The opinion of the court was delivered by: Gershon, United States District Judge
Plaintiff James Howard brings this action pursuant to Section 405(g) of the Social Security Act, 42 U.S.C. § 405(g), to review the final decision of the Commissioner of Social Security ("Commissioner") denying his application for a waiver of recovery of an overpayment of Supplemental Security Income ("SSI") benefits. Plaintiff and defendant each move for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. For the following reasons, the case is remanded to the ALJ solely for a determination of whether plaintiff is entitled to a reduction of the subject overpayment in light of his impairment-related work expenses and, if so, in what amount.
Unless otherwise indicated, the facts set forth below are undisputed.
Plaintiff, 51 years old, suffers from severe arthritis in his hip, high blood pressure, an adrenal gland problem (hyperaldosteronism), and glaucoma of the right eye. As a result of these health problems, the Social Security Administration ("SSA") awarded him SSI benefits sometime in the late 1990s. On June 20, 2004, plaintiff began working a desk job for the New York City Transit Authority. On June 23, 2004, plaintiff notified SSA via letter of his new job and change in income. Nevertheless, SSA continued sending plaintiff benefit checks. Plaintiff attempted to contact SSA as to whether he was entitled to keep these checks in light of the change in his income.
On August 4, 2004, SSA notified plaintiff that, because of his income, he was not eligible to receive SSI for July 2004, and that his benefit amount would be $75.10 as of September. On September 24, 2004, SSA notified plaintiff that between June 2004 and October 2004, SSA had overpaid him $2,016.20 in SSI. The SSA's proffered cause for the overpayment was plaintiff's failure to timely report the change in his income. On September 27, 2004, SSA notified plaintiff that, beginning in November 2004, he would no longer receive SSI.
On November 19, 2004, plaintiff requested reconsideration of the overpayment, arguing that the overpayment amount was "too much." Administrative Record ("R.") 54. On November 24, 2004, SSA denied plaintiff's request for waiver of recovery of the overpayment, stating again that plaintiff was at fault in causing the overpayment because he did not timely report the change in his income. On January 24, 2005, SSA affirmed its decision, after which plaintiff requested a hearing before an Administrative Law Judge ("ALJ").
On August 20, 2005, SSA notified plaintiff that recovery of $651 of the overpayment would be waived because he was not working when his June 2004 benefits were paid and because he timely reported his work activity for that month. On September 5, 2005, SSA waived an additional $87.00 of the overpayment. Thus, plaintiff's overpayment was reduced from $2,016.20 to $1,365.20.
On October 19, 2005, plaintiff renewed his request for a hearing, stating he was not at fault in receiving the overpayment because he provided timely notification of the change in his income.
On May 30, 2006, a hearing was held before an ALJ. Although advised of his right to counsel, plaintiff proceeded pro se. On June 23, 2006, the ALJ found that overpayment could not be waived because plaintiff was not without fault in causing the overpayment. The ALJ found that plaintiff did timely report his work activity and earnings. However, plaintiff's letter of June 23, 2004, and his testimony before the ALJ, revealed that plaintiff knew he was not entitled to SSI benefits he continued to receive after he started working. The ALJ wrote, "[claimant] stated while under oath that he did not spent (sic) the money because he knew he should not keep it." Thus, notwithstanding SSA's failure to timely suspend plaintiff's SSI benefits, plaintiff was found to be not entitled to keep the overpayment and his request for waiver of its recovery was denied. The Appeals Council denied plaintiff's request for review on February 9, 2007. This action followed.
The court may set aside the ALJ's decision only if based on legal error or if the factual findings are not supported by substantial evidence. Beauvoir v. Chater, 104 F.3d 1432, 1433 (2d Cir. 1997). The Supreme Court has defined the term "substantial evidence" in the social security context as being "more than a mere scintilla" and as that evidence which "a reasonable mind might accept as adequate to support a conclusion." Richardson v. Perales, 402 U.S. 389, 401 (1971), quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938). If substantial evidence exists in support of the ALJ's decision, the court must uphold the decision, even if substantial evidence supports plaintiff's arguments. Perez v. Chater, 77 F.3d 41, 46 (2d Cir. 1996). ...