Opinion
Civil No. 00-5190.
February 11, 2002
Mr. James P. Wynne, c/o Ms. Rose C. Wynne (Mother), NJ, Plaintiff pro se.
Christopher J. Christie, United States Attorney, By: Anthony J. LaBruna, Assistant United States Attorney, United States Attorney's Office, Newark, New Jersey, Attorney for Defendant.
OPINION
This matter comes before the Court pursuant to Section 205(g) of the Social Security Act ("Act"), as amended, 42 U.S.C. § 405(g), upon the complaint filed by plaintiff James P. Wynne ("Jimmy"), to review the final decision of the Commissioner of the Social Security Administration denying plaintiff's claims for Supplemental Security Income ("SSI") under Title XVI of the Act. The only issue to be decided is whether the decision of Administrative Law Judge Daniel N. Shellhamer, that Jimmy is ineligible to receive SSI benefits because other excess income deemed as Jimmy's from his mother's federal pension, is supported by substantial evidence. It is undisputed that Jimmy is severely disabled and that is not an issue before this Court. For the reasons stated below, this Court finds that there is substantial evidence in the record supporting the Administrative Law Judge's determination that Jimmy is ineligible for SSI benefits at this time. As a result, the decision denying James P. Wynne SSI benefits will be affirmed.
Plaintiff, who is fourteen and completely disabled, is called Jimmy by his mother and representative, Rose C. Wynne ("Rose"). The Court will refer to plaintiff alternatively as Jimmy and/or plaintiff. Ms. Wynne was asked by Judge Shellhamer at the ALJ hearing and by the undersigned whether she understood that she and her son had a right to legal representation in these proceedings. Ms. Wynne advised that she understood that right and desired to proceed as Jimmy's pro se representative.
I. Background
Plaintiff was born on February 20, 1987 and has been severely disabled ever since. (Tr. 14.) Plaintiff receives $390.00 per month in court-ordered child support from his father. (Id.) Plaintiff's mother, Rose, receives court-ordered alimony and a federal civil service disability pension in the amount of $949.00 per month. (Tr. at 16.)
Jimmy was born with hydrocephalous, spastic quadriplegia, a seizure disorder, and cerebral palsy. Jimmy is wheelchair-bound, deaf, and has virtually no ability to speak. This information, garnished from several medical opinion letters submitted by Ms. Wynne which were not part of the administrative record, is included solely for completeness.
Rose receives alimony in the amount of $320.00 and $400.00 every third month. (Tr. 16-17.)
On February 25, 1998, plaintiff received a letter from the Social Security Administration ("SSA") advising him that a preliminary review indicated that he would not be eligible for SSI benefits because his monthly income was too high. (Tr. at 18.) On March 11, 1998, Rose, on behalf of Jimmy, filed a formal application for SSI benefits. (Tr. at 14-15.) The application was denied. (Tr. 18-21) On March 31, 1998, plaintiff's mother requested reconsideration, asserting that she disagreed with the SSA's classification of her disability pension as unearned income. Rose asserted that the pension should be treated as earned income, the way it is reported on her tax returns, so that Jimmy could receive SSI benefits. (Tr. 22.) On April 24, 1998, the reconsideration was denied. (Tr. 29-30). The SSA explained to plaintiff and his mother how income was classified under the Act and the Commissioner's regulations.
After Jimmy's reconsideration was denied, Rose requested a hearing before an administrative law judge. (Tr. 29-30.) On February 16, 1999, a hearing was held before ALJ Daniel N. Shellhamer. On April 13, 1999, after reviewing the Commissioner's calculations, the applicable SSA regulations, and plaintiff's income, Judge Shellhamer determined that James was ineligible for SSI benefits because of excess income deemed from his mother. (Tr. at 6-12.) On August 15, 2000, the Appeals Council denied plaintiff's request for review. (Tr. a 2-3.)
