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Heppner v. Califano

February 15, 1979

BESSIE HEPPNER, APPELLANT,
v.
JOSEPH A. CALIFANO, JR., SECRETARY OF THE UNITED STATES DEPARTMENT OF HEALTH, EDUCATION AND WELFARE, APPELLEE.



Present: Hon. James L. Oakes, Hon. Ellsworth A. Van Graafeiland, Circuit Judges; Hon. Charles L. Brieant, District Judge.

Order

Appeal from an order of the United States District Court for the Western District of New York, Harold P. Burke, Judge, granting defendant's motion for summary judgment on the ground that substantial evidence supports the decision of the Secretary of Health, Education and Welfare (Secretary) that due to excess resources plaintiff is not entitled to Supplementary Security Income (SSI) benefits.

Ordered, that the order of the district court be vacated and the cause remanded to the district court with instructions to enter an order in favor of plaintiff-appellant restoring her eligibility for SSI, enjoining the Secretary for a period of twelve months from the date of this order from terminating her eligibility on the basis of excess resources derived from SSI benefits, but permitting the Secretary to terminate her eligibility on that basis on or after the date twelve months from the date of this order.

The district court was correct as a matter of law in ruling that appellant is ineligible for SSI benefits because her savings exceed the $1,500 resource limit provided by 42 U.S.C. § 1382(a)(1)(B), even though these savings were derived entirely from the benefits. Although it is not a particularly appealing policy to penalize a recipient for saving rather than spending, the statute clearly has this result; and we cannot in good faith imply an exception to the explicit statutory language when Congress has clearly provided other exceptions but not this one, 42 U.S.C. § 1382b(a). Only the Congress or, perhaps, the Secretary, under 42 U.S.C. § 1382b, can create such an exception.*fn*

We nevertheless decline simply to affirm the district court's order. Appellant reasonably believed that saving some of her SSI benefits was lawful; indeed in preparation for appellant's release after forty years in the Newark Developmental Center and its group homes, appellant's social worker carefully instructed her to live frugally and to save money for the future. She was "astounded" when she discovered, in late May 1976, that she had allegedly violated the statute. Indeed, the Administrative Law Judge found that she was not in violation. The June 10, 1977, decision of the Appeals Council of the Social Security Administration, approved by the District Court, would terminate appellant's eligibility as of May 1, 1976. This retroactive termination seems to circumvent 20 C.F.R. § 416.1335, which provides for termination only "when 12 calendar months have elapsed after suspension for ineligibility if the beneficiary has not reestablished eligibility for benefits." This regulation, when read together with 20 C.F.R. § 416.1321(b), contemplates that a recipient will be allowed twelve months to reestablish her eligibility and that she need not make a completely new application during that period. But appellant was not afforded the protection of these regulations, for she was terminated retroactively, not merely suspended, when the Appeals Council issued its decision. Although it can be argued that she was suspended administratively as of May 25, 1976, the date she first received notice that her payments would be terminated, this action was not administratively final until the date of the Appeals Council ruling. That ruling did not purport to terminate her eligibility twelve months thence.

Fairness demands that appellant now have the opportunity to reestablish her eligibility for SSI benefits without having to reapply. Accordingly we will permit appellant twelve months from the date of this order to bring her available resources within the statutory limits by expending her excess resources, if any remain. In light of the Secretary's failure to inform appellant of her suspension twelve months before the date of termination from eligibility, and in view of appellant's obvious disadvantage from saving some of her benefits, we believe that this result is the only equitable one. Meanwhile, until she reestablishes eligibility the suspension of payments to her may remain in effect. We note that although the Administrative Law Judge also ...


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