Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-15-03253/USCOURTS-ca7-15-03253-0/pdf.json

Parties Involved:
Carolyn W. Colvin
Appellee
Ronald M. Hawrelak
Appellant

Document Text:

United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

Submitted June 23, 2016*

Decided June 24, 2016

Before

FRANK H. EASTERBROOK, Circuit Judge

ILANA DIAMOND ROVNER, Circuit Judge

DIANE S. SYKES, Circuit Judge

No. 15-3253

RONALD M. HAWRELAK,

Plaintiff-Appellant,

v.

CAROLYN W. COLVIN,

Acting Commissioner of Social Security,

Defendant-Appellee.

Appeal from the United States District 

Court for the Central District of Illinois.

No. 13-3026

Sue E. Myerscough,

Judge.

O R D E R

Ronald Hawrelak appeals the district court’s judgment affirming the decision of 

the Commissioner of Social Security to reduce his Social Security retirement benefits

based on his receipt of similar benefits from Canada. Because substantial evidence 

supports the Commissioner’s decision, we affirm.

This appeal arises under the Social Security Act’s “windfall elimination 

provision,” which reduces the benefits received by certain individuals who also receive 

 

* After examining the briefs and the record, we have concluded that oral 

argument is unnecessary. Thus the appeal is submitted on the briefs and the record.

See FED. R. APP. P. 34(a)(2)(C).

NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with Fed. R. App. P. 32.1

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No. 15-3253 Page 2

pensions for work that did not require them to pay social security taxes. See 42 U.S.C. 

§ 415(a)(7); Petersen v. Astrue, 633 F.3d 633, 634 (8th Cir. 2011); Stroup v. Barnhart, 

327 F.3d 1258, 1259 (11th Cir. 2003). Essentially, the provision seeks to preserve the 

progressive nature of the Social Security system by ensuring that the formula the 

agency uses to calculate benefits does not advantage high-income workers who split 

their careers between covered and non-covered employment over those who paid 

Social Security taxes for their entire careers. See Francine Lipman & Alan Smith, 

The Social Security Benefits Formula and the Windfall Elimination Provision: An Equitable 

Approach to Addressing ‘Windfall’ Benefits, 39 J. LEGIS. 181, 187–93, 198–202 (2013); 

WILLIAM R. MORTON, CONG. RESEARCH SERV., 98-35, SOCIAL SECURITY: THE WINDFALL 

ELIMINATION PROVISION (WEP) 1–6 (2016), https://www.fas.org/sgp/crs/misc/98-35.pdf.

Although most claimants affected by the provision are former government employees 

who spent part of their careers in the private sector, the provision also applies to 

claimants who receive benefits from a foreign government based on their work 

(as opposed to their residence or citizenship), see 20 C.F.R. § 404.213(a)(3); 

Social Security Administration Program Operations Manual System (POMS) 

GN 00307.290, https://secure.ssa.gov/poms.nsf/lnx/0200307290.

Hawrelak, a naturalized American citizen from Canada, receives monthly 

retirement benefits from both countries. In December 2005 he began receiving $1,715.20 

per month from the Social Security Administration and an additional $278.93 per month 

(in Canadian dollars) from the Canada Pension Plan, that country’s equivalent to 

Social Security. These benefits were based on contributions made during the 24 years 

Hawrelak had worked in the United States and the 10 years he previously had worked 

in Canada.

Hawrelak wrote to the Social Security Administration in February 2006 seeking 

assurance that the Canadian benefits would not affect his Social Security benefits.

The agency didn’t respond until June 2007, when it informed him that his Social 

Security benefits would be retroactively reduced to $1,483.40 and that he would be

responsible for thousands of dollars he had been overpaid. The notice attributed the 

overpayment to Hawrelak’s receipt of “a pension based on work [that] is not covered by 

Social Security,” and explained that this circumstance had required the agency to 

recalculate his benefits. The agency later agreed to waive the overpayment but has 

continued to pay him the reduced amount. 

Hawrelak sought reconsideration of the agency’s decision, and in April 2008 the 

agency determined that his benefits had been properly reduced under the windfall 

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elimination provision. An administrative law judge upheld that decision in March 2009,

as did the Appeals Council in July 2011.

