SSR 86-9c: SECTIONS 206 AND 1127 OF THE SOCIAL SECURITY ACT (42 U.S.C. 406 AND 1320a-6) ATTORNEY FEES -- DETERMINING PAST-DUE BENEFITS -- APPLICABILITY OF THE SUPPLEMENTAL SECURITY INCOME OFFSET PROVISION

20 CFR 404.408b, 404.1703, 404.1720(b)(4), and 404.1730

SSR 86-9c

Burnett v. Heckler, 756 F.2d 621 (8th Cir. 1985)

McMILLAN, Circuit Judge:

The Secretary of the Department of Health and Human Services (the

Secretary) appeals from a final judgment entered in the District Court for

the Western District of Arkansas awarding attorney's fees, pursuant to 42

U.S.C. § 406(b)(1) (1982), plus interest, to the attorney who represented

a Social Security claimant who was awarded Title II disability and

Supplemental Security income (SSI) benefits retroactively. Burnett v. Heckler , 563 F. Supp. 789 (W.D., Ark. 1983). For reversal the

Secretary argues that the district court erred in computing the amount of

the attorney's fee and in awarding interest. For the reasons discussed

below, we reverse the judgment of the district court.

The underlying facts are not in dispute. For a more detailed statement of

the administrative and judicial history, see 563 F. Supp. at 790-91. This

case involves neither the claimant's entitlement to disability benefits

nor SSI benefits nor the amount of those benefits. Nor does it involve the

application of the so-called SSI windfall offset, 42 U.S.C. § 1320a-6

(1982), [1] amended by §

2615(a) of the Deficit Reduction Act of 1984, 98 Stat. 1132 (to be

codified at 42 U.S.C.A. § 1320a-6 (West Supp.

1984)), [2] to reduce the claimant's past-due disability benefits. This case involves only

the computation of attorney's fees.

the amount of those benefits. Nor does it involve the

application of the so-called SSI windfall offset, 42 U.S.C. § 1320a-6

(1982), [1] amended by §

2615(a) of the Deficit Reduction Act of 1984, 98 Stat. 1132 (to be

codified at 42 U.S.C.A. § 1320a-6 (West Supp.

1984)), [2] to reduce the claimant's past-due disability benefits. This case involves only

the computation of attorney's fees.

Claimant Martha Burnett filed a claim for disability insurance benefits

under Title II of the Social Security Act (the Act), 42 U.S.C. § 401 et

seq., on January 18, 1979. On December 17, 1980, she filed a claim for

SSI benefits based on disability under Title XVI of the Act, id §

1381 et seq. [3] The

Secretary determined that Burnett was not disabled and denied these

claims. In two separate appeals the district court remanded the case to

the Secretary for further proceedings. On August 9, 1982, following

additional vocational expert testimony, the Secretary determined that

Burnett was in fact disabled and entitled to disability benefits beginning

in September 1978 and to SSI benefits from December 1980 through March

1982.

The Secretary determined that Burnett was entitled to gross retroactive

disability benefits in the amount of $8,079.10. Pursuant to the SSI

windfall offset, id. § 1320a-6, the Secretary then reduced the

$8,079.10 by $2,426.29, the amount of retroactive SSI benefits Burnett

would not have received if she had received the disability benefits when

they were due instead of retroactively. Thus, after application of the SSI

windfall offset, Burnett was entitled to $5,652.81 in retroactive

disability benefits. Pursuant to the attorney's fee award provision, id . § 406, the Secretary withheld 25% of this reduced amount to

cover an award of attorney's fees and paid the balance of $4,239.60 to

Burnett.

ceived the disability benefits when

they were due instead of retroactively. Thus, after application of the SSI

windfall offset, Burnett was entitled to $5,652.81 in retroactive

disability benefits. Pursuant to the attorney's fee award provision, id . § 406, the Secretary withheld 25% of this reduced amount to

cover an award of attorney's fees and paid the balance of $4,239.60 to

Burnett.