On October 19, 2000, plaintiff filed the instant appeal, seeking to have the ALJ's decision vacated. Plaintiff's mother raises the identical argument heard by the Commissioner, the ALJ, and the Appeals Council, specifically that it is unfair that her pension is classified as unearned income by the SSA and that, as a result, that income is deemed to Jimmy, preventing him from receiving SSI benefits. Rose asserts that the SSA should treat her pension as earned income because that is how the IRS classifies it.
II. Discussion
This social security appeal differs from most presented to this Court because neither the nature nor the extent of plaintiff's medical disability is at issue. The sole issue decided by the ALJ and the sole issue to be reviewed by this Court is whether Jimmy, under the Social Security Regulations, is ineligible to receive SSI benefits because of the excess income deemed to him from his mother's federal disability pension. This Court's review, therefore, is limited to the ALJ's application of the Social Security Regulations to the facts of this case.
The determination of the Commissioner will not be set aside if it is supported by substantial evidence, even if this Court would have decided the matter differently. Hartanft v. Apfel, 181 F.3d 358, 360 (3d Cir. 1999). Substantial evidence is evidence that is less than a preponderance, but more than a mere scintilla. Richardson v. Perales, 402 U.S. 389, 401 (1971). When reviewing a determination of law made by the Commissioner, a district court is entitled to ensure that the ALJ arrived at his decision by application of the proper legal standards. Fargnoli v. Massanari, 247 F.3d 34, 42 (3d Cir. 2001). If the ALJ fails to consider all relevant regulations in making a determination of eligibility for SSI benefits, the case must be remanded. Id. at 40.
Because there are no facts in dispute, and because no factual determinations are on appeal, the standard for review of factual determinations will not be recited herein. Indeed, it does not even appear that the law applied is in dispute. Plaintiff challenges the fact that two federal agencies, namely the SSA and the Internal Revenue Service ("IRS") require that the identical income (i.e., Rose Wynne's federal disability pension) be classified in two separate ways. (See discussion regarding divergent classifications, supra.) Although the Court sympathizes with the plaintiff, and understands the frustration that he and his mother feel, this Court, similar to the ALJ, is not able to change the federal regulations that govern social security issues. The undersigned, like Judge Shellhamer, must apply the governing law as written, even when it results in seemingly unfair conclusions. Judge Shellhamer encouraged Mrs. Wynne to contact her Congressman, and this Court recommends the same, for that is the only way that federal regulations may be changed.
Congress enacted Title XVI of the Act to provide a subsistence allowance to aged and disabled individuals without other coverage under the SSA or another pension. See Woods v. Shalala, 884 F. Supp. 156, 160 (D.N.J. 1995). The SSI is "a program of last resort, designed to provide only a `subsistence allowance.'"Woods, 884 F. Supp. at 160 (quoting Lyon v. Bowen, 802 F.2d 794, 796 (5th Cir. 1986)). The SSI program is often referred to as a federal welfare program for disabled persons with no other income or a meager income that is below the cap set for SSI. See Woods, 884 F. Supp. at 160; 20 C.F.R. § 416.110.
The Act provides that in order for a non-married individual to be eligible for SSI benefits, his annual income cannot exceed $1,752.00, or, the amount determined under 42 U.S.C. § 1382f, if greater, for calender years after 1974. See 42 U.S.C. § 1382(a)(1)(A). Income is defined by the Social Security regulations as "anything you receive in cash or in kind that you use to meet your needs for food, clothing, and shelter." 20 C.F.R. § 416.1102. Earned income, as classified by the SSA, includes:
(A) wages as determined under section 403(f)(5)(C) of this title but without application of section 410(j)(3) of this title;
(B) net earnings from self-employment, . . .;
(C) remuneration received for services performed in a sheltered workshop or work activities center; and
(D) any royalty earned by an individual in connection with any publication of the work of the individual, and that portion of any honorarium which is received for services rendered. . . .42 U.S.C § 1382a(1). Unearned income, as classified by the SSA, is all other income, such as alimony and child support and "any payments received as an annuity, pension, retirement, or disability benefit, including veterans' compensation and pensions, workmen's compensation payments, old-age, survivors, and disability insurance benefits, railroad retirement annuities and pensions, and unemployment insurance benefits." 42 U.S.C. § 1382a(a)(2)(B)-(E); 20 C.F.R. § 416.1121(a)-(b). Both earned and unearned income are counted in determining SSI eligibility. 42 U.S.C. § 1382(a); 20 C.F.R. § 416.1104. To qualify for SSI benefits, the applicant has the burden to show that his or her income, both earned and unearned, falls within the statutory maximum. See Lapin v. Matthews, 422 F. Supp. 1089 (D.D.C. 1976).