Hawrelak then sought judicial review in the district court, but by then the record 

of his hearing before the ALJ had gone missing, so the case was remanded for a new 

hearing. In May 2014 the ALJ again upheld the agency’s reduction of his benefits. 

The Appeals Council rejected Hawrelak’s challenge to the ALJ’s decision, and the 

district court affirmed.

In this court Hawrelak continues to contest the applicability of the windfall 

elimination provision, beginning with his argument that the Canadian benefits are 

exempt under a “totalization agreement” between the United States and Canada. 

Totalization agreements provide for the grant of retirement benefits to persons who 

split their careers among two or more countries and thus lack sufficient periods of 

covered employment under each country’s retirement system to qualify for benefits. 

See 42 U.S.C. § 433(c)(1)(A); Sambataro v. Comm’r of Soc. Sec., No. 13-cv-8953, 

2015 WL 1539046 at *2 (S.D.N.Y. Apr. 6, 2015); Vanlerberghe v. Apfel, 82 F. Supp. 2d 1212, 

1215 (D. Kan. 2000); U.S. Soc. Sec. Admin., U.S. International Social Security Agreements, 

https://www.ssa.gov/international/agreements_overview.html (visited June 24, 2016). 

Hawrelak notes, as he did before the ALJ, that the windfall elimination provision does 

not apply to payments “by a social security system of a foreign country based on 

[a totalization] agreement concluded between the United States and such foreign 

country.” 42 USC § 415(a)(7)(A)(ii).

Hawrelak, however, misapprehends the applicability of any totalization 

agreement to his circumstances. As the ALJ properly found, Hawrelak’s two pensions 

are not based on a totalization agreement; his work history in both the United States and 

Canada qualified him for benefits without totalization, so the agreement does not apply 

to his case. See Vanlerberghe, 82 F. Supp. 2d at 1215 (claimant who receives retirement 

benefits from two countries is “not in need of the savings provisions of a totalization 

agreement”); Newton v. Shalala, 874 F. Supp. 296, 299 (D. Or. 1994) (“Because plaintiff 

has enough United States earnings to qualify for United States coverage, she cannot 

receive totalized benefits under the treaty.”)

Hawrelak next contends, also as he did before the ALJ, that his employer never 

contributed to the Canada Pension Plan on his behalf and, therefore, that the windfall 

elimination provision does not apply to him. This argument is based on guidance in the 

agency’s Program Operations Manual System, which says that the agency will not 

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apply the provision “i[f] only employee contributions are involved and the payment 

amount is based on employee contributions plus interest, i.e., a savings plan.” POMS RS 

00605.364.A.1.b, https://secure.ssa.gov/apps10/poms.nsf/lnx/0300605364. The ALJ 

rejected this argument, noting that nothing in the record supported Hawrelak’s 

assertion that his employer did not contribute to the Canada Pension Plan.

Substantial evidence supports the ALJ’s decision. Absent exceptions not relevant 

here, Canadian law requires employers to contribute to the Canada Pension Plan. 

See Canada Pension Plan, R.S.C. 1985, c. C-5, § 9 (requiring employers to contribute a 

percentage of an employee’s salary to the plan); Canada Pension Plan Regulations, 

C.R.C. 1978, c. 385, § 7 (same). Thus, the Plan is not, as Hawrelak contends, a mere

“savings plan” to which only he was required to contribute. Indeed, the same agency 

manual cited by Hawrelak points to the Canada Pension Plan as an example of a social 

security program that is subject to offset under the windfall elimination provision. 

See POMS GN 00307.290.C.6., https://secure.ssa.gov/poms.nsf/lnx/0200307290.

We have considered the remainder of Hawrelak’s arguments—which mostly 

involve complaints about various procedural missteps that delayed the processing of 

his case—and none provides a basis for overturning the ALJ’s decision. McKinzey v. 

Astrue, 641 F.3d 884, 892 (7th Cir. 2011) (recognizing that “administrative error may be 

harmless” and that we will not remand a case when “we are convinced that the ALJ will 

reach the same result”).

AFFIRMED.

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