SSR 66-26: SECTIONS 202(a) AND 202(J)(2). -- APPLICATION FOR BENEFITS -- PROSPECTIVE EFFECTIVENESS TO ESTABLISH ENTITLEMENT AFTER REOPENING OF INITIAL DETERMINATION

THIS RULING MODIFIES SSR 64-34c, C.B. 1964, p. 24.

SSR 66-26

On January 28, 1957, R filed application for old-age insurance benefits

under the provisions of section 202(a) of the Social Security Act. Under

the requirements of that section as then in effect, in addition to having

an insured status and filing an application, a man must have attained age

65 to become entitled to such benefits. On his application, R stated he

was born on April 17, 1890, and in support of his statement he submitted a

Certificate in Lieu of Lost or Destroyed Discharge Certificate issued by

the U.S. War Department in 1944. Based on the evidence submitted, it was

determined on March 12, 1957, that R had attained age 65 and he was found

entitled to old-age insurance benefits effective January 1956.

Benefits were paid to R from January 1956 through April 1964. In May

1964, on the basis of newly acquired evidence, it was established that the

Certificate in Lieu of Lost or Destroyed Discharge Certificate did not

pertain to R but to someone else with the same name, and that R's correct

date of birth was February 12, 1897. Based upon a determination that

"fraud or similar fault" existed, the initial determination on R's claim

made on March 12, 1957, was reopened under the provisions of § 404.957(c)

of Social Security Administration Regulations No. 4 (20 CFR 404.957(c)).

(For illustration of "fraud or similar fault" as a basis for reopening a

final determination, see SSR

64-2 , C.B. 1964, p. 91.) R filed a second application for old-age

insurance benefits on August 24, 1964.

nitial determination on R's claim

made on March 12, 1957, was reopened under the provisions of § 404.957(c)

of Social Security Administration Regulations No. 4 (20 CFR 404.957(c)).

(For illustration of "fraud or similar fault" as a basis for reopening a

final determination, see SSR

64-2 , C.B. 1964, p. 91.) R filed a second application for old-age

insurance benefits on August 24, 1964.

A revised determination, notice of which was mailed R on December 30,

1964, found that R attained age 65 in February 1962, that he had not met

all the requirements for entitlement to old-age insurance benefits when he

filed application on January 28, 1957, and, accordingly, the benefits paid

to him on the basis of that application were incorrect. It was further

found that, based on R's second application, he was entitled to old-age

insurance benefits effective August 1963 (i.e., effective with the twelfth

month before the month in which the second application was filed), but

that benefits paid for the months January 1956 through July 1963

constituted an overpayment recovery of which could not waived under

section 204(b) of the Social Security Act because R had not been "without

fault" in the circumstances giving rise to the overpayment. (For

explanation of the requirement in section 204(b) that an overpaid

individual be "without fault," see SSR 64-2 , C.B. 1964, p. 91).

On January 22, 1965, R appealed from this revised determination by

requesting a hearing, contending that he should be found entitled to

old-age insurance benefits effective no later than February 1962, the

month in which it had been determined he attained age 65. (R stated that

he did not wish to receive reduced benefits for months before the month in

which he attained age 65.) A hearing was held in April 1965, but as of

July 30, 1965, the date of enactment of the Social Security Amendments of

1965 (P.L. 89-97), the hearing examiner had not yet rendered a

decision.

han February 1962, the

month in which it had been determined he attained age 65. (R stated that

he did not wish to receive reduced benefits for months before the month in

which he attained age 65.) A hearing was held in April 1965, but as of

July 30, 1965, the date of enactment of the Social Security Amendments of

1965 (P.L. 89-97), the hearing examiner had not yet rendered a

decision.

Section 202(j)(1) of the Act provides, in pertinent part, as follows:

Accordingly, on the basis of the second application filed in August 1964,

R could not have become entitled to old-age insurance benefits for any

month prior to August 1963. (The provisions of section 202(j)(1) of the

Act, as here pertinent, were not changed by the Social Security Amendments

of 1965.)

Section 202(j)(2) of the Act, as in effect prior to the Social Security

Amendments of 1965, provided that an application has an effective

prospective life of only three months:

When R attained age 65 in February 1962 and thus met the age requirement

of section 202(a) of the Act, he no longer met the application requirement

of section 202(a) since the application he filed in January 1957 was no

longer an effective application. He was not entitled to old-age insurance

benefits, therefore, on the basis of that application under the provisions

of the Act in effect prior to the Social Security Amendments of 1965.

However, section 328(a) of the Social Security Amendments of 1965 (P.L.

89-97) amended section 202(j)(2) to provide that the effective life of an

application may be extended prospectively to the time a "final decision"

is made on the application. Section 202(j)(2) now reads:

Section 328(d) of P.L. 89-97 provides, as here pertinent, that the

foregoing provisions "apply with respect to * * * (2) applications as to

which the Secretary has not made a final decision before the date of

enactment of this Act [P.L. 89-97, enacted July 30, 1965] * * *."

ay be extended prospectively to the time a "final decision"

is made on the application. Section 202(j)(2) now reads:

Section 328(d) of P.L. 89-97 provides, as here pertinent, that the

foregoing provisions "apply with respect to * * * (2) applications as to

which the Secretary has not made a final decision before the date of

enactment of this Act [P.L. 89-97, enacted July 30, 1965] * * *."

