[Federal Register Volume 62, Number 8 (Monday, January 13, 1997)]
[Notices]
[Pages 1792-1794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-667]


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SOCIAL SECURITY ADMINISTRATION
[Social Security Acquiescence Ruling 97-1(1)]


Parisi By Cooney v. Chater; Reduction of Benefits Under the 
Family Maximum In Cases Involving Dual Entitlement--Title II of the 
Social Security Act

AGENCY: Social Security Administration.

ACTION: Notice of Social Security Acquiescence Ruling.

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SUMMARY: In accordance with 20 CFR 422.406(b)(2), the Commissioner of 
Social Security gives notice of Social Security Acquiescence Ruling 97-
1(1).

EFFECTIVE DATE: January 13, 1997.

FOR FURTHER INFORMATION CONTACT:
Gary Sargent, Litigation Staff, Social Security Administration, 6401 
Security Boulevard, Baltimore, MD 21235, (410) 965-1695.

SUPPLEMENTARY INFORMATION: Although not required to do so pursuant to 5 
U.S.C. 552(a)(1) and (a)(2), we are publishing this Social Security 
Acquiescence Ruling in accordance with 20 CFR 422.406(b)(2).
    A Social Security Acquiescence Ruling explains how we will apply a 
holding in a decision of a United States Court of Appeals that we 
determine conflicts with our interpretation of a provision of the 
Social Security Act (the Act) or regulations when the Government has 
decided not to seek

[[Page 1793]]

further review of that decision or is unsuccessful on further review.
    We will apply the holding of the Court of Appeals decision as 
explained in this Social Security Acquiescence Ruling to claims at all 
levels of administrative adjudication within the First Circuit. This 
Social Security Acquiescence Ruling will apply to all determinations 
and decisions made on or after January 13, 1997. If we made a 
determination or decision on your application for benefits between 
November 8, 1995, the date of the Court of Appeals decision, and 
January 13, 1997, the effective date of this Social Security 
Acquiescence Ruling, you may request application of the Ruling to your 
claim if you first demonstrate, pursuant to 20 CFR 404.985(b), that 
application of the Ruling could change our prior determination or 
decision.
    If this Social Security Acquiescence Ruling is later rescinded as 
obsolete, we will publish a notice in the Federal Register to that 
effect as provided for in 20 CFR 404.985(e). If we decide to relitigate 
the issue covered by this Social Security Acquiescence Ruling as 
provided for by 20 CFR 404.985(c), we will publish a notice in the 
Federal Register stating that we will apply our interpretation of the 
Act or regulations involved and explaining why we have decided to 
relitigate the issue.

(Catalog of Federal Domestic Assistance Programs Nos. 96.001 Social 
Security - Disability Insurance; 96.002 Social Security - Retirement 
Insurance; 96.004 Social Security - Survivors Insurance.)

    Dated: September 19, 1996.
Shirley S. Chater,
Commissioner of Social Security.

Acquiescence Ruling 97-1(1)