A court may award attorney's fees pursuant to 42 U.S.C. § 406(b)(1) where

the claimant receives a favorable administrative decision following a

remand of the case to the Secretary for further consideration. See, e.g., Fenix v. Finch 436 F.2d 831, 834-35 (8th Cir. 1971), citing Ray v. Gardner , 387 F.2d 162, 165 (4th Cir. 1967). In

his motion for an award of attorney's fees before the district court, the

attorney argued that, pursuant to § 406(b)(1), he was entitled to a

reasonable attorney's fee of up to 25% of "the total of the past-due

benefits" and that the attorney's fee should be computed as a percentage

of the gross retroactive disability benefits due the claimant, unreduced

by the application of the SSI windfall offset. The district court agreed

and held that

563 F. Supp. at 793. Relying upon the statutory language in § 1320a-6, the

district court determined that Congress intended the SSI windfall offset

to apply only when SSI benefits had actually been received during the

period for which retroactive disability benefits were due: "'Section

[1320a-6] speaks of cases in which a claimant for Title II benefits is subsequently determined to be entitled to those benefits and

" was " an individual to whom [SSI] benefits " were paid " for

one or more months " during " the retroactive period.'" Id. at

792 (citation omitted), emphasis is original), citing unidentified

administrative decision reported in 5 Soc. Security F. 1, 8-9 (1983).

320a-6] speaks of cases in which a claimant for Title II benefits is subsequently determined to be entitled to those benefits and

" was " an individual to whom [SSI] benefits " were paid " for

one or more months " during " the retroactive period.'" Id. at

792 (citation omitted), emphasis is original), citing unidentified

administrative decision reported in 5 Soc. Security F. 1, 8-9 (1983).

The district court also noted that because application of the SSI

windfall offset reduced the amount of "past-due" disability benefits from

which the Secretary withholds 25% for direct payment of attorney's fees or

from which the court may award up to 25% for attorney's fees, SSI windfall

offset operated as a disincentive to lawyers to represent disability

claimants, a result which was contrary to Congressional intent. 563 F.

Supp. at 792-93; see Dawson v. Finch, 425 F.2d 1192, 1195

(5th Cir.), cert. denied , 400 U.S. 830, 91 S. Ct. 60, 27 L. Ed. 2d

60 (1970). This appeal followed.

As a preliminary matter, we note that the Secretary is entitled to

participate in attorney's fee matters to protect the claimant's interest. See e.g., MacDonald v. Weinberger , 512 F.2d 144, 146-47 (9th

Cir. 1975). "In view of the humanitarian policy of the Social Security

program to benefit the disabled, . . . the Secretary 'retains an interest

in the fair distribution of monies withheld for attorney's fees.'" Lewis v. Secretary of HHS , 707 F.2d 246, 248 (6th Cir.

1983), citing Moore v. Califano , 471 F. Supp. 146, 149

(S.D.W.Va. 1979), appeal dismissed mem., 622 F.2d 585 (4th Cir. 1980).

The Secretary argues that the district court's computation of the amount

of past-due benefits is inconsistent with § 406(b)(1) and the regulations

defining the term "past-due benefits," improperly requires payment by the

Secretary of an attorney's fee award "in addition to" the amount of

past-due benefits, and erroneously applies the SSI windfall offset.

em., 622 F.2d 585 (4th Cir. 1980).

The Secretary argues that the district court's computation of the amount

of past-due benefits is inconsistent with § 406(b)(1) and the regulations

defining the term "past-due benefits," improperly requires payment by the

Secretary of an attorney's fee award "in addition to" the amount of

past-due benefits, and erroneously applies the SSI windfall offset.

The Secretary first argues that the district court's award is

inconsistent with § 406(b)(1) and the regulations defining the term

"past-due benefits." Title 42 U.S.C. § 406(b)(1) (emphasis added)

provides:

The Secretary has defined "past-due benefits" by regulation as " the

total amount of benefits payable under Title II of the Act to all

beneficiaries that has accumulated because of a favorable administrative

or judicial determination or decision, up to but not including the month

the determination or decision is made." 20 C.F.R. § 404.1703 (1984)

(emphasis added). Thus, the Secretary argues that any adjustments required

by the Act which affect the amount of benefits the claimant is entitled to

receive, including the reduction required by the SSI windfall offset, must

be made in order to determine the "total amount of benefits payable" to a

disability claimant. For this reason, the Secretary argues that "past-due

benefits" in § 406.(b)(1) refers to the "net" amount of disability

benefits payable to the claimant.