The issue is whether the provisions of section 202(j)(2) of the Act, as

amended in 1965, apply to the application for old-age insurance benefits

filed by R in January 1957. This depends on whether a "final decision" had

been made on R's 1957 application before July 30, 1965.

Social Security Administration Regulations No. 4, §§ 404.905-404.955 (20

CFR 404.905-404.955), provide for an administrative appeals process under

which a dissatisfied claimant may successively request reconsideration,

hearing, and Appeals Council review of the determination on his claim;

however, each review in the administrative appeals process must be

requested within specified time limits. The regulations also provide that

once a claimant has exhausted these administrative remedies with respect

to an initial determination, or the time within which to do so has

expired, the determination becomes final and binding on the parties to it.

Sections 404.956-404.967 of Regulations No. 4 (20 CFR 404.956-404.967)

describe the circumstances under which a determination that has become

"final" may be reopened.

e that

once a claimant has exhausted these administrative remedies with respect

to an initial determination, or the time within which to do so has

expired, the determination becomes final and binding on the parties to it.

Sections 404.956-404.967 of Regulations No. 4 (20 CFR 404.956-404.967)

describe the circumstances under which a determination that has become

"final" may be reopened.

Under the provisions of § 404.908 of Regulations No. 4, an initial

determination on an application is final and binding on the parties to

such determination, and thus becomes the "final decision" of the

Secretary, unless a request for reconsideration is filed with the Social

Security Administration within 6 months from the date of mailing notice of

the initial determination. Therefore, since R never requested a

reconsideration of the initial determination on his 1957 application, the

initial determination on that application made in March 1957 became the

"final decision" of the Secretary. However, the determination of March

1957 was reopened and revised 7 years later, in 1964, under the provisions

of § 404.957(c) of the regulations (20 CFR 404.957(c)). The question thus

presented is whether the March 1957 determination should be considered a

"final decision" for purposes of section 202(j)(2) of the Act, as amended,

when it was subsequently reopened and revised.

The amendment of section 202(j)(2) made by section 328 of P.L. 89-97 has

a clearly remedial purpose. That purpose is to provide relief to the

claimant who, although he did not meet the eligibility requirements for a

particular benefit at the moment he first filed application, did meet such

requirements prior to the time the Social Security Administration had

finally disposed of his claim. (See Senate Report 404, Part 1, 89th Cong.,

1st Sess., pp. 120-121)

s

a clearly remedial purpose. That purpose is to provide relief to the

claimant who, although he did not meet the eligibility requirements for a

particular benefit at the moment he first filed application, did meet such

requirements prior to the time the Social Security Administration had

finally disposed of his claim. (See Senate Report 404, Part 1, 89th Cong.,

1st Sess., pp. 120-121). To hold that the term "final decision," as used

in section 202(j)(2), means an initial determination on a claim with

respect to which a claimant has exhausted his administrative remedies

i.e., reconsideration, hearing, and Appeals Council review, or the time

within which to do so has expired, regardless of subsequent actions with

respect to that claim, would be to frustrate in part the purpose of the

amendment. Moreover, section 202(j)(2) is not part of a statute of

limitations as is, for example, section 205(c)(5)(A) of the Act in which

the term "final decision" also occurs. In contrast with the necessarily

restrictive purposes of the statute of limitations provisions of the Act,

the purpose of section 202(j)(2) as amended is not to restrict but to

liberalize and preserve a claimant's eligibility for benefits. It follows

that an initial determination on a claim is not considered a "final

decision" for purposes of section 202(j)(2), even though the claimant has

exhausted his administrative remedies with respect to such determination

or the time within which to do so has expired, if it is reopened under the

above-cited provisions of Regulations No. 4.

serve a claimant's eligibility for benefits. It follows

that an initial determination on a claim is not considered a "final

decision" for purposes of section 202(j)(2), even though the claimant has

exhausted his administrative remedies with respect to such determination

or the time within which to do so has expired, if it is reopened under the

above-cited provisions of Regulations No. 4.

As to the instant case, although a favorable determination of entitlement

was made by the Social Security Administration on R's 1957 application,

this did not conclude the Administration's actions with respect to that

claim. Rather, the determination of entitlement was later reopened, and

since it was found to be erroneous, was revised under the provisions of

Regulations No. 4, § 404.957(c). An additional consideration is that as of

the date of enactment of P.L. 89-97 (July 30, 1965), R was pursuing his

administrative remedies with respect to this action.

Under these circumstances, it is held that, for purposes of section

202(j)(2) of the Act, as amended, a "final decision" on R's 1957

application for old-age insurance benefits had not been made as of the

date of enactment of P.L. 89-97, that the provisions of section 202(j)(2),

as amended, are applicable to R's 1957 application, and that R's 1957

application is deemed to have been filed in February 1962, the first month

for which he satisfied all the requirements for an old-age insurance

benefit. Accordingly, R is entitled to old-age insurance benefits under

the provisions of section 202(a) of the Act, effective February 1962.