    Parisi By Cooney v. Chater, 69 F.3d 614 (1st Cir. 1995)--Reduction 
of Benefits Under the Family Maximum In Cases Involving Dual 
Entitlement--Title II of the Social Security Act.
    Issue: Whether, in determining the amount of benefit reduction 
under the maximum family benefits provision in section 203(a) of the 
Social Security Act (the Act) in cases where a beneficiary is entitled 
to benefits on more than one earnings record, only those monthly 
benefits payable on the worker's earnings record after application of 
the simultaneous benefit provisions are included in calculating the 
total monthly benefits payable on that record.
    Statute/Regulation/Ruling Citation: Sections 202(k)(3)(A), 202(r) 
and 203(a) of the Social Security Act (42 U.S.C. 402(k)(3)(A), 402(r) 
and 403(a)); 20 CFR 404.304(d), 404.403, 404.404, 404.407(a), 404.623; 
Social Security Ruling 62-7.
    Circuit: First (Maine, New Hampshire, Massachusetts, Rhode Island, 
Puerto Rico).
    Parisi By Cooney v. Chater, 69 F.3d 614 (1st Cir. 1995).
    Applicability of Ruling: This Ruling applies to determinations or 
decisions at all administrative levels (i.e., initial, reconsideration, 
Administrative Law Judge (ALJ) hearing or Appeals Council).
    Description of Case: Anthony Parisi, the worker, became disabled in 
February 1988. He and Anthony Parisi II, his dependent child and the 
plaintiff in this case, began receiving Social Security benefits on 
Anthony Parisi's earnings record. In 1991, Adriana Parisi, the worker's 
spouse, became entitled to retirement benefits (old-age benefits) based 
on her own earnings record. Under section 202(r) of the Act, Adriana 
was deemed also to have applied for and become entitled to wife's 
benefits based on the worker's earnings record. The Social Security 
Administration (SSA) determined under section 202(k)(3)(A) of the Act 
that because the monthly retirement benefits that Adriana was entitled 
to receive on her own record exceeded the amount of her monthly wife's 
benefits on Anthony Parisi's earnings record, she could only receive 
payment for the retirement benefits payable on her own earnings record.
    SSA counted the wife's benefits to which Adriana was entitled, but 
which were not actually paid to her, toward the monthly maximum amount 
of benefits payable on Anthony Parisi's earnings record under section 
203(a) of the Act (the family maximum). Because the total monthly 
amount of Anthony's disability benefits, the plaintiff's child's 
benefits, and Adriana's wife's benefits exceeded the monthly family 
maximum limit, SSA reduced the amount of the plaintiff's and the wife's 
monthly benefits.
    The plaintiff's request for reconsideration of the benefit 
reduction was denied, and he requested a hearing before an ALJ. The ALJ 
found that Adriana's wife's benefits should not be counted toward the 
family maximum. However, the Appeals Council reversed the ALJ's 
decision and the plaintiff appealed to the district court. The district 
court found that the family maximum limit on monthly benefits was meant 
to include only ``effective entitlements'' that result in actual 
payment of benefits. Because Adriana's entitlement to wife's benefits 
was only ``conditional'' upon her not being entitled to a greater 
amount of monthly benefits on her own earnings record, the district 
court concluded that Adriana's wife's benefits should not be counted 
toward the family maximum. SSA appealed and the United States Court of 
Appeals for the First Circuit, while offering somewhat different 
reasoning, found that the district court correctly reversed the Appeals 
Council's decision.
    Holding: After reviewing the statutory language in sections 203(a) 
and 202(k)(3)(A) of the Act, the legislative history, SSA's regulations 
and policy considerations, the Court of Appeals held that ``Adriana's 
non-payable spousal benefits d[id] not count toward the section 
[2]03(a) `family maximum' . . . [because] section [2]03(a) operates to 
limit the total amount of benefits actually payable on a single 
worker's record, not the amount of entitlements theoretically 
available.'' The court further held that because Adriana's deemed 
entitlement to wife's benefits resulted in ``zero payable benefits'' 
under section 202(k)(3)(A) of the Act, none of her benefits should be 
included in the family maximum computation required under section 
203(a).
    Without reviewing SSA's definition of ``entitlement,'' the court 
reasoned that, if SSA was correct in arguing that section 203(a) of the 
Act places a limit on entitlements, it would be contradictory and 
impossible to enforce compliance with the family maximum cap by 
reducing payable benefits. The court held that section 203(a) of the 
Act requires SSA to consider the actual amount of benefits payable 
under the relevant benefits provisions (read as a whole), not purely 
theoretical entitlements, in calculating the total monthly benefits 
payable on the worker's earnings record. The court noted that its 
conclusion did not undermine SSA's definition of ``entitlement'' and 
that Adriana had entitlement, in an abstract way, to wife's benefits 
under section 202(b)(1) of the Act.<SUP>1
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    \1\ The First Circuit's reasoning differed from the district 
court's analysis that distinguished between ``effective'' and 
``conditional'' entitlements. The court held that this distinction 
had ``no roots in the statutory language.''
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    The court also held that the statutory language requires that 
monthly benefits be reduced under the family maximum only as much ``as 
necessary'' to enforce compliance and that, because the reduction in 
Parisi's case depended on the calculation of Adriana's wife's benefits, 
which amounted to zero due to her simultaneous entitlement to a higher 
benefit on her own earnings record, a reduction was not necessary. 
Accordingly, the court concluded that

[[Page 1794]]

the total amount of benefits payable on the worker's record did not 
exceed the family maximum and that Anthony's child's benefits should 
not be reduced.

Statement As To How Parisi Differs From Social Security Policy

    Section 203(a) of the Act establishes a limit, derived from the 
worker's primary insurance amount, on the total monthly benefits to 
which dependents or survivors may be entitled on the basis of one 
worker's earnings record (the family maximum). Under SSA's regulations 
implementing section 203(a) of the Act (20 CFR 404.403 and 404.404), 
the benefits of each claimant entitled on a worker's earnings record 
are reduced proportionately so that the total benefits of those 
entitled on the record in one month do not exceed the family maximum. 
In calculating total monthly benefits, SSA includes all benefits of the 
claimants who are entitled on the worker's record without considering 
whether the benefits are actually due or payable.
    The Parisi court held that, when computing a reduction under the 
family maximum pursuant to section 203(a) of the Act, SSA should not 
include the monthly benefit that would otherwise be payable to the 
spouse if payment of that spouse's benefit is precluded by section 
202(k)(3)(A) of the Act due to the spouse's simultaneous entitlement to 
a higher benefit on the spouse's own earnings record.

Explanation of How SSA Will Apply The Parisi Decision Within The 
Circuit

    This Ruling applies only to cases involving claimants whose 
benefits are reduced because of the family maximum and who reside in 
Maine, New Hampshire, Massachusetts, Rhode Island or Puerto Rico at the 
time of the determination or decision at any administrative level, 
i.e., initial, reconsideration, ALJ hearing or Appeals Council.
    When the total benefits due or payable for any month on the 
earnings record of a worker exceed the maximum amount under section 
203(a) of the Act (the family maximum applies) and a person entitled on 
the worker's earnings record is simultaneously entitled to benefits on 
another earnings record, SSA will consider only the amount of monthly 
dependent's or survivor's benefits actually due or payable to the 
simultaneously-entitled person when determining the amount of the 
benefit reduction because of the family maximum. Adjudicators will 
continue to apply SSA's other policies for applying and calculating the 
family maximum reduction.
[FR Doc. 97-667 Filed 1-10-97; 8:45 am]
BILLING CODE 4190-29-F