Court Opinion

ID: 3217071
Source: CourtListenerOpinion
Date Created: 2016-06-24 22:01:01.568067+00
Date Added: 2024-06-11T07:39:42.664122
License: Public Domain

NONPRECEDENTIAL DISPOSITION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

               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,                            Appeal from the United States District
    Plaintiff-Appellant,                       Court for the Central District of Illinois.

      v.                                       No. 13-3026

CAROLYN W. COLVIN,                             Sue E. Myerscough,
Acting Commissioner of Social Security,        Judge.
      Defendant-Appellee.

                                      ORDER

       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).
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
No. 15-3253                                                                         Page 3

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
No. 15-3253                                                                      Page 4

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.