Where Congress has entrusted the Secretary with the responsibility for

implementing a statutory provision by regulation, the Secretary has the

primary responsibility for interpreting statutory terms. See, e.g., Batterton v. Francis , 432 U.S. 416, 425-26, 97 S.Ct. 2399,

2405-06, 53 L. Ed.2d 448 (1977). "[O]ur review is limited to determining

whether the regulations promulgated exceeded the Secretary's statutory

authority and whether they are arbitrary and capricious." Heckler v. Campbell , 461 U.S. 458, 466, 103 S.Ct. 1952, 1957, 76 L.Ed.2d 66

sibility for interpreting statutory terms. See, e.g., Batterton v. Francis , 432 U.S. 416, 425-26, 97 S.Ct. 2399,

2405-06, 53 L. Ed.2d 448 (1977). "[O]ur review is limited to determining

whether the regulations promulgated exceeded the Secretary's statutory

authority and whether they are arbitrary and capricious." Heckler v. Campbell , 461 U.S. 458, 466, 103 S.Ct. 1952, 1957, 76 L.Ed.2d 66

(1983). Judicial deference to administrative interpretation is

particularly appropriate in cases involving disputed terms in the Social

Security Act. See, e.g., Burkhalter v. Schweiker , 711 F.2d

841, 844 (8th Cir. 1983). Here, Congress has authorized the Secretary to

pay authorized attorney's fees out of past-due benefits directly to

attorneys who represent disability claimants and has entrusted

implementation of the provision by rule or regulation to the Secretary. 42

U.S.C. § 406(a) (administrative award), (b) (judicial award). We cannot

conclude that the Secretary's interpretation of "past-due benefits" as the

total amount of benefits payable to the claimant, that is, the "net"

amount of disability benefits, is arbitrary and capricious or exceeds the

Secretary's statutory authority.

First, computation of attorney's fees on the basis of the net amount of

benefits is consistent with the Congressional goal of insuring that

disability benefits are not consumed by attorney's fees. Cf. Dawson v. Finch , 425 F.2d at 1195 (§ 406(b) intended to insure that

disability benefits would not be diminished by deduction of attorney's fee

of one-third or one-half of benefits received). Under the Act, the

claimant is not entitled to payment of the "gross" amount of retroactive

disability benefits. The Secretary when required by the Act must reduce

the "gross" amount. The reduction can dramatically affect the amount of

benefits payable to the claimant. For example, 42 U.S.C

d not be diminished by deduction of attorney's fee

of one-third or one-half of benefits received). Under the Act, the

claimant is not entitled to payment of the "gross" amount of retroactive

disability benefits. The Secretary when required by the Act must reduce

the "gross" amount. The reduction can dramatically affect the amount of

benefits payable to the claimant. For example, 42 U.S.C. § 424a requires

the Secretary to reduce a claimant's disability benefits if the claimant

receives worker's compensation. See also 20 C.F.R. § 404.408 (1984). In Cloyd v. Weinberger , 527 F.2d 1167 (6th Cir. 1976) (order),

the claimant's gross amount of benefits was $2,703.20, but, after

reduction for worker's compensation, the net amount was $746.20. The

district court's award of an attorney's fee of $1,028.60 was greater than

the claimant's past-due benefits. The court in the Cloyd case

reversed the district court award and held that the maximum attorney's fee

allowable under § 406(b)91) was $186.55 or 25% of the reduced or net

amount of benefits. Id. at 1168. Thus, as noted in Davis v. Secretary of HEW , 320 F. Supp. 1293, 1296 (N.D.Miss 1970) (worker's

compensation), recovery of attorney's fees based on the gross award would

"in many cases [cause] a substantial portion of the actual recovery [to]

be consumed in counsel fees and the actual 'benefit' to [the] claimant

reduced to a merely minimal sum.

