June Ryder v. Donna E. Shalala, Secretary of The Department of Health and Human Services, 25 F.3d 944, 10th Cir. (1994)
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44 Soc.Sec.Rep.Ser. 500
June RYDER, Plaintiff-Appellee,
v.
Donna E. SHALALA, Secretary of the Department of Health
and
Human Services, Defendant-Appellant.
No. 92-1390.
United States Court of Appeals,
Tenth Circuit.
June 2, 1994.
Ralph Ogden of Wilcox & Ogden, P.C., Denver, (Steven U. Mullens of
Steven U. Mullens, P.C., Colorado Springs, with him on the brief), for
plaintiff-appellee.
Jennifer H. Zacks (Stuart E. Schiffer, Acting Asst. Atty. Gen., James R.
Allison, U.S. Atty., and William Kanter, with her on the brief), Attys.,
Appellate Staff, Dept. of Justice, Washington, DC, for defendantappellant.
Before MOORE, Circuit Judge, and McWILLIAMS, Senior Circuit Judge,
and COOK, Senior District Judge.*
McWILLIAMS, Senior Circuit Judge.
In this case we are called upon to decide the validity of Title XVI: SSI
Treatment of Veterans Administration Payments to SSI Eligibles/Fiduciaries, a
ruling by the Social Security Administration ("SSA"), which reads, in pertinent
parts, as follows:
Effective November 1981, SSA policy provides that the additional (augmented)
portion of a VA benefit when included in the VA payment to the designated
beneficiary is not income to that individual. The additional (augmented) portion
is income to the dependent.
....
4
POLICY
STATEMENT: 1. VA payments, excluding those augmented portions
which are payable because of dependents, are income to the designated beneficiary
for the purposes of determining eligibility and payment amount under the SSI
program. The augmented portion is unearned income to the dependent.
5
82-31 S.S.R. 291, 292 (Cum.Ed.1982) (hereinafter referred to as SSR 82-31).
The district court held that SSR 82-31 (a ruling, as distinguished from a
regulation) was invalid because it was in conflict with various Supplemental
Security Income ("SSI") regulations. Ryder v. Sullivan, 804 F.Supp. 1365
(D.Colo.1992). In thus concluding, the district court relied heavily on Paxton v.
Secretary of Health & Human Servs., 856 F.2d 1352 (9th Cir.1988), the district
judge stating: "I agree with the ninth circuit's decision." Ryder, 804 F.Supp. at
1368. The Secretary appeals. We reverse. The background facts are not in
dispute, and a brief recital thereof will place the single issue here involved in
focus.
June Ryder, the plaintiff in the district court, is a 41-year old woman who has
been disabled since birth because of cerebral palsy. Because she has no income,
she has been eligible for monthly SSI payments since at least 1981, and has
been receiving monthly SSI benefits for at least that period of time.
June Ryder is married to Robert Ryder, and the two of them live in the same
household. Robert Ryder is totally disabled from a diabetic condition. Robert
Ryder is a veteran and because of his disability receives a monthly Veterans
Administration ("VA") pension. Specifically, Robert Ryder receives a monthly
check, payable to him only, from the VA in a total amount of $864. Of that
amount, $564 represents Robert Ryder's so-called base amount. In addition,
Robert Ryder receives each month an additional $125 because he is
housebound, and an additional $175 per month because he has a "dependent,"
namely, his wife, June, with whom he lives. Combining these amounts, we
arrive at a total VA payment to Robert Ryder of $864 per month.
We are here concerned with the $175 payment to Robert Ryder because of his
marriage to June Ryder, a dependent, such amount being referred to as the
"augmented portion" of his total payment of $864.00 per month. Prior to 1981,
the Secretary by an interpretive ruling had counted the "augmented portion" of
a veteran's pension as unearned income to the beneficiary, in our case Robert
Ryder, when determining his eligibility for SSI benefits.
10
As the result of decisions by several Circuit Courts of Appeal holding that the
"augmented portion" of a beneficiary's VA pension resulting from the fact that
the beneficiary had dependents did not constitute "unearned income" to the
beneficiary, the Secretary changed its policy.1 In 1981 the Secretary issued SSR
82-31, set forth above, which, when applied to the instant case, meant that the
"augmented portion" of Robert Ryder's monthly VA pension, namely $175,
was no longer his "unearned income," but rather constituted "unearned income"
to his wife, June.
