SSR 73-43: SECTIONS 203(h) and 203(L) (42 U.S.C. 403(h) AND 403(L)). -- DEDUCTIONS ON ACCOUNT OF WORK -- REPORT OF EARNINGS -- FAILURE TO FILE TIMELY -- GOOD CAUSE

20 CFR 404.454

SSR 73-43

Where beneficiary under age 72 failed to file a timely report of annual earnings on or before the fifteenth day of the fourth month following the close of her 1970 taxable year, but established by medical evidence that delay resulted from her serious illness and resultant loss of memory, held, good cause is shown within meaning of section 203(l) of Act for her failure to file a timely report of earnings and an additional deduction will not be imposed.

R, the worker, submitted in October 1971 her 1970 annual report of earnings, showing total earnings of $2.146. Based on this report the Social Security Administration determined that $233 should have been withheld from benefits payable in 1970. An additional deduction of $74.50 was imposed because R failed to make a report within the time prescribed by law.

Evidence of record shows that the earnings provisions were explained to R when she filed application for benefits in July 1967. At that time she had agreed to file an annual report of earnings within the time prescribed by law for any taxable year in which she earned more than the allowable amount. The evidence also shows that R made timely reports of her 1968 and 1969 earnings. Therefore, she should have been aware of the necessity for reporting her 1970 earnings timely.

Since R disagreed with the determination made on her claim, the question to be resolved is whether she had good cause for the failure to file a timely report of her 1970 earnings.

Section 203(h) of the Social Security Act provides that if an individual is entitled to a month benefit during any taxable year in which his earnings would require deductions from his benefits, he shall make a report to the Secretary of such earnings before the fifteenth day of the fourth month following the close of such taxable year. If the individual fails to make the required report, an additional deduction shall be imposed against his benefits.

Section 203(l) of the Act provides that failure of an individual to make any report required, within the time prescribed therein, shall not be regarded as such a failure if he establishes to the satisfaction of the Administration that his failure to file a timely report was due to good cause and not due to any willful neglect.

Section 404.454 of Regulations No. 4, Social Security Administration, provides, in pertinent part:

(a) The failure of an individual to make a timely report under the provisions described in section 404.450 and section 404.452 will not result in an penalty deduction if the individual establishes to the satisfaction of the Administration that his failure to file a timely report was due to good cause and not due to any willful neglect. In determining whether good cause for failure to report timely has been established by the individual, consideration is given to whether the failure to report within the proper time limit was the result of untoward circumstances, misleading action of the Administration, or confusion as to the requirements of the Act resulting from amendments to the Act or other legislation. For example, "good cause" may be found where failure to file a timely report was caused by:

(1) Serious illness of the individual, or death or serious illness in his immediate family;

* * * * * *

Subsequent to the determination in issue, R submitted a report by her physician, who had been treating her since March 1971. This report indicated that she had suffered a severe illness which caused a loss of memory. In addition, a letter from R's employer, confirmed the fact of her progressive forgetfulness, which necessitated limiting her duties to those requiring little responsibility.

Accordingly, it is held that R's failure to file a timely report of her 1970 earnings, caused by her serious illness and loss of memory, constitutes good cause within the meaning of section 203(l) of the Act and an additional deduction will not be imposed.

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