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October 5, 1981

Nathan ROSOFSKY, Plaintiff,
Richard S. SCHWEIKER, Secretary of Health and Human Services, Defendant

The opinion of the court was delivered by: NICKERSON


Plaintiff brought this action under section 205(g) of the Social Security Act (the "Act"), as amended, 42 U.S.C. § 405(g), to review a final determination of the Secretary of Health and Human Services (the "Secretary") that plaintiff was not entitled to husband's insurance benefits because they were entirely offset by the amount of his government pension, and that plaintiff was overpaid and must repay $ 859.20. The Secretary moves under Rule 12(c) of the Federal Rules of Civil Procedure for judgment on the pleadings.


 Section 202(c) of the Act, 42 U.S.C. § 402(c), as it stood in January 1977, provided, in pertinent part, that a husband of a woman entitled to old-age or disability insurance benefits could obtain a "husband's insurance" benefit if he met certain conditions. If he (A) had filed for such benefits, (B) had attained age 62, (C) had been receiving at least one-half his support from his wife, and (D) was not eligible for certain old-age or disability insurance benefits, he became entitled to the "husband's insurance" benefit. To receive a "wife's insurance" benefit, the wife of a man receiving old-age or disability benefits, had to meet all these conditions except one. She did not have to show that she had received one-half her support from her husband. Section 202(b) of the Act, 42 U.S.C. § 402(b).

 In Califano v. Goldfarb, 430 U.S. 199, 97 S. Ct. 1021, 51 L. Ed. 2d 270 (1977), decided March 7, 1977, the Supreme Court, in considering an almost identical provision as to survivor's benefits, held that such a difference in the treatment of husbands and wives violated the due process clause of the Fifth Amendment to the United States Constitution. The opinion of Brennan, J., joined by three other Justices, rejected a distinction based on gender "that results in the efforts of female workers required to pay social security taxes producing less protection for their spouses than is produced by the efforts of men." Id. at 206-207, 97 S. Ct. at 1026-27. The opinion concluded "that the differential treatment of nondependent widows and widowers results not ... from a deliberate congressional intention to remedy the arguably greater needs of the former, but rather from an intention to aid the dependent spouses of deceased wage earners, coupled with a presumption that wives are usually dependent." Id. at 216-17, 97 S. Ct. at 1031-32. This presumption, according to the opinion, is "based simply on "archaic and overbroad' generalizations that it would save the Government time, money, and effort simply to pay benefits to all widows, rather than to require proof of dependency of both sexes.... (Such) assumptions do not suffice to justify a gender-based discrimination in the distribution of employment-related benefits." Id. at 217, 97 S. Ct. at 1032 (citations omitted). Stevens, J., concurred on the ground that the discrimination was against males and was merely the accidental byproduct of a traditional way of thinking about females. Id. at 222, 97 S. Ct. at 1034. Four Justices dissented in an opinion by Rehnquist, J.

 Two weeks later, on March 21, 1977, the Supreme Court rendered unanimous summary affirmances in Jablon v. Califano, 430 U.S. 924, 97 S. Ct. 1539, 51 L. Ed. 2d 768, affirming 399 F. Supp. 118 (D.Md.1975) (three judge district court), and Califano v. Silbowitz, 430 U.S. 924, 97 S. Ct. 1539, 51 L. Ed. 2d 768, affirming 397 F. Supp. 862 (S.D.Fla.1975), thereby making it clear that the result in the Goldfarb decision applied to the companion legislation establishing husband's insurance benefits. As a result the Social Security Administration granted such benefits without regard to dependency.

 Robert M. Ball, former Commissioner of Social Security, explained to the Subcommittee on Social Security of the House Ways and Means Committee that "(the) principle (sic) effect of the March 1977 Supreme Court decisions granting benefits to husbands and widowers under the same conditions as those previously applicable to wives and widows (that is, without a specific test of dependency) is to make eligible for social security benefits a substantial number of men who have worked for the Federal Government or for those state and local governments not covered by social security and whose wives have worked under social security. Very few of these men are in any real sense the economic dependents of their wives...." Hearings before the Subcommittee on Social Security of the Committee on Ways and Means, House of Representatives, 95th Cong., 1st Sess., p. 158 (July 18, 1977).

 This result provided a "windfall" for retired male government employees not covered by social security but married to wives who had worked in covered employment. Had these men worked in the private sector, they would be eligible for old age insurance benefits or husband's insurance benefits, but not both. Under section 202(k)(2)(B) of the Act, 42 U.S.C. § 402(k)(2)(B), a person eligible for more than one type of monthly insurance benefit is entitled to receive only the one providing the largest benefit amount. But since a retired male government employee receives a civil service pension and not social security old age benefits, he became entitled under the Supreme Court decisions to receive both the pension and husband's insurance benefits.

