SSR 86-15c: SECTION 202 OF THE SOCIAL SECURITY ACT (42 U.S.C. 402) WITHDRAWAL OF AN APPLICATION FOR BENEFITS -- VALIDITY OF REQUIREMENT THAT WITHDRAWAL BE IN WRITING

20 CFR 404.640

SSR 86-15c

Bascetta v. Sec. of HHS, 1A Uempl. Ins. Rep. (CCH) ¶ 16,135 (U.S.D.C.,

E.D., N.Y. 1985)

SIFTON, District Judge:

This is an action brought under Section 205(g) of the Social Security Act

(the "Act"), 42 U.S.C. § 405(g), to review a final determination of the

Secretary of Health and Human Services (the "Secretary") which denied

plaintiff's request for reconsideration of the amount of benefits she was

awarded for fifteen months between January 1980 and April 1985 as the wife

of an insured wage earner. Both parties now move for judgment on the

pleadings pursuant to Rule 12(c) of the Federal Rules of Civil

Procedure.

In May 1975, plaintiff's husband, the wage earner, filed an application

for retirement benefits based on an entitlement date of August 1975, when

he reached the age of 65. However, because of excess earnings, he did not

begin receiving benefits until July 1977.

Plaintiff, the wage earner's wife, was born on April 16, 1916, and filed

an application for wife's insurance benefits on January 12, 1978,

requesting that her benefits start as of April 1, 1978, when she would

turn 62 years old. On January 27, 1978, 15 days after plaintiff filed her

application, the wage earner notified the Social Security District Office

that he was returning to work in February 1978 and anticipated continued

earnings in 1978 that would prevent payment benefits in 1978. As a result

the wage earner's benefits were suspended, and plaintiff was advised on

April 5, 1978, that she would not receive benefit payments as of April

1978, as she had requested. At the hearing before an administrative law

judge ("ALJ") on plaintiff's request for a redetermination of her benefit

amounts, plaintiff's husband testified that he requested that his wife's

benefits be cancelled along with his own in a January phone conversation

with a Miss Holiday of Social Security.

8, that she would not receive benefit payments as of April

1978, as she had requested. At the hearing before an administrative law

judge ("ALJ") on plaintiff's request for a redetermination of her benefit

amounts, plaintiff's husband testified that he requested that his wife's

benefits be cancelled along with his own in a January phone conversation

with a Miss Holiday of Social Security.

The wage earner continued to work until October 1979, when he again

stopped working and advised the agency that he would earn less than his

exempt amount of 1980. He requested that payments resume and that

plaintiff's payment begin as of January 1980. The Social Security

Administration complied with these requests, calculating plaintiff's

benefits based on her age as of the date of her original application,

January 12, 1978, when plaintiff was 62 years old, rather than her age

when she began to receive benefits in January 1980 of 63 years and 9

months. On June 4, 1981, plaintiff requested a reconsideration of her

benefit amount. Plaintiff alleged that she was entitled to 45% of her

husband's earnings rather than the 37.5% that she had been paid beginning

in January of 1980 at age 62.

On September 10, 1981, plaintiff's benefits award for the months in which

she had received payments prior to reaching age 65 was reaffirmed.

Plaintiff was advised that her benefits would, however, be recomputed

retroactive to April 1981, the month plaintiff turned 65, and adjusted to

take into account the number of months before age 65 in which she did not

receive benefits.

0 at age 62.

On September 10, 1981, plaintiff's benefits award for the months in which

she had received payments prior to reaching age 65 was reaffirmed.

Plaintiff was advised that her benefits would, however, be recomputed

retroactive to April 1981, the month plaintiff turned 65, and adjusted to

take into account the number of months before age 65 in which she did not

receive benefits.

Eventually in 1983 the issue was brought before an administrative law

judge ("ALJ"). The Administration contended that, if plaintiff wanted her

benefits based on the date payments actually started in January 1980, then

she should have withdrawn her original application in writing and

resubmitted it later. Section 404.640 of Regulation 4 of the Social

Security Administration, 20 C.F.R. § 404.640, requires that an application

can only be withdrawn in writing.

On April 29, 1983, the ALJ held that plaintiff's failure to submit a

written withdrawal should be considered a mere technicality that should

not be imposed to arrive at an inequitable result. The ALJ found that

plaintiff's monthly benefits from January 1980 to April 1981 (15 months)

should be recalculated on the basis of her age as of January 1980, i.e.,

63 years and 9 months, rather than her age of 62 years when the original

application was filed.

On May 20, 1983, the Director of Operations, Northeastern Programs

Service center wrote to the Officer of Hearings and Appeals stating that

her office disagreed with the decision of the ALJ. On June 28, 1983, the

Appeals Council notified plaintiff that it would review the decision of

the ALJ. On July 25, 1983, the Appeals Council determined that the

decision of the ALJ was wrong and wrote a letter to plaintiff informing

her of their decision. The plaintiff requested that she be allowed to

appear before the Council. The Appeals Council denied the request, stating

that the case did not involve a significant question of law or policy

that it would review the decision of

the ALJ. On July 25, 1983, the Appeals Council determined that the

decision of the ALJ was wrong and wrote a letter to plaintiff informing

her of their decision. The plaintiff requested that she be allowed to

appear before the Council. The Appeals Council denied the request, stating

that the case did not involve a significant question of law or policy. On

November 29, 1983, the formal decision of the Appeals Council was made,

and that decision is now the final decision of the Secretary.