ced or net

amount of benefits. Id. at 1168. Thus, as noted in Davis v. Secretary of HEW , 320 F. Supp. 1293, 1296 (N.D.Miss 1970) (worker's

compensation), recovery of attorney's fees based on the gross award would

"in many cases [cause] a substantial portion of the actual recovery [to]

be consumed in counsel fees and the actual 'benefit' to [the] claimant

reduced to a merely minimal sum.

Here, the reduction required by the Act is the SSI windfall offset. 42

U.S.C. § 1320a-6; 20 C.F.R. § 404.408b (1984). We believe the Secretary's

decision to handle the reduction required by the SSI windfall offset in

the same way as the worker's compensation reduction is reasonable. We

recognize that computation of attorney's fees on the basis of the net

amount of disability benefits will necessarily "reduce the amount of

withheld Title II benefits available for the payment of attorney's fees"

and to that extent is a financial disincentive to attorneys to represent

disability applicants. 563 F. Supp. at 792. The Secretary's approach,

however, does produce a public benefit because it preserves a greater

portion of the benefits for the claimant. After reduction by the SSI

windfall offset, Burnett was entitled to benefits of $5,652.81. As

discussed below, § 406(b)91) limits direct payment of the attorney's fee

"out of, and not in addition to, the amount of such past-due benefits". An

attorney's fee award of $2,019.75 (or 25% of $8,079.10) would leave

Burnett with the balance of $3,633.06. By comparison, under the

Secretary's approach, an attorney's fee award of $1,413.20 (or 25% of

$5,652,81) would leave Burnett with $4,239.60, or about $606 more in

benefits.

ct payment of the attorney's fee

"out of, and not in addition to, the amount of such past-due benefits". An

attorney's fee award of $2,019.75 (or 25% of $8,079.10) would leave

Burnett with the balance of $3,633.06. By comparison, under the

Secretary's approach, an attorney's fee award of $1,413.20 (or 25% of

$5,652,81) would leave Burnett with $4,239.60, or about $606 more in

benefits.

Moreover, the statutory language and legislative history suggest that

Congress sought to "encourage effective legal representation of claimants

by insuring lawyers that they will receive reasonable fees directly

through certification by the Secretary. Dawson v. Finch , 425

F.2d at 1196;p see also Hearings on H.R. 6675 Before the Senate Committee

on Finance, 89th Cong., 1st Sess. 512-13 (1965) (attorney complaints that

claimants sometimes receive awards without the attorney's knowledge and do

not notify the attorney and do not pay the attorney's fee). Section 406(a)

and (b) reflect a compromise -- the Secretary must withhold and pay a

reasonable attorney's fee directly to the attorney out of the claimant's

past-due benefits, thus guaranteeing payment to the attorney and avoiding

collection problems, but the amount of the attorney's fee that must be

withheld and directly paid to the attorney is limited to a maximum of 25%

of the past-due benefits. Thus, it is primarily the direct payment feature

which provides the attorney with the financial incentive to represent

disability claimants and compensates in part for limitation of fees to a

maximum of 25% of the past-due benefits in court awards. Under the

Secretary's approach, only the amount subject to withholding and direct

payment is affected, not the direct payment feature.

efits. Thus, it is primarily the direct payment feature

which provides the attorney with the financial incentive to represent

disability claimants and compensates in part for limitation of fees to a

maximum of 25% of the past-due benefits in court awards. Under the

Secretary's approach, only the amount subject to withholding and direct

payment is affected, not the direct payment feature.

