SSR 76-20c: SECTIONS 202(d) and 204(b) (42 U.S.C. 402(d) and 404(b))
-- CHILD'S INSURANCE BENEFITS -- OVERPAYMENTS -- CHILD OVER AGE 18 NO
20 CFR 404.506 and 404.507
MUNCE v. MATHEWS, 1A Unempl. Ins. Rep. #14,611 (S.D. Ohio 1976)
The child's insurance beneficiary born in January 1953 was graduated from
high school in June 1972 and did not continue in school after that date.
Knowing that entitlement to child's insurance benefits terminates when a
beneficiary over age 18 is no longer a full-time student, the plaintiff
continued to accept monthly benefit payments in the belief that
notification of these events was unnecessary and that payments would
terminate automatically. Held, in continuing to accept such
payments with the knowledge that entitlement had ceased, plaintiff was not
without fault in causing the overpayment of benefits and recovery of the
overpayment may not be waived pursuant to section 204(b) of the Social
DUNCAN, District Judge:
This is an action under the Social Security Act, 42 U.S.C. Section
405(g), for review of a final decision of the Secretary of Health,
Education and Welfare refusing to waive repayment of an overpayment of
social security benefits. This matter is before the Court on plaintiff's
motion for summary judgment.
Since 1959, plaintiff and her children have been receiving survivor
benefits under the Social Security Act. A child is entitled to benefits
until he reaches the age of 18. If a child continues in regular school
attendance, he is entitled to benefits from age 18 to age 22. Plaintiff's
daughter, Alice M. Estep, was born January 1, 1953. In June, 1972, she
graduated from high school. She did not thereafter attend school; thus,
she became ineligible for further benefits in June, 1972. Neither
plaintiff nor her daughter notified the Social Security Administration of
the daughter's ineligibility. An overpayment of $1,255.70 resulted.
The administrative law judge made the following findings of fact which
are fully supported by the record before the Secretary:
During the oral hearing, at which the appellant, Ruth K. Munce, and her
attorney, James W. Brown, appeared and participated on October 18, 1974,
Mrs. Munce testified that she actually telephoned the Social Security
District Office and informed them that Alice was no longer in regular
school attendance. She stated that she was told by an individual to whom
she talked on the telephone at the district office not to bother them with
this information because they automatically adjust payments to children
when they attain age 18, or when they stop going to school after age 18.
She could not explain how anyone could expect the Social Security
Administration to know that a child had discontinued school attendance,
unless notification was given. In a questionnaire dated August 3, 1973,
the appellant stated "I thought the Social Security Office made the
adjustments themselves when a child reached 18 or finished school, as they
did with the other children." Thus, the appellant's statements on August
3, 1973 and during the course of the hearing are to the effect that she
believed that she was not required to notify the Social Security
Administration that Alice was no longer in school attendance after June
The fact remains, however, that Mrs. Munce did send a notice in March of
1971 with respect to the school year ending June 1971. On that notice, she
indicated that Alice was still in full time school attendance; that Alice
intended to continue full time school attendance; and that she intended to
continue in full time school attendance through the next school year
ending June 1972. The next notice sent by Mrs. Munce to the Administration
contains no dates and was received by the Administration in April 1973. It
shows that Alice is not attending school and that she does not intend to
attend school. Upon further inquiry, it developed that June 1972 was the
last month in which Alice attended school, and that, therefore, she
obtained a job.
On the basis of a refund questionnaire completed by Mrs. Munce, it is
apparent that recovery of the overpayment of $1,255.70 would result in
some financial hardship. However, I cannot, under the circumstances of
this case, find that the appellant was without fault in causing the
overpayment. On the contrary, I specifically find that the appellant knew
of her obligation to notify the Administration that Alice discontinued
regular school attendance after June 1972. I assign no credibility to her
assertion that she was informed by employees of the District Office not to
bother them with such information because they automatically took the
proper action in such cases. The fact that she actually did send notices
with respect to Alice's school attendance in March 1971 and in April 1973
clearly indicates that she knew of her obligation to report this event,
and that she actually did report the events, but not in time to avoid the
overpayment. Consequently, I am persuaded, and I so find, that the
appellant was not without fault in this matter.
By reason of the foregoing, it is my decision that adjustment or recovery
of the overpayment in this case may not be waived.
Under the provisions of 20 C.F.R. § 404.506 the Secretary will waive
recovery of an overpayment if the recipient was "without fault" and the
recovery would either "(1) Defeat the purpose of Title II of the Act of
(2) Be against equity in good conscience." Fault is defined in 20 C.F.R.
"Fault" as used in "without fault" . . . applies only to the individual.
Although the Administration may have been at fault in making the
overpayment, that fact does not relieve the overpaid individual or any
other individual from whom the Administration seeks to recover the
overpayment from liability for repayment if such individual is not without
fault. In determining whether an individual is not without fault, the
Administration will consider all pertinent circumstances, including his
age, intelligence, education, and physical and mental condition. What
constitutes fault . . . on the part of the overpaid individual . . .
depends upon whether the facts show that the incorrect payment to the
individual . . . resulted from:
(a) An incorrect statement made by the individual which he knew or should
have known to be incorrect; or
(b) failure to furnish information which he knew or should have known to
be material; or
(c) with respect to the overpaid individual only, acceptance of a payment
which he either knew or could have been expected to know as incorrect.
The administrative law judge's determination that plaintiff was not
without fault is supported by substantial evidence. Plaintiff's theory is
that she thought the Social Security Administration would make the
adjustments to the social security payments when the child reached age 18
or finished school. She further states that she was so informed by a local
social security administration office. Assuming these facts to be true,
plaintiff knew that her daughter's benefits should have been terminated in
June, 1972 when she quit school. She was merely under the belief that the
Social Security Administration would automatically terminate the payments.
When the administration did not, plaintiff then, of necessity, knew that
she had received an overpayment of social security benefits. Plaintiff,
therefore, accepted, the payment on behalf of her daughter knowing it to
have been incorrect.
WHEREUPON, the Court HOLDS that plaintiff's motion for summary judgment
is without merit, and therefore it is DENIED. The decision of the
Secretary of Health, Education and Welfare is AFFIRMED.
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