Discussion

As is apparent from the foregoing, what is involved in this case are the

provisions of the Act that afford an option of obtaining retirement

benefits prior to the usual retirement age of 65 and provide for an

adjustment of benefit rate in accordance with the age at which the

benefits are claimed in order to ensure that similarly situated

beneficiaries will receive approximately equal total payouts whether they

claim their benefits at age 65 or before.

In this case, plaintiff claimed benefits are the earliest possible time

at which she became entitled to them (age 62). However, because of her

husband's excess earnings, she did not actually receive any payments

pursuant to this claim until well into her 63rd year. In calculating the

benefits paid to her subsequent to age 65, allowance has been made

pursuant to the applicable regulations for the fact that she did not

actually receive a large part of the benefits claimed by her prior to

reaching age 65, that is, while her benefit payments after age 65 are

lower than they would have been if she started receiving them at age 65,

the reduction in her benefits take into account only benefit payments

actually paid prior to age 65.

made

pursuant to the applicable regulations for the fact that she did not

actually receive a large part of the benefits claimed by her prior to

reaching age 65, that is, while her benefit payments after age 65 are

lower than they would have been if she started receiving them at age 65,

the reduction in her benefits take into account only benefit payments

actually paid prior to age 65.

However, with respect to payments received by plaintiff prior to age 65,

those payments have been calculated as if they had been actually paid out

each month from the date they were first requested, that is, at age 65,

even though those benefits were not actually received by plaintiff because

of excess earnings on the part of her husband. The Secretary's reason for

proceeding in this fashion is that the regulations provide that the rate

of benefits paid prior to age 65 is to be determined according to the age

of the beneficiary at the date the application for payment is initially

made. Only if the application is formally withdrawn in writing can

plaintiff avoid the use of the date in her initial application to

calculate the rate at which her benefits are calculated. The Secretary

concedes that adhering to this requirement will not achieve the purpose of

the statutory scheme of equalizing total benefits actually distributed.

She argues, however, that in the situation presented by this case the

requirement for written applications and written withdrawal of

applications to reflect the existence of potential claims against the

social security system is sufficiently important in terms of the orderly

administration of the system to require denial of plaintiff request for

adjustment. This Court agrees.

tributed.

She argues, however, that in the situation presented by this case the

requirement for written applications and written withdrawal of

applications to reflect the existence of potential claims against the

social security system is sufficiently important in terms of the orderly

administration of the system to require denial of plaintiff request for

adjustment. This Court agrees.

Although it is true that the Social Security Act and regulations

thereunder are to have a liberal application in accord with the remedial

and humanitarian aims of the Act, Eiseahaver v. Mathews, 536 F.2d

681 (2d Cir. 1981), a regulation valid on its face must be enforced by

courts if it is "reasonably related to the purpose of enabling

legislation." Hansen v. Harris , supra , 619 F.2d at 947,

quoting Mourning v. Family Publications Service , 411 U.S. 356, 369

(1973). In Hansen , the court was faced with a regulation analogous

to that presented here -- a requirement that social security applications

be in written form. 20 C.F.R. §404.601(c). The court held that the

regulation was valid on its facing, stating:

Id . at 947, quoting Goff v. Weinberger , No. H.74-276

[1975-1976 CCH UNEMPLOYMENT INSURANCE REPORTS, § 14,470] (D. Conn. 1975),

aff'd without opinion, 538 F.2d 309 (2d Cir), cert. denied , 429

U.S. 896 (1976).

In the present case, the regulation requiring written withdrawals as

applied to applications for benefits made prior to age 65 is reasonably

related to the purpose of the Act, and the purpose of the requirement is

to "reduce to a minimum the possibility of fraud, confusion and laxity of

administration." Hansen, supra , 619 F.2d at 947. A rational

distinction is made between optional benefit claims asserted prior to age

65 and the more customary claim made at age 65, since, in the former case,

the claim on the public fisc cannot be anticipated until the application

is filed and the option exercised

to "reduce to a minimum the possibility of fraud, confusion and laxity of

administration." Hansen, supra , 619 F.2d at 947. A rational

distinction is made between optional benefit claims asserted prior to age

65 and the more customary claim made at age 65, since, in the former case,

the claim on the public fisc cannot be anticipated until the application

is filed and the option exercised. Thereafter, such an application remains

a potential claim on the system until withdrawn in writing. In this case,

the ALJ disregarded the explicit statutory scheme, relying instead on

equitable notions of reasonableness and fairness to arrive at a result

different from that compelled by regulation. The Appeals Council reversed

the ALJ based on the language of the regulation. The Court is "not

empowered to disregard valid implementing regulations in particular cases

whenever their application appears to be somewhat unfair or particularly

onerous." Hansen, supra at 947; see also Leimbach v.

Califano , 596 F.2d 300, 304 (8th Cir. 1979).

* * * * * * *

This Court cannot rely solely on plaintiff's claim that she, through her

husband, orally withdrew her application in a phone call to one Miss

Holiday. As stated by Judge Friendly, dissenting in Hansen , such

action "opens the door of the federal fisc not simply to [plaintiff] but

to thousands who merely will make a detailed claim that they have done so

and whom there is no effective means of rebutting. Millions of dollars

will be spent simply to ascertain whether conditions of eligibility

claimed in a subsequent written application existed at the time of the

alleged oral one." Id . at 949. The same logic applies here. Great

cost and delay can be caused by looking beyond the clear language of the

regulation requiring a writing. The written withdrawal requirement was

designed to foreclose such inefficient inquiry.

For the foregoing reasons, the Court finds that the Secretary's decision

was legally correct.

So ordered.