In certain cases, the Act provides that income for one person is deemed as income for another individual for the purpose of determining the individual's eligibility for SSI benefits. 42 U.S.C. § 1382c(f). For dependent children, such as Jimmy, the Act provides:
For the purposes of determining eligibility for and the amount of benefits for any individual who is a child under age 18, such individual's income and resources shall be deemed to include any income and resources of a parent of such individual (or the spouse of such a parent) who is living in the same household as such individual, whether or not available to such individual, except to the extent determined by the Commissioner of Social Security to be inequitable under the circumstances.42 U.S.C. § 1382c(f)(2)(A).
Plaintiff challenges the Commissioner's final decision finding that he is ineligible for SSI benefits as a result of the income deemed to him from his mother's federal disability pension and claims that the ALJ's opinion is not supported by substantial evidence and contains errors of law. This Court finds otherwise. Although it may be counterintuitive that the Social Security Act and the Internal Revenue Code classify the same income differently, such a difference between two different federal statutes is not arbitrary or improper, and cannot be changed by this Court.
The IRS classifies Rose's pension as earned income, which is reported on line 7 of her federal tax return. (See Tr. at 42.) The SSA, as discussed above, classifies it as unearned income.
It is not irrational for Congress, in the Social Security Act, to count all sources of income, earned and unearned, as sources of support for the applicant, and to classify pension income as unearned, and to require more of an applicant's unearned income to be countable for SSI eligibility. The Act and Regulations apparently assume that for earned income (such as wages from employment) there are costs associated with working which should be excluded and not countable for SSI eligibility, while for the more passive forms of income, such as pensions, there are no costs of earning the pension itself to be considered, and therefore a greater amount of a pension would be available for supporting the household.
Unfortunately for the applicant, the Social Security regulations for SSI eligibility treat earned and unearned income differently, such that a greater portion of unearned income is countable in this situation. For earned income, the SSA deducts the general income exclusion of $20.00 and $65.00 from Rose's total income, and the result is divided by two, and the parent's allocation is deducted from the remainder, see 20 C.F.R. §§ 416.1111-.1112. An applicant qualifies if this sum, when added to the child's own income, is less than $525.25 per month, which was the Federal Benefit rate plus the New Jersey State Supplementation in March, 1998, when James applied for these benefits.
For unearned income, on the other hand, the amount of the parent's total income that is deemed to the child is reduced only by deducting the general income exclusion of $20.00 and the parent's allocation, which is equal to the Federal benefit rate for an individual, namely, $494.00, see 20 C.F.R. §§ 416.1123-.1124. This means that the law assumes that all pension income of a parent above $514.00 ($494.00 plus $20.00) is deemed available to support the child applicant.
