Opinion ID: 466412
Heading Depth: 1
Heading Rank: 3

Heading: application of the regulations to ware's situation

Text: 11 A. For the definition of support and maintenance, we turn to the SSA's regulations. In-kind support and maintenance is any food, shelter, or clothing which is given to the beneficiary, calculated at current market value unless otherwise specified. 20 C.F.R. Sec. 416.1130 (1984). The record reveals no substantial evidence that Ware was receiving in-kind support and maintenance, as defined, from Mack or any other person. Mack testified strenuously that she did not give Ware any food, and had no money with which to buy food for Ware, other than Ware's benefits. She also maintained that Ware purchased her own health food with the $52 per month in food stamps that she received, and that the two women stored, prepared, and ate their food separately from each other. There is also nothing in the record to suggest that Mack or any other person gave Ware clothing; again, Mack was receiving no independent income with which she could pay for Ware's clothing. The inquiry here must focus, as it did before the ALJ and the district court, on shelter. 12 The ALJ and district court opinions are confused and confusing on the question of whether Mack provided Ware with shelter. Shelter, according to the regulations, includes room, rent, mortgage payments, real property taxes, heating fuel, gas, electricity, water, sewerage, and garbage collection services. Sec. 416.1130(b). The opinions concluded that the amount of rent Mack charged Ware was not the amount charged under a business arrangement, id., and that therefore Ware was receiving in-kind support and maintenance. The ALJ and the district court compared Mack's two estimates of the fair market monthly rental and utilities cost of Ware's quarters ($200 or $270) against the amount that Ware allegedly contributed toward rent and utilities ($170). They reached the seemingly inescapable conclusion that Ware was not paying full market value for her rent, and so was receiving shelter from Mack. 13 This conclusion is plainly erroneous. The record evidence supports only one conclusion: Ware through her benefit check was providing all of the rent money, which Mack then paid to the owner of the building. In light of the undisputed facts on the record, findings that Mack provided in-kind shelter to Ware are clearly erroneous and indeed baffling. Mack may hold the pursestrings, but Ware and only Ware fills the purse. Mack is unemployed and has no income of her own. As far as the record shows, the only money Mack receives each month is Ware's benefits check. Mack pays the rent for the house in which she and Ware live, but the nearly inescapable conclusion is that she pays this rent with Ware's money, not her own. Thus it is logically impossible to conclude that Mack is providing Ware with shelter. We reject the bizarre assumption that Mack's mere handling of Ware's money somehow transforms it into Mack's own money; it follows that Mack's payment of the monthly rent with Ware's money cannot possibly be convoluted into a determination that Mack provided Ware with in-kind shelter. Further development of the record may disclose some hidden source of income for the two women. As it stands, however, the record compels the conclusion that Mack did not provide Ware with shelter or any other support and maintenance. 14 B. Since a showing of some support or maintenance is a necessary condition for reducing the beneficiary's monthly benefit, the existing record strongly suggests that Ware's monthly benefit was incorrectly reduced and must be restored. But in any event, receipt of support and maintenance, even if established, is not a sufficient condition for reducing benefits. For the present purpose only--to guide the ALJ in proceedings on remand--we make the heroic assumption that further proceedings reveal that Mack was in fact providing some kind of support and maintenance to Ware. That fact, even if established, would not necessarily reduce Ware's benefits. The regulations clearly require a further finding that the beneficiary lives in the household of another. 15 The evidence available strongly suggests, under the definitions found in the regulations, that Ware lives in her own household. A person lives in her own household if she, inter alia, has an ownership or life estate interest in the home, is liable to the landlord for payment of any part of the rent, or pays at least a pro rata share of household and operating expenses. Sec. 416.1132(c)(1)-(5). The pro rata share exception is the one we focus on here. It dictates that a beneficiary who is sharing a household with another person is still deemed to live in her own household, for the purpose of avoiding benefit reductions, if she contributes pro rata to the household's combined total expenses. The SSA's Special Determination found that the two women were pooling expenses incurred in the ordinary operation of a household, Special Determination at 3, but neither the ALJ nor the district court proceeded to examine whether Ware was paying a pro rata share of these expenses. 16 Applying the pro rata share exception to the evidence, we believe that Ware should be deemed to live in her own household. The combined household expenses of Mack and Ware are the total monthly expenditures for food, rent, mortgage, property taxes, heating fuel, gas, electricity, water, sewerage, and garbage collection services, averaged over the past twelve months. Sec. 416.1133(c). A pro rata share in a household of two people is half of the total household expenses. Sec. 416.1133(b). Applying these yardsticks to the record strongly suggests that Ware pays at least her pro rata share of the household expenses, if not substantially more. We are hindered in reaching this determination by Mack's uncooperativeness; she told the SSA investigator that the various household expenses were her business and hers alone, and that SSA had no right to force her to divulge this information. Mack's uncooperativeness cannot provide the basis for reducing Ware's allowance. Since the record shows that Ware pays all the expenses, a fortiori she pays a pro rata share. Thus the case must be remanded for a determination of whether Ware is living in her own household. The ALJ can encourage Mack's cooperation by explaining that her testimony and evidence about household expenses is likely to help Ware's cause rather than to defeat it. 17 If Ware is living in her own household, or alternatively is not receiving both food and shelter in Mack's household, the SSA is required to continue its inquiry by applying the presumed value rule to the beneficiary. If the beneficiary operates her own household, or alternatively is living in the household of another person who is not providing both food and shelter, the SSA's regulations presume that the level of support and maintenance the beneficiary receives is one-third of her benefit level, thus allowing a corresponding reduction of her benefits. Sec. 416.1140. However, when the presumed value test is used, the regulations require that the beneficiary be afforded opportunity to rebut the presumption and to show that the current market value of any food, shelter, or clothing she receives, minus any payments she makes for them, is less than their presumed value of one-third of her benefits. Sec. 416.1140(a)(2)(i). The maximum amount that benefits may be reduced is the presumed value. Sec. 416.1140(b)(1). 18 If the presumed value test does not apply, the one-third reduction rule may apply. There is a categorical one-third reduction in benefits if the beneficiary is living in the household of another person who is providing support and maintenance to the beneficiary. 42 U.S.C. Sec. 1382a(a)(2)(A)(i), implemented by 20 C.F.R. Sec. 416.1131(a) & (b). The regulations define the support and maintenance as the receipt of both food and shelter from someone who is living in the same household as the beneficiary. 20 C.F.R. Sec. 416.1131(a). We are extremely doubtful that the requirements of this one-third reduction rule are satisfied here; we have found no evidence that Mack provides Ware with even one cent of support and maintenance. See pp. 421-423 supra.