11
Because of his VA pension, even when excluding the "augmented portion"
thereof, Robert Ryder is not eligible for SSI benefits. However, when the
"augmented portion" of Robert Ryder's VA pension is counted as "unearned
income" to June Ryder, the latter's monthly SSI benefit is reduced accordingly,
and therein lies the present controversy.
12
June Ryder challenged administratively the diminution of her monthly SSI
benefit. The ALJ ruled in her favor, but on appeal the Appeals Council upheld
the validity of SSR 82-31.2
13
June Ryder then instituted the present proceeding in the United States District
Court for the District of Colorado. The district court agreed with June Ryder
and accordingly reversed the Appeals Council and remanded the matter for
payment to June Ryder of SSI benefits which would be calculated on the basis
that the "augmented portion" of Robert Ryder's monthly VA pension did not
constitute "unearned income" to June Ryder. The basis for the holding of the
district court was that SSR 82-31 was in conflict with several SSI regulations,
which take precedence over a ruling. As indicated, in thus holding, the district
court relied on Paxton v. Secretary, 856 F.2d 1352 (9th Cir.1988), which had
held that SSR 82-31 was in conflict with several SSI regulations.
14
Subsequent to the district court's disposition of the present matter, two other
circuits considered the precise question here presented, and held that SSR 82-31
is valid. See White v. Shalala, 7 F.3d 296 (2nd Cir.1993), and Kennedy v.
Shalala, 995 F.2d 28 (4th Cir.1993). In each case the court rejected the
reasoning of Paxton, and held that SSR 82-31 was not in conflict with the SSI
regulations perceived by the Ninth Circuit as being inconsistent with SSR 8231. Our view of this particular matter matches that of the Second and Fourth
Circuits, and we, too, decline to follow Paxton. Based on the rationale of White
and Kennedy, we also fail to see any real conflict between SSR 82-31 and the
SSI regulations relied on by counsel as being in conflict with SSR 82-31. In this
connection, the Fourth Circuit in Kennedy spoke as follows:
15
We recognize that our holding in this case is in conflict with that of the Ninth
Circuit in Paxton, in which the court concluded that SSR 82-31 was
"inconsistent with the SSI regulations." 856 F.2d at 1359. We simply disagree
with Paxton. None of the three regulatory provisions characterized by that court
as inconsistent with the Secretary's position in SSR 82-31 is in fact inconsistent
with that rule.
16
....
17
It is apparent to us that underlying Paxton was that court's belief that VA
augmentation payments should not in any way affect SSI benefits. Because of
this belief, that court strained to find, where none existed, a conflict between
SSR 82-31 and the SSI regulations, so as to avoid imputation of the veteran's
augmentation to his dependent.
18
Kennedy, 995 F.2d at 31-2 (footnote omitted).
19
In this Court, counsel's principal argument is that SSR 82-31 is invalid because
it is in conflict with 42 U.S.C. Sec. 1382a(a)(2)(B) (1988).3 That statute reads
as follows:
20
Sec. 1382a. Income; earned and unearned income defined; exclusions from
income
21
(a) For purposes of this subchapter, income means both earned income and
unearned income;
22
....
23
(2) unearned income means all other income, including--
24
....
25
(B) any payments received as an annuity, pension, retirement, or disability
benefit, including veterans' compensation and pensions, workmen's
compensation payments, old-age, survivors, and disability insurance benefits,
railroad retirement annuities and pensions, and unemployment insurance
benefits;
26
42 U.S.C. Sec. 1382a(a)(2)(B) (emphasis added).
27
Counsel argues that under the foregoing statute the "augmented portion" of
Robert Ryder's VA pension does not constitute "unearned income" to June
Ryder because she never "received" the "augmented portion." Counsel argues
that the word "received," as used in the statute, means "actually received," and
does not include constructive receipt. This same argument was considered and
rejected in both White, 7 F.3d at 302, and Kennedy, 995 F.2d at 29-30.
28
The Second Circuit in White, after considering the language of 42 U.S.C. Sec.
