Court Opinion

ID: 8483135
Source: CourtListenerOpinion
Date Created: 2022-11-10 21:00:49.375629+00
Date Added: 2024-06-11T16:49:44.240994
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NONPRECEDENTIAL DISPOSITION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 November 9, 2022 *
                              Decided November 10, 2022

                                          Before

                       FRANK H. EASTERBROOK, Circuit Judge

                       DAVID F. HAMILTON, Circuit Judge

                       THOMAS L. KIRSCH II, Circuit Judge

No. 22-1441

REBECCA I. HARP,                               Appeal from the United States District
     Plaintiff-Appellant,                      Court for the Eastern District of
                                               Wisconsin.
      v.
                                               No. 20-C-1743
KILOLO KIJAKAZI,
Acting Commissioner of Social Security,        Lynn Adelman,
      Defendant-Appellee.                      Judge.

                                      ORDER

       The Social Security Administration reopened Rebecca Harp’s application for
disability insurance benefits based on evidence that she had concealed income, and
relying on that evidence, it revoked her benefits. Harp argues that the agency wrongly
reopened her case and that the money she concealed was not from substantial gainful

      *
         We have agreed to decide the case without oral argument because the briefs and
record adequately present the facts and legal arguments, and oral argument would not
significantly aid the court. FED. R. APP. P. 34(a)(2)(C).
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activity and thus did not affect her eligibility for benefits. Because substantial evidence
supports the agency’s contrary findings, we affirm.

        Harp’s adult daughter, Nashawn, is disabled and requires extensive care. State
programs in Wisconsin will pay caregivers, including family members, for at-home
care. In 2014, Harp selected herself and her other daughter as Nashawn’s caregivers and
received money through a state program. After a payment issue arose with that
program, Harp enrolled Nashawn in a different program and again selected herself as a
caregiver. That program paid family members for services that “exceed the typical care-
giving/support responsibility” of family members, such as toileting, bathing, assisting
with complete transfers, and other “unique services.” Case managers regularly assessed
whether payments to Harp were proper under this standard. Harp earned, on average,
thousands of dollars per month from both programs in 2014 and 2015.

       While Harp was receiving this money from the state programs, she applied for
federal disability insurance benefits based on a spine injury. Her income and work
history are relevant to her eligibility for benefits. See 20 C.F.R. §§ 404.1572, 404.1574(a).
At her hearing before an administrative law judge, Harp did not disclose receiving any
money from these state programs; nor did she list her caregiving work in her
“Claimant’s Work Background,” a form that she signed with her application. Unaware
of these omissions, the ALJ ruled in 2015 that she was disabled and eligible for benefits.
She began receiving benefits shortly afterward.

       A few years later, the Social Security Administration learned of Harp’s income
from the state programs and halted her benefits. Harp received a letter from the agency
in April 2019 warning that she would no longer receive disability benefits. The agency
explained that it was reopening the disability ruling based on evidence (pay stubs from
the state programs listing Harp as an “employee” and itemizing her “gross wages”) that
Harp had wrongly concealed earnings. Her benefits temporarily resumed, though, after
she requested reconsideration. A month before the hearing on the reopened case, the
agency wrote that she would receive disability payments that she was “due.”

       The hearing came next. Harp swore that she never performed caregiving tasks
for Nashawn and could not perform certain tasks (like picking Nashawn up) because of
her spinal injury. When asked why the state paid her thousands of dollars monthly, she
admitted that it paid her for the overnight hours “monitoring” Nashawn and changing
her diapers when no other caregiver was present. She conceded that, if she did not do
this monitoring, the state would have paid another caregiver for it. But, Harp insisted,
she did not need to disclose the payments because they were not “wages” for work but
No. 22-1441                                                                           Page 3

a “stipend” for “a home”; the state programs did not report it to the Social Security
Administration; and an IRS agent told her that she did not need to pay taxes on it.
Finally, Nashawn’s daytime caregiver testified that she did not observe Harp caring for
her daughter while that caregiver was present.

        The ALJ ruled against Harp, concluding that she had engaged in substantial
gainful activity and earned, on average, thousands of dollars monthly for caregiving
services. 20 C.F.R. §§ 404.1572, 404.1574(a). This activity and the income it generated
meant that she was not disabled and was ineligible for disability insurance benefits.
20 C.F.R. § 404.1520(b). See SSA, Substantial Gainful Activity, available at
https://www.ssa.gov/oact/cola/sga.html (listing the disqualifying amounts as earnings
between $1,070 and $1,130 per month from 2014 to 2016) (last accessed October 7, 2022).
The Appeals Council denied Harp’s request for review, and the district court upheld
the ALJ’s order. We review the district court’s ruling de novo, Jarnutowski v. Kijakazi,
48 F.4th 769, 773 (7th Cir. 2022), and uphold the ALJ’s decision if it is supported by
substantial evidence. 42 U.S.C. § 405(g); Biestek v. Berryhill, 139 S. Ct. 1148, 1152 (2019).

        On appeal, Harp takes aim at the decision to reopen her case. In her view, the
letter that she received a month before the hearing, promising that she would receive
resumed benefits that she was due, was the “final” decision of the agency. But the letter
does not purport to be final, and it did not cancel the upcoming hearing on her
reopened case to decide what benefits she was due. Moreover, the standard for
“reopening” was met here. Determinations about benefits may be “reopened” “[a]t any
time if—(1) It was obtained by fraud or similar fault.” 20 C.F.R. § 404.988(c)(1). The
letter notifying Harp of the agency’s decision to reopen her case was supported by
ample evidence of “fraud or similar fault.” The evidence included the pay stubs from
state programs listing Harp as an “employee” and the “wages” they paid her at the very
time she claimed that she was not working. In her reply brief, Harp argues for the first
time that these pay statements are “fabricated.” But this argument is unsubstantiated,
and she waived it because she did not raise it before the district court or in her opening
brief. See Wonsey v. City of Chicago, 940 F.3d 394, 398 (7th Cir. 2019).

        Harp next reprises her contention that the ALJ wrongly decided to cancel her
benefits because, in her view, the income she received from the state care programs was
not for substantial gainful activity. She revisits the reasons she gave to the ALJ, but they
are all unavailing. First, she contends that the income did not disqualify her from
benefits because it was not taxable. But the regulations describe substantial gainful
No. 22-1441                                                                          Page 4

activity as “work that is usually done for pay or profit” and make no distinction
between taxable income and non-taxable income. 20 C.F.R. § 404.1572(b).

       Second, she argues that her assertion that her spinal injury prevented her from
caring for her daughter, and the daytime caregiver’s testimony, support Harp’s view
that she did no caregiving. But the ALJ was not required to believe Harp’s assertion,
and other evidence amply refuted it. See Stepp v. Colvin, 795 F.3d 711, 720 (7th Cir. 2015).
For instance, the ALJ permissibly relied on Harp’s admission that when she
“monitored” Nashawn all night, including changing her diapers, she performed tasks
for which the state would otherwise pay non-family members. And the state programs,
which paid family members only for caregiving work not normally provided by
families, regularly assessed whether they paid Harp according to those restrictions. As
for the other caregiver’s testimony that she did not observe Harp caring for Nashawn,
the ALJ reasonably discounted it because Harp was paid for the hours when the
daytime caregiver was not present and could not observe her.

       Finally, Harp attempts to characterize her earnings as a “stipend” for giving her
daughter a place to live—in other words, the state paid for Nashawn’s rent. But the
record contains substantial evidence that the state programs paid recipients only for
services, not for housing.

                                                                               AFFIRMED