Rescinded 1981

SSR 68-66c: Section 202(c)(1)(C).—Husband's Insurance Benefits—One-Half Support—Pooled Income

20 CFR 404.350

SSR 68-66c

LEWIS v. GARDNER, U.S.D.C., Md., Civil No. 18741 (2-21-68) (CCH U.I.R. Fed. Par. 958)

Where a claimant filed an application for husband's insurance benefits based on his wife's earnings record and the evidence established that during the 12-month period preceding the wife's entitlement to old-age insurance benefits, the wife's total income was $6,074.23 and the husband's total income was $2,988.30, and there was no evidence that any significant part of the income of either was used for other than living expenses, held, under such circumstances it is reasonable to assume that husband and wife shared equally in the total family income of $9,062.53, and thus that the cost of the husband's support was one-half of the total ($4,531.26), and since the husband's own income of $2,988.30 was greater than one-half of the $4,531.26, the husband was not receiving at least one-half of his support from his wife at the time she became entitled to old-age insurance benefits; therefore, the husband is not entitled to husband's insurance benefits.[*]

THOMSEN, Chief Judge: This is an action brought under Section 205(g), of the Social Security Act, 42 U.S.C.A. 405(g), to review a final decision of the Secretary of Health, Education and Welfare, by the Appeals Council, denying husband's insurance benefits to plaintiff. The final decision must be affirmed if it is in accordance with law and supported by substantial evidence. Snyder v. Ribicoff, 307 F. 2d 518 (4 Cir., 1962); Thomas v. Celebrezze, 331 F. 2d 541 (4 Cir., 1964).

Section 202(c) of the Act, 42 U.S.C.A. 402(c), provides that the husband of a currently insured individual[**] entitled to old-age benefits shall be entitled to husband's insurance benefit if he fulfills certain conditions. The only condition in question here is whether the husband "was receiving at least one-half of his support, as determined in accordance with regulations prescribed by the Secretary," from his wife at the time she became entitled to old-age benefits on August 17, 1964.

The applicable regulations (Section 404.4350 of Social Security Administration Regulations No. 4) 20 CFR 404.350, provide:

(b) What Constitutes"At Least One-Half Support."— A person is receiving at least one-half of his support from the insured individual at a specified time, if such individual, for a reasonable period (as defined in paragraph (e) of this section) before the specified time made regular contributions, in cash or kind, to such person's support and the amount of such contributions equalled or exceeded one-half of such person's support during such period.

(c) "Support Defined".—The term "support" includes food, shelter, clothing, ordinary medical expenses, and other ordinary and customary items for maintenance of the person supported.

(d) "Contributions" Defined.—"Contributions," as used in this section, means contributions actually provided by the contributor from his own property, or the use thereof, or by the use of his own credit. When a person receives, and uses for his support, income from his services or property and such income, under applicable State law, is community property of himself and his spouse, no part of such income is a "contribution" by the property of his spouse and, under applicable State law, such income is community property, all of such income is considered to be a contribution by such spouse to such person's support.

(e) "Reasonable Period" Defined.—(1) Ordinarily, a period of 12 months (except where there is a change in the support situation in such period) ending with the specified time is a reasonable period for purposes of determining whether the one-half support requirement is met at the specified time.

In view of paragraphs (e)(1)(20 CFR 404.350 (e)(1), we should consider first the fats relating to plaintiff's support during the 12-month period preceding August 17, 1964, when his wife became entitled to old-age insurance benefits. Since Mr. Lewis ceased working on July 27, 1964, the payment center used the period July 27, 1963, to July 27, 1964, as the "support period" so that it would include a full year's salary for Mrs. Lewis. The Appeals Council found that to be a reasonable period.

During that 12-month period Mr. and Mrs. Lewis resided in a house they owned jointly. The husband's income during that period consisted of a disability pension from the Baltimore City Fire Department which totalled $2,988.30. The wife's income consisted of $5,052.37 wages, plus $360.11 dividends. She also withdrew $661.75 form her savings account. Considering the entire withdrawal as income, the total family income for the 12-month period was $9,062.53. The family income was used for the necessities of life; very little was saved, and that little was in the form of payroll deductions from the wife's salary.

The Appeals Council stated:

Generally, for the purpose of deciding the question of "one-half support," it is assumed, in the absence of evidence to the contrary, that the members of the household share the family income equally. The cost of the support of anyone family member of a family group may be determined by dividing the amount expended for the support of the group by the number of people making up the group. Thus, in the instant case, the total income of the family unit was $9,062.53, and the claimant's support cost would be one-half of the amount $4,531.26).

Inasmuch as the claimant's own income of $2,988.30 was greater than one-half of the $4,531.26 required for his support, it follows, and the Appeals Council finds, that the claimant was not receiving at least one-half of his support from his wife at the time she became entitled to old-age insurance benefits.