1382a(a)(2)(B), and the Congressional intent behind it, held that SSR 82-31
was not inconsistent with 42 U.S.C. Sec. 1382a(a)(2)(B). In so holding, the
Second Circuit spoke as follows:
29
Accordingly, we hold that the augmented portion of the veteran's benefits can
be construed as a "payment[ ] received as a ... veterans' compensation and
pension," and SSR 82-31 is a reasonable interpretation of 42 U.S.C. Sec.
1382a(a)(2)(B). Our holding is consistent with the Fourth Circuit's holding in
Kennedy v. Shalala, 995 F.2d 28 (4th Cir.1993), but contrary to the Ninth
Circuit's holding in Paxton v. Secretary of Health & Human Services, 856 F.2d
1358 (9th Cir.1988). The Ninth Circuit held that because the augmented portion
is not payable to the dependant, it is inappropriate to reduce the dependant's
SSI benefits. 856 F.2d 1352, 1358. In Kennedy, the Fourth Circuit held that "as
a general matter, 'receipt' can reasonably be understood to include not only
actual, but constructive receipt." 995 F.2d at 29-30.
30
Our interpretation and that of the Fourth Circuit is supported by Congress's
mandate that SSI "pay people only to the extent that their needs are not met
from other sources, including ... payments by other agencies," H.R.Rep. No.
231, 92nd Cong., 2d Sess. 149-50 (1971), reprinted in 1972 U.S.C.C.A.N. (86
Stat.) 4989, 5135-5136, and that the Secretary count as income "any payment
received as an annuity, pension, retirement or disability benefit, including
veteran's compensation and pensions," 42 U.S.C. Sec. 1382a(a)(2)(B). While,
as the Ninth Circuit held in Paxton, "[t]he calculation of income for SSI
purposes is not a zero-sum mathematical problem in which all forms of public
assistance must be used to reduce some family member's SSI benefits," 856
F.2d at 1357, Congress explicitly intended to include this particular form of
public assistance as income.
31
White v. Shalala, 7 F.3d 296, 302 (2nd Cir.1993).
32
Again, we choose to follow the Second and Fourth Circuits and we accordingly
conclude that SSR 82-31 is not invalid because it conflicts with 42 U.S.C. Sec.
1382a(a)(2)(B). Like the Second Circuit in White, we believe that "SSR 82-31
is a reasonable interpretation of Sec. 1382a(a)." Id.4 Since the Secretary's
interpretation of the statute is reasonable, and not inconsistent with the Social
Security Act, it is entitled to deference. Andrade v. Secretary of Health &
Human Servs., 985 F.2d 1045, 1051 (10th Cir.1993).
33
The judgment of the district court is reversed and the case is remanded with
directions that the district court enter judgment affirming the Appeals Council.
Honorable H. Dale Cook, Senior District Judge, for the Northern District of
Oklahoma, sitting by designation
See Whaley v. Schweiker, 663 F.2d 871 (9th Cir.1981) and Tsosie v. Califano,
651 F.2d 719 (10th Cir.1981). We are advised that in an unpublished opinion,
the Sixth Circuit, in Webster v. Califano, No. 78-3492 (6th Cir. July 10, 1980),
held to the same effect as Whaley and Tsosie
At the hearing before the Administrative Law Judge the evidence showed that
as of the date of the hearing Robert Ryder received a monthly VA pension of
$864 and that June Ryder received an SSI benefit in the amount of $152.20,
making a total of $1,016.20. There was evidence that of that amount, $861.95
was expended for house and car payments, and the balance, $154.25, went for
food, clothing, insurance, laundry and other miscellaneous items. Robert Ryder
testified that because of his wife's ailment, he did the family bookkeeping
The district court did not consider the question of whether SSR 82-31 was in
conflict with 42 U.S.C. Sec. 1382a(a)(2)(B), nor did the Ninth Circuit in Paxton
In Kennedy, the Fourth Circuit rejected the suggestion that the Secretary should
conduct " 'a case-by-case review of the availability of the augumentation to the
dependent,' " Kennedy v. Shalala, 995 F.2d 28, 30 (4th Cir.1993) (quoting
Appellee's Brief), and stated that "[a]s a general matter, 'receipt' can reasonably
be understood to include not only actual, but constructive receipt." Id. at 29-30