The question whether the amount of past-due benefits subject to

withholding must be reduced by the SSI windfall offset was specifically

addressed in the preamble to the final regulations implementing the SSI

windfall offset provision. Reduction of Retroactive Social Security

Benefits, 47 Fed. Reg. 4985, 4986 (1982) (hereinafter Preamble) (codified

at 20 C.F.R. §§ 404.408b, 416.1123). The question about withholding is

identical to the issue in the present case: whether the amount of past-due

benefits out of which the court may award attorney's fees must be reduced

by the SSI windfall offset. The questions are identical because although

the Secretary may authorize an attorney's fee in excess of 25% of

the past-due benefits for services rendered in connection with

administrative proceedings, the most the Secretary may withhold and

certify for direct payment to the attorney is 25% of the past-due

benefits. See 42 U. S.C. § 406(a) (Secretary to prescribe maximum fees

which may be charged for services performed in connection with any claim

before the Secretary and shall certify for payment maximum of 25% of

past-due benefits); 20 C.F.R. § 404.1725(b)92) (administrative

authorization of attorney's fee does not depend on amount of benefit

alone; Secretary may authorize a fee even if no benefits are payable),

.1730(b)(1) (maximum direct payment of 25% of past-due benefits); see

generally 3 National Organization of Social Security Claimant's

Representatives, Social Security Practice Guide § 27.01, at 27-2 (1984)

(distinguishing authorization from withholding and payment)

f attorney's fee does not depend on amount of benefit

alone; Secretary may authorize a fee even if no benefits are payable),

.1730(b)(1) (maximum direct payment of 25% of past-due benefits); see

generally 3 National Organization of Social Security Claimant's

Representatives, Social Security Practice Guide § 27.01, at 27-2 (1984)

(distinguishing authorization from withholding and payment). But see Morris v. Social Security Administration , 689 F.2d 495, 497

(4th Cir. 1982) (holding that § 406(a) limits the amount of attorney's

fees which may be awarded by the Secretary for administrative

representation to 25% of past-due benefits). Similarly, the maximum

attorney's fee that a court can award (and which the Secretary can

withhold and certify for direct payment) is 25% of the past-due benefits.

See 42 U.S.C. § 406(b)(1); 20 C.F.R. § 404.1728(b) (authorization), .1730

(a)(payment).

Several commenters had assumed that the Secretary would withhold the

amount of an attorney's fee from retroactive disability benefits before the reduction required by the SSI windfall offset. The

Secretary's response clearly rejected that position:

Preamble, 47 Fed. Reg. at 4986 (emphasis in original). Thus, the amount

of retroactive benefits payable for purposes of a court award of

attorney's fees pursuant to § 404(b)(1) is the amount of retroactive

disability benefits reduced by the SSI windfall offset or the net amount

of disability benefits.

d by the SSI windfall offset. The

Secretary's response clearly rejected that position:

Preamble, 47 Fed. Reg. at 4986 (emphasis in original). Thus, the amount

of retroactive benefits payable for purposes of a court award of

attorney's fees pursuant to § 404(b)(1) is the amount of retroactive

disability benefits reduced by the SSI windfall offset or the net amount

of disability benefits.

The Secretary also argues that the district court's award violates the

provision in § 406(b)(1) which authorize the Secretary to "certify the

amount of such fee for payment to such attorney out of, and not in

addition to, the amount of such past-due benefits" in the present case is

$5,652.81. The Secretary withheld 25% of this amount or $1,413.20 for

payment of attorney's fees and paid the balance to the claimant. The

district court's attorney's fee award of $2,019.75 exceeds the amount

withheld by $606.55. The district court could not require the Secretary to

pay the attorney $2,019.75 as an attorney's fee award made pursuant to §

406(b)(1) because $606.55 of that award represented an amount "in addition

to" the amount of past-due benefits. Cf. Ocasio v.

S chweiker , 540 F. Supp. 1320 (S.D.N.Y. 1982) (availability of

attorney's fees against the federal government under Equal Access to

Justice Act not limited by § 406(b)).