The Commissioner has conceded that if Rose's income had beenearned income, James would have been eligible for SSI, although in a reduced amount. That her income is unearned, however, required the different calculation, and this applicant's income exceeded the eligibility threshold. Where the Congress has drawn lines to establish eligibility for a federal benefit, the line-drawing will be upheld when it can be said to be rationally related to achieving a legitimate objective. See Schweiker v. Wilson, 450 U.S. 221, 242-43, 101 S. Ct. 1074, 1087, 67 L. Ed.2d (1981) (upholding Congress's decision to decline to grant SSI benefits to a class of otherwise eligible individuals who are excluded because of their age, who are institutionalized in public mental institutions, and who do not receive Medicaid for their care). The Court has also found that legislation properly enjoys a presumption of rationality, particularly for social welfare legislation, such as SSI, where the apportionment of scarce benefits requires painful, but unavoidable line drawing.Schweiker, 450 U.S. at 243, 101 S. Ct. at 1087 (citing Mathews v. de Castro, 429 U.S. 181, 185, 97 S. Ct. 431, 434, 50 L. Ed.2d 389 (1976)). Here, Congress has determined that a disability pension received by a parent will be counted as unearned income for purposes of computing the child's eligibility for SSI benefits, even though the same amount of income, if earned from wages, would be countable in a manner more favorable to the applicant. This Court cannot say that it was irrational for Congress to place disability pensions into the category of "unearned income" for these purposes in order to determine the true nature of resources available for the child, even though in some cases, perhaps including the present one, a different categorization would seem more appropriate or fair. Legislative line-drawing will be upheld if rationally related to the congressional objective of measuring entitlement to public benefits, even if in an individual case that category produces an imperfect result. See de Castro, 429 U.S. at 185, 97 S. Ct. at 434, 50 L. Ed.2d 389.
For earned income, the calculation would have been $1,269.00 monthly income minus $20.00, minus $65.00, equaling $1,184.00, which is then divided by two, yielding $592.00. From that sum, the parent's allocation of $494.00 is subtracted, resulting in only $98.00 of Rose's income being deemed to James. James's countable income would have been $338.00 [which was $390.00 in child support reduced by one-third, plus the $98 income deemed from the parent, minus the $20 exclusion]. Because that sum is less than $525.25 (the Federal benefit rate plus the New Jersey State Supplementation in March, 1998), James would be eligible for SSI benefits in a monthly amount to close this gap, namely, $187.25 ($525.25 minus $338.00).
For unearned income, the monthly pension of $949.00 and the monthly alimony of $320.00 are added, yielding $1,269.00. The amount of unearned income deemed to James is calculated by subtracting the $20.00 general income exclusion and the $494.00 parent's allocation, yielding $755.00 deemed income to James. Of James's own income of $390.00 child support, one-third is disregarded, yielding $260.00, which is added to the deemed income of $755.00, to obtain $1,015.00. The general income exclusion of $20.00 is again subtracted, to obtain total countable income of $995.00. Since $995.00 exceeded the eligibility limit of $525.25 (which was the Federal benefit rate plus the New Jersey State Supplementation in March, 1998), James was not eligible for SSI benefits.
Applying the Social Security Act, Mrs. Wynne's federal disability pension must be classified as unearned income, a portion of which is deemed to plaintiff, and therefore plaintiff is ineligible for SSI benefits in light of his excess income, as defined by the Act and regulations.
III. Conclusion
Neither the ALJ nor the Commissioner committed any error of law when calculating Jimmy's income for the purpose of determining SSI benefit eligibility. Additionally, although unfortunate in light of his disability and moderate means, the decision of the ALJ and the Commissioner finding that Jimmy is ineligible for SSI benefits was supported by substantial evidence in the record. Accordingly, the Commissioner's decision denying plaintiff SSI benefits will be affirmed. The accompanying order is entered.
ORDER
This matter having come before the Court upon plaintiff James P. Wynne's application to review the final decision of the Commissioner of the Social Security Administration denying plaintiff's application for Supplemental Security Income benefits under Title XVI of the Social Security Act; and this Court having considered the entire administrative record and all submissions on behalf of the parties; and for the reasons stated in the Opinion of today's date; and for good cause shown;IT IS on this day of February 2002, hereby
ORDERED that the final decision of the Commissioner be, and hereby is, AFFIRMED, and that plaintiff's appeal be, and hereby is, DISMISSED.