Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-92-01390/USCOURTS-ca10-92-01390-0/pdf.json

Nature of Suit Code: 864
Nature of Suit: Social Security - SSID Title XVI
Cause of Action: 

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PUBLISH 

FILED united &tat~~ eaon of~ Tett6-el~ 

UNITED STATES COURT OF APPEALS JUN c 219M 

TENTH CIRCUIT 

JUNE RYDER, 

Plaintiff-Appellee, 

v. 

DONNA E. SHALALA, Secretary of 

the Department of Health and 

Human Services, 

Defendant-Appellant. 

ROBERT L. HOECKER 

Clerk 

No. 92-1390 

Appeal from the United States District Court 

for the District of Colorado 

{D.C. No. 92-K-891) 

Ralph Ogden of Wilcox & Ogden, P.C., Denver, Colorado {Steven U. 

Mullens of Steven U. Mullens, P.C., Colorado Springs, Colorado, 

with him on the brief}, Attorneys for Plaintiff-Appellee. 

Jennifer H. Zacks {Stuart E. Schiffer, Acting Assistant Attorney 

General, James R. Allison, United States Attorney, and William 

Kanter, with her on the brief), Attorneys, Appellate Staff, Department of Justice, Washington, D.C., for Defendant-Appellant. 

Before MOORE, Circuit Judge, and McWILLIAMS, Senior Circuit Judge, 

and COOK, Senior District Judge.* 

McWILLIAMS, Senior Circuit Judge. 

* Honorable H. Dale Cook, Senior District Judge, for the Northern District of Oklahoma, sitting by designation. 

Appellate Case: 92-1390 Document: 01019289202 Date Filed: 06/02/1994 Page: 1 
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. 

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. 

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. 

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Appellate Case: 92-1390 Document: 01019289202 Date Filed: 06/02/1994 Page: 2 
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. 

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Appellate Case: 92-1390 Document: 01019289202 Date Filed: 06/02/1994 Page: 3 
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. 

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. 

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 

1 See 

Tsosie 

advised 

Webster 

held to 

Whaley v. Schweiker, 663 F.2d 871 (9th Cir. 1981) and 

v. Califano, 651 F.2d 719 (lOth Cir. 1981). We are 

that in an unpublished opinion, the Sixth Circuit, in 

v. Califano, No. 78-3492 (6th Cir. July 10, 1980), 

the same effect as Whaley and Tsosie. 

2 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 

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Appellate Case: 92-1390 Document: 01019289202 Date Filed: 06/02/1994 Page: 4 
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. 

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 82-31. 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 

bookkeeping. 

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Appellate Case: 92-1390 Document: 01019289202 Date Filed: 06/02/1994 Page: 5 
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: · 

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. 

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. 

Kennedy, 995 F.2d at 31-2 (footnote omitted). 

In this Court, counsel's principal argument is that SSR 

82-31 is invalid because it is in conflict with 42 U.S.C. § 

1382a (a) (2) (B) (1988) . 3 That statute reads as follows: 

§ 1382a. Income; earned and unearned income 

defined; exclusions from income 

(a) For purposes of this subchapter, income 

means both earned income and unearned income; 

(2) unearned income means all other 

income, including -

3 The district court did 

whether SSR 82-31 was in 

(a) (2) (B), nor did the Ninth 

not consider the question of 

conflict with 42 U.S.C. § 1382a 

Circuit in Paxton. 

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Appellate Case: 92-1390 Document: 01019289202 Date Filed: 06/02/1994 Page: 6 
(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; 

42 u.s.c. § 1382a (a) (2) (B) (emphasis added). 

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. 

The Second Circuit in White, after considering the language of 42 U.S.C. § 1382a(a) (2) (B), and the Congressional 

intent behind it, held that SSR 82-31 was not inconsistent 

with 42 U.S.C. § 1382a(a) (2) (B). In so holding, the Second 

Circuit spoke as follows: 

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. §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 at 1358. 

In Kennedy, the Fourth Circuit held that "as a 

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Appellate Case: 92-1390 Document: 01019289202 Date Filed: 06/02/1994 Page: 7 
general matter, 'receipt' can reasonably be 

understood to include not only actual, but 

constructive receipt." 995 F.2d at 29-30. 

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. § 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. 

White v. Sbalala, 7 F.3d 296, 302 (2nd Cir. 1993). 

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. § 1382a(a) (2) (B). 

Like the Second Circuit in White, we believe that "SSR 82-31 

is a reasonable interpretation of§ 1382a(a) ." 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 (lOth Cir. 1993). 

4 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. Sbalala, 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. 

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Appellate Case: 92-1390 Document: 01019289202 Date Filed: 06/02/1994 Page: 8 
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. 

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