The Secretary also argues that the district court erroneously applied the

SSI windfall offset. The Secretary specifically argues that the district

court erred in holding that in cases involving concurrent applications for

retroactive disability benefits and SSI benefits, the Secretary must

compute and pay the disability benefits before computation and

payment of the SSI benefits. Because the present case involves only

computation of attorney's fees and does not involve application of the SSI

windfall offset to reduce the amount of the claimant's retroactive

disability benefits, we do not reach this issue

retroactive disability benefits and SSI benefits, the Secretary must

compute and pay the disability benefits before computation and

payment of the SSI benefits. Because the present case involves only

computation of attorney's fees and does not involve application of the SSI

windfall offset to reduce the amount of the claimant's retroactive

disability benefits, we do not reach this issue. However, some analysis of

the SSI windfall offset was necessary to resolve the attorney's fee issue

and we believe that the Secretary's argument is correct. See Gallo v. Heckler , 600 F. supp. 1513, 1518-1519 (E.D.N.Y. 1985). The

analysis is set forth in the

margin. [4]

The Secretary also argues that the district court erred in awarding

interest on the award of attorney's fees. We agree. Section 406(b) does

not contain any provision for an award of interest. The Secretary's role

under § 406(b) is limited to withholding a maximum of 24% of the past-due

benefits and certifying the court's attorney's fee award for direct

payment to the attorney. The Secretary is only a stakeholder in such

proceedings. In any event, to the extent the district court's award could

be characterized as one against the Secretary for payment of attorney's

fees, there is no provision in § 406(b) for an award of interest.

"(I)nterest on claims against the United States cannot be recovered in the

absence of an express provision to the contrary in the relevant statute. .

. ." United States v. Alcea Band of Tillamooks , 341 U.S. 48,

71 S.Ct. 552, 95 L. Ed. 738 (1951) (per curiam).

Accordingly, the judgment of the district court awarding attorney's fees

in the amount of $2,019.75, plus interest, is reversed. Because it is

clear that the district court intended to award the maximum allowable

amount, we direct the district court to enter an award of $1,413.20 as the

attorney's fees in the present case.

[1] 42 U.S.C. § 1320a-6 1982)

provided:

38 (1951) (per curiam).

Accordingly, the judgment of the district court awarding attorney's fees

in the amount of $2,019.75, plus interest, is reversed. Because it is

clear that the district court intended to award the maximum allowable

amount, we direct the district court to enter an award of $1,413.20 as the

attorney's fees in the present case.

[1] 42 U.S.C. § 1320a-6 1982)

provided:

Notwithstanding any other provision of this chapter, in any case where an

individual --

(1) makes application for benefits under subchapter II of this chapter

and is subsequently determined to be entitled to those benefits, and

(2) was an individual with respect to whom supplemental security income

benefits were paid under subchapter XVI of this chapter (including State

supplementary payments which were made under an agreement under section

1382e(a) of this title or an administrative agreement under section 212 of

Public Law 93-66) for one or more months during the period beginning with

the first month for which a benefit described in paragraph (1) is payable

and ending with the first month for which a benefit described in paragraph

(1) is payable and ending with the month before the first month in which

such benefit is paid pursuant to the application referred to in paragraph

(1), the benefits (described in paragraph (1)) which are otherwise

retroactively payable to such individual for months in the period

described in paragraph (2) shall be reduced by an amount equal to so much

of such supplemental security income benefits (including State

supplementary payments) described in paragraph (2) for such month or

months as would not have been paid with respect to such individual or his

eligible spouse if the individual had received the benefits under

subchapter II of this Chapter at the times they were regularly due during

such period rather than retroactively; and from the amount of such

reduction the Secretary shall reimburse the state on behalf of which

supplementary payments

such month or

months as would not have been paid with respect to such individual or his

eligible spouse if the individual had received the benefits under

subchapter II of this Chapter at the times they were regularly due during

such period rather than retroactively; and from the amount of such

reduction the Secretary shall reimburse the state on behalf of which

supplementary payments were made for the amount (if any) by which such

State's expenditures on account of such supplementary payments for the

period involved exceeded the expenditures which the State would have made

(for such period) if the individual had received the benefits under

subchapter II of this chapter at the times they were regularly due during

such period rather than retroactively. An amount equal to the portion of

such reduction remaining after reimbursement of the State under the

preceding sentence shall be covered into the general fund of the

Treasury.

