw.com/law-library/statutes/SSA_SSR_OASI_SSR_64_8.md)
- [SSR 64-59 SSR 64-59: SECTIONS 209(b), (c), and (e). -- WAGES -- PURCHASE OF ANNUITIES BY SCHOOL DISTRICTS FOR THEIR EMPLOYEES THROUGH VOLUNTARY SALARY REDUCTION PLANS](https://www.frixlaw.com/law-library/statutes/SSA_SSR_OASI_SSR_64_59.md)
- [SSR 67-41a SSR 67-41a: SECTION 209(g)(1). -- WAGES -- NONCASH PAYMENTS -- DOMESTIC EMPLOYMENT WHEN CHURCH IS THE EMPLOYER](https://www.frixlaw.com/law-library/statutes/SSA_SSR_OASI_SSR_67_41a.md)
- [SSR 70-10 SSR 70-10: SECTION 209(h). -- WAGES -- CASH REMUNERATION FOR AGRICULTURAL LABOR -- COUPON BOOKS ISSUED BY EMPLOYER](https://www.frixlaw.com/law-library/statutes/SSA_SSR_OASI_SSR_70_10.md)
- [SSR 70-11 SSR 70-11: SECTION 209(h). -- WAGES -- CASH REMUNERATION FOR AGRICULTURAL LABOR -- UNITED STATES SAVINGS BONDS, SERIES E](https://www.frixlaw.com/law-library/statutes/SSA_SSR_OASI_SSR_70_11.md)
- [SSR 70-43 SSR 70-43: SECTION 209. -- WAGES -- STATUS OF UNIFORM ALLOWANCES TO EMPLOYEES OF A STATE OR POLITICAL SUBDIVISION](https://www.frixlaw.com/law-library/statutes/SSA_SSR_OASI_SSR_70_43.md)
- [SSR 72-56 SSR 72-56: SECTION 209(b) and (d) (42 U.S.C. 409(b) AND (d)). -- STATE AND LOCAL COVERAGE -- WAGES -- STATUS OF REMUNERATION PAID TO PUBLIC EMPLOYEES ABSENT FROM WORK DUE TO ILLNESS](https://www.frixlaw.com/law-library/statutes/SSA_SSR_OASI_SSR_72_56.md)
- [SSR 72-57 SSR 72-57: SECTION 209(g)(2) and 214(a) (42 U.S.C. 409(g)(2) and 414(a)). -- WAGES -- DOMESTIC SERVICE -- IDENTITY OF EMPLOYER -- INSURED STATUS](https://www.frixlaw.com/law-library/statutes/SSA_SSR_OASI_SSR_72_57.md)

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/SSA_SSR_OASI_SSR_63_42c. Check the current official text before relying on it. Not legal advice.