The Hearing Examiner had taken a diametrically opposite position. He stated:

Since most of their income was needed for necessities and Frances Lewis had income which was substantially greater than the claimant's pension, it is an arithmetical certainty that she paid more than half of his support.

If the Hearing Examiner is right, then, whenever two persons live together and pool their income for living expenses, the one with the smaller income would always receive more than half his support from the other, and if their incomes were exactly equal, each would receive at least one-half of his support from the other, unless it could be shown that they did not benefit equally from the total expenditures.

The position taken by the Appeals Council includes two propositions. The first is that it will be assumed, in the absence of evidence to the contrary, that the members of a household share equally in the benefits precluded by the expenditure of the family income. This is a reasonable presumption, and it is not rebutted by the evidence in this case.

The second proposition is that as a matter of law each of the two members of the household must be considered to have exhausted his own income before any part of the other's income can be found to have been used for something other than the family expenses. [1] There was no evidence in this case that any part of the husband's pension was used for anything other than the family expenses, and both the Hearing Examiner and the Appeals council found that it was all used for that purpose. The position taken by the Appeals Council is supported by Clark v. Celebrezze, 230 F. Supp. 798 (D. Mass. 1964), the only case in point cited or found.[2]

Paragraph (b) of section 404.350 of the Regulations, quoted above, is not as specific as it might be, and would profit by clarification; but as the Regulation now stands, the position taken by the Appeals Council is not contrary to paragraph (b) and receives some support by way of analogy from paragraph (d), which deals with community property.

An inflexible use of the formula applied by the Appeals Council would be unfair in certain cases. For example, the combination of this formula and the arbitrary use of a 12-month period which is not truly representative may work an injustice in a particular case. See Gray v. Gardner, 261 F. Supp. 736 (D.D.C. 1966). But it is not necessary in this case to approve an inflexible use of the formula, nor to hold that its application should always be conclusive. Here, it appears that the Appeals Council gave consideration to all of the evidence. It stated:

The Appeals Council has carefully considered the testimony of the claimant and Mrs. Lewis, and the documents showing payments on furniture, housing and other necessities, in arriving at its decision. The income derived by the claimant and the wage earner was used for their mutual support and mathematical analysis will not support a finding that the claimant received at least one-half of his support from the wage earner during the support period, and, in fact, an analysis of the income of the parties since 1955 from Mrs. Lewis.

The latter portion of the last sentence in the above quotation is clearly not complete; the Appeals Council evidently intended to say that the result would not have changed if the entire period form 1955 to 1964 had been considered. Such a conclusion is supported by the evidence. During the years 1956-1963 the wife's income was $3,962.59; $3,800.00; $4,000.00; $3,996.00; $4,417.00; $4,327.00; $4,672.00; and $4,800.00, respectively. During the same period, 1956-1963, the husband's pension from the Baltimore City Fire Department was $2,316.51; $2,250.00; $2,500.00; $2,500.00; $2,500.00; $2,625.22; $2,750.20; and $2,875.20, respectively. During the years 1958 to 1962 they paid off at the rate of $80.00 per month a $4,400.00 mortgage on their jointly-owned home, which they has purchased in 1958, using the proceeds of their former home which had been purchased out of their combined earnings. They also bought a car in 1962 for approximately $2,300.00, using some telephone stock which the wife owned as collateral for a loan to purchase the car, which has been paid. It appears that all or substantially all of the husband's pension and the remainder of the wife's salary, after certain deposits in a savings account and credit union account, were used for the payment of utility bills, food, clothing and their necessary expenses. The husband has been carried under the wife's Blue Cross plan.

The court cannot agree with the Hearing Examiner that it is an "arithmetical certainly that she paid more than one-half of his support." True, the wife contributed more than one-half of the total for the two of them, and for many purposes the husband would be considered to have been partially dependent upon her. But the statute with which we are dealing in this case does not permit the award of husband's benefits based upon partial dependency. Section 202(c)(1)(C), quoted above, requires that the husband prove that he "was receiving at least one-half of his support, as determined in accordance with regulations prescribed by the Secretary," from his wife.

When all of the facts are considered, this court reluctantly agrees that there is substantial evidence in the record to justify the conclusion of the Appeals Council that plaintiff did not receive at least one-half of his support form his wife either during the 12-month period, July 27, 1963 to July 27, 1964, or during the entire period 1955 to 1964.

The decision of the Secretary must be and it is hereby affirmed.

[*]* See also SSR 64- 53, C.B. 1964, p. 4.

[**] Section 157(a)(1) of the Social Security Amendments of 1967 (P.L. 90-248), enacted January 2, 1968, eliminated the requirement that an insured worker must be currently insured, applicable with respect to applications filed in or after January 1968 and to monthly benefits payable after January 1968. [Ed.]

[1] E.g., for the support of an indigent sister not living in the household.

[2]The problem is not the same as was presented in such cases as Ketcherside v. Celebrezze, 209 F. Supp. 226 (D. Kan., 1962), where two income-earning individuals had contributed to the support of a third (non-earning) individual.

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