[2] Section 2615(a) of the

Deficit Reduction Act of 1984, 98 Stat. 1132 (to be codified at 42

U.S.C.A. § 1320a-6 (West Supp. 1984)), provides:

[3] Eligibility for SSI benefits

is determined on the basis of need and either age, blindness or disability

and provides a minimum level of benefits. See Schweiker v. Hogan , 457 U.S. 569, 102 S. Ct.2 597, 2606, 73 L. Ed.2d 227 (1982)

(brief discussion of historical development of SSI program).

[4] As noted by the district

court, the SSI windfall offset provision requires the Secretary to reduce

a claimant's retroactive disability benefits if the claimant received SSI

payments for at least one month of the retroactive period; the amount of

the reduction of disability benefits in the amount of SSI payments that

would not have been paid if the claimant had received the disability

benefits when they were due instead of retroactively. Burnett v.

Heckler , 563 F. Supp. 789, 792 (W.D. Ark. 1983); 42 U.S.C. § 1320a-6

y benefits if the claimant received SSI

payments for at least one month of the retroactive period; the amount of

the reduction of disability benefits in the amount of SSI payments that

would not have been paid if the claimant had received the disability

benefits when they were due instead of retroactively. Burnett v.

Heckler , 563 F. Supp. 789, 792 (W.D. Ark. 1983); 42 U.S.C. § 1320a-6

(1982), amended by § 2615(a) of the Deficit Reduction Act of 1984,

987 Stat. 1132 (to be codified at 42 U.S.C.A. § 1320a-6) (West Supp.

1984); see H. R. Conference Rep. NO. 861, 98th Cong., 2nd sess. 1391, reprinted in 1984-6B U.S. Code Cong. & Ad. News 751, 1385; H.

R. Conference Rep. No. 944, 96th Cong. 2d Sess. 69, reprinted in 1980 U.S. Code Cong. & Ad. News 1277, 1416; s Rep. No. 408, 96th

cong., 2d Sess. 78, reprinted in 1980 U.S. Code Cong., & ad.

News 1277, 1356; see generally 3 National Organization of Social

Security Claimant's Representatives, Social Security Practice Guide §

25.33 (1984). Because eligibility for SSI depends upon financial need in

addition to age, blindness, or disability, the amount of monthly SSI

payments is inversely proportional tot he Claimant's income and resources

for that particular month. 42 U.S.C. § 1382(c)(1) (1982); 20 C.F.R. §

416.200 (SSI eligibility determined on quarterly basis), .1123(a) (1984).

Unearned income like disability benefits is considered "income" for SSI

purposes, 20 C.F.R. § 416.1121(a), but cannot be counted until actually

received, id § 416.1123(a). Thus, an SSI applicant who already

receives disability benefits receives a smaller SSI payment than an SSI

applicant who does not receive disability benefits

eligibility determined on quarterly basis), .1123(a) (1984).

Unearned income like disability benefits is considered "income" for SSI

purposes, 20 C.F.R. § 416.1121(a), but cannot be counted until actually

received, id § 416.1123(a). Thus, an SSI applicant who already

receives disability benefits receives a smaller SSI payment than an SSI

applicant who does not receive disability benefits. However, before the

passage of the SSI windfall offset provision, an SSI applicant who applied

for retroactive disability benefits or an individual who applied at

roughly the same time or concurrently for both disability and SSI benefits

could have received full SSI payments and disability benefits because the

Secretary could not reduce the amount of SSI payments to reflect the

payment of disability benefits until the claimant actually received the

disability benefits. In addition, even if the retroactive disability

benefits were paid before SSI, the disability benefits would only be

counted as income for SSI purposes during the month they were received and

not for any other months in the retroactive period. Id. § 416.1123.

Thus, an individual could have received SSI benefits that would not have

been paid if the individual had received the disability benefits that

would not have been paid if the individual had received the disability

benefits during the months they were due rather than retroactively.