 To be sure, retired female government employees with husbands covered by social security had always received this "windfall". But when it was extended to men Congress took steps to eliminate it, evidently because the inclusion of men added substantially to the burden on the public fisc. Lawrence Alpern, Deputy Chief Actuary for the Office of the Actuary of the Social Security Administration, estimated on May 5, 1975 that elimination of the dependency requirement for husband's insurance benefits would cost approximately 411 million dollars in calendar year 1976. Jablon v. Califano, 399 F. Supp. at 132. The burden could be expected to increase over time because of cost of living benefit raises and the increase in the number of elderly.

 Congress' response was to pass, as an amendment to the Act, Section 334 of Public Law 95-216 in December 1977, providing that the amount of wife's or husband's insurance benefits due to an individual under social security would be offset by the amount of government pension benefits paid to that individual. Under this legislation a retired male government employee otherwise entitled to receive, for example, $ 100 per month in husband's insurance benefits would receive nothing if his civil service pension provided more than $ 100 a month. If his civil service pension provided less than $ 100, for instance, $ 80, he would receive husband's insurance benefits totalling only the difference in the two benefit amounts, in this example, $ 20. The pension offset provision was made applicable to monthly insurance benefits payable beginning in December 1977 on the basis of applications filed in or after December 1977. P.L. 95-216, § 334(f) (1977); 20 C.F.R. § 404.408a(d).

 However, in the amendment Congress provided an exception to the pension offset provision. Subsection 334(g) of Public Law 95-216 provides, in pertinent part, that the pension offset to insurance benefits is not to apply to an individual (A) who is eligible for a government pension for any month within the 60-month period beginning with the month the amendment is enacted (December 1977), and (B) who, "at the time of application for or initial entitlement to" insurance benefits, "meets the requirements" of the Act "as it was in effect and being administered in January 1977." This exception means that the pension offset does not apply to an individual eligible for a government pension in December 1977 through December 1982 and who meets the requirements for wife's or husband's insurance benefits under the Act as it was "in effect and being administered in January 1977."


 On November 1, 1977 plaintiff's wife Miriam Rosofsky filed an application for old age retirement insurance benefits under the Act. On that same date plaintiff an employee of the United States Treasury Department from 1928 through 1972 and now retired on a federal pension filed an application for husband's insurance benefits. In February 1978, the month plaintiff's wife turned sixty-two, both plaintiff and his wife became eligible for and began receiving insurance benefits.

 In a letter dated September 20, 1978 the Social Security Administration notified plaintiff that his spousal insurance benefits must be reduced by the monthly amount of his pension, and that since his pension exceeded his spousal benefit, no benefits were payable and he had been overpaid $ 859.20 from March 1978 through August 1978. Plaintiff requested reconsideration. On January 12, 1979 the Social Security Administration affirmed the earlier finding and held that he must repay the $ 859.20.

 Plaintiff sought review, and in a decision dated May 25, 1979 Administrative Law Judge ("ALJ") Joseph A. Graziano found in plaintiff's favor. The ALJ noted that the statutory requirement of one-half support for husband's insurance benefits was not being followed in January 1977. A husband unable to demonstrate dependency who applied for benefits at that time received a notice informing him that the one-half support requirement was under review by the Supreme Court and that all applications were being held in abeyance until the Supreme Court ruled on its constitutionality. If plaintiff had applied for husband's insurance benefits in January 1977 and met all the requirements except dependency, his application would have been allowed following the Supreme Court decision in Califano v. Goldfarb. The ALJ therefore held that plaintiff had satisfied the exception to the pension offset provision by meeting the requirements of the Act "as it was in effect and being administered in January 1977" and should receive husband's insurance benefits without offset until at least November 1982.

 On October 24, 1979 the Appeals Council decided to reopen the ALJ's decision under the authority of 20 C.F.R. § 404.957(b) (current version at 20 C.F.R. 404.988(b)) which provided that an otherwise final decision of an ALJ might be reopened within four years after the date of the notice of initial determination upon a finding of good cause. Good cause was deemed to exist when "(there) is an error as to such determination or decision on the face of the evidence in which such determination or decision is based." 20 C.F.R. § 404.958(c) (current version at 20 C.F.R. 404.989(a)(3)). The Appeals Council proposed to find that the one-half support requirement was indeed in effect in January 1977 and that plaintiff ...

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