PAUL MISKEY V. KILOLO KIJAKAZI, No. 20-16597 (9th Cir. 2022)
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Plaintiff, who receives two government pensions, one from noncovered employment and one from covered employment, alleged that the Government Pension Offset (“GPO”) should not apply to his benefits. During Plaintiff’s administrative proceedings, the Social Security Administration (“SSA” or the “agency”) agreed with Plaintiff and paid him spousal benefits without applying any offset. Ultimately, though, the agency decided that the GPO should apply. The agency then temporarily withheld Plaintiff’s spousal benefits to recoup approximately $15,000 in overpayments to him, and it reduced his spousal benefits going forward. On appeal, the parties disputed whether the GPO applies to Plaintiff’s spousal benefits and if it does apply, whether the agency was entitled to recoup the overpayment.
The Ninth Circuit held that the GPO applies to Plaintiff’s spousal benefits but that a remand to the agency is necessary to determine whether SSA was entitled to recoupment. The court reasoned that under both the old and new version of Social Security regulation 20 C.F.R. Sec 404.408a, the existence of Plaintiff’s pension earned through noncovered employment triggered the GPO’s application to his spousal benefits notwithstanding his later covered employment in a job with a different pension plan. Further, the court held that the ALJ’s finding of Plaintiff’s fault for the overpayment was not supported by substantial evidence and that on remand the agency could consider whether any evidence in the record beyond that relied on by the ALJ supported the proposition that Plaintiff was at fault for the overpayment and, if so, whether recoupment would be appropriate.
Court Description: Social Security. The panel affirmed in part and reversed in part the district court’s decision remanding plaintiff’s case to the Social Security Administration for further proceedings on plaintiff’s claim that he was entitled to receive Social Security spousal benefits not reduced by the Government Pension Offset. Under Social Security Administration (“SSA”) regulations, if someone receives a government pension based on “noncovered employment”—that is, employment with compensation that was not subject to Social Security taxes—SSA will apply the Government Pension Offset (“GPO”) to reduce any spousal benefits that the person also receives. SSA will not apply the GPO to an individual’s spousal benefits, however, if that person receives a government pension based on “covered employment”—that is, employment with compensation that was subject to Social Security taxes. Plaintiff, who receives two government pensions, one from noncovered employment and one from covered employment, alleged that the GPO should not apply to his benefits because he had been covered by Social Security taxes for approximately the last nineteen and one half years of his career. The panel held that the GPO applied to plaintiff’s spousal benefits, but that a remand to the agency was needed to determine whether SSA was entitled to recoupment for MISKEY V. KIJAKAZI 3 overpayment of benefits paid without the offset. The panel held that under both the old and new version of Social Security regulation 20 C.F.R. § 404.408a, the existence of plaintiff’s pension earned through noncovered employment triggered the GPO’s application to his spousal benefits notwithstanding his later covered employment in a job with a different pension plan. The panel therefore reversed the district court’s decision with respect to the application of the GPO and held that the ALJ correctly determined that the GPO applied to plaintiff’s spousal benefits. The panel held that the ALJ’s finding of plaintiff’s fault for the overpayment was not supported by substantial evidence and that the district court did not abuse its discretion by remanding the case to the agency for further proceedings. On remand, the agency could consider whether any evidence in the record beyond that relied on by the ALJ supported the proposition that plaintiff was at fault for the overpayment and, