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GALLO v. HECKLER

January 22, 1985

GRACE GALLO, Plaintiff, against MARGARET M. HECKLER, SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant


The opinion of the court was delivered by: GLASSER

MEMORANDUM AND ORDER

GLASSER, United States District Judge:

 On an earlier motion for judgment on the pleadings in this action, the Court reversed the Secretary's denial of plaintiff's application for Widow's Disability Benefits under Title II ("Title II benefits") and Supplemental Security Income ("SSI") benefits. Judgment was entered directing the payment of benefits. Defendant now moves directing the payment of benefits. Defendant now moves under Rule 59 for an order modifying the judgment to change the manner in which retroactive benefits are calculated. For the reasons that follow, defendant's motion is granted.

 Background

 Under the earlier order entered in this case, the Secretary is directed to pay Title II benefits retroactive to the date of the death of plaintiff's husband. The order also required that the Secretary pay SSI benefits, retroactive to the date plaintiff submitted her SSI application, for any period in which income and resources, including any Widow's Disability benefits due under the Court's order, rendered her eligible for SSI benefits. *fn1" Plaintiff received public assistance benefits from New York during the period for which she is to be awarded retroactive benefits, but the amount of such public assistance is not revealed in either of the parties' papers. Defendant alleges that plaintiff signed an agreement authorizing the Secretary to make withholdings from retroactive SSI benefits to reimburse the state for public assistance payments. Plaintiff asserts that she has no recollection that she signed such an agreement. The defendant's new proposed order would required that the Secretary "pay" [calculate] the appropriate retroactive SSI benefits and then subsequently "pay" [calculate] the appropriate retroactive Title II benefits. *fn2"

 Discussion

 This motion concerns the interplay of three provisions of the Social Security Act which defendant contends produce an inequitable result in this case if the Secretary calculates retroactive Title II benefits before calculating retroactive SSI benefits.

 Section 1382(c) of Title 42 of the United States Code provides that an individual's eligibility for SSI benefits for any month "shall be determined on the basis of the individual's . . . income, resources, and other relevant characteristics in such month." This section has been interpreted to require that benefits be based on income actually received during the relevant quarter. 20 C.F.R. §§ 416.200; 416.1123(a) and (d). *fn3" Thus, if a Title II payment was made in a given month, that payment would be considered income in determining the eligibility for SSI in that month. If a Title II payment was not actually received in that month, but was awarded later, retroactively to that month, the SSI payment already received would not be reduced by the Title II award. For example, if claimant "X" received a $300 SSI payment for the month of April 1983 and in June 1984, a $200 Title II benefit was awarded retroactively for April 1983, the $300 SSI payment would not be reduced by the retroactively awarded Title II benefit.

 For such situations, § 1320a-6 specifically provides that retroactive Title II benefits shall be adjusted for SSI benefits previously paid for the same month. *fn4" See also 20 C.F.R. § 416.1123(d). For example, in the illustration above, assume that the $200 Title II benefit was actually paid and received in April 1983. That money, being income, would have reduced the amount of the SSI benefit payable to X. When awarded retroactively, the Title II benefit will be reduced by the amount for which the SSI benefit would have been reduced had the Title II payment actually been made in April 1983. Section 1320a-6 thus prevent a claimant from enjoying a "windfall" of duplicative benefits under both SSI and Title II where the SSI benefits were calculated without considering income later awarded under Title II. This current version of § 1320a-6 does not provide for a similar adjustment where retroactive Title II benefits are paid before a retroactive SSI award. Consequently, the section was recently amended to provide for such an adjustment for SSI benefits payable retroactively after February 1, 1985. *fn5"

 When SSI benefits are not paid when due by the Secretary, the state may provide interim financial assistance by way of public assistance payments. If SSI payments are later awarded retroactively, 42 U.S.C. § 1383(g)(1) provides that the Secretary may, upon written authorization from the claimant, withhold from the retroactive SSI benefits an amount sufficient to reimburse the state for interim assistance furnished to the claimant. This provision applies only to SSI benefits; there is no similar provision applies only to SSI benefits; there is no similar provision for Title II benefits.

 The potential interaction of these three sections in the context of this case is well illustrated by three examples described by defendant in her Memorandum of Law:

 
Assume that during February 1983 claimant received $200 in public assistance from New York, that she is now entitled to $400 for that month in retroactive Title II benefits under this court's order and that she is entitled to up to $300 in retroactive SSI benefits for that month under this court's order. First, assume that the Title II benefits are paid before the SSI benefits. Plaintiff will have received $200 from the State and will receive an additional $400 under Title II. The $600 received exceeds the $300 monthly income guaranteed by SSI. However, because plaintiff actually received only $200 during February 1983 and SSI guarantees receipt of at least $300 during the month, § 1382(c)(1) requires that plaintiff be paid an additional $100 of SSI under the Court order. The state will receive reimbursement through § 1383(g)(1) of the $200 remaining on plaintiff's SSI award. This is the result that the Court's current order will impose upon the Secretary.
 
However, for a second example, if the SSI benefits are paid before the Title II benefits, the result is different. Again, plaintiff has received $200 from the state. Pursuant to § 1383(g)(1), the Secretary will reimburse the state for the $200 of public assistance and pay the remaining $100 of the SSI benefits due to plaintiff. The total of public assistance and the SSI payment for the month is then equal to the intended amount of $300. With regard to the Title II benefits, under § 1320a-6 the total of $300 of SSI benefits paid to claimant and the state will be offset against the $400 payable under Title II, resulting in an additional payment of only $100 to plaintiff under Title II. This is the result that the Secretary believes is appropriate in this case.
 
A third result is obtained if the Court's present order is followed to the letter. Again, plaintiff has received $200 from the state. She is now entitled to $400 in Title II benefits under this court's order. The $600 received exceeds the $300 monthly income guaranteed by SSI. Accordingly, plaintiff would have no benefits due under the SSI award because of the offset provision in paragraph 4 of the order. (The offset provision however violates § 1382(c)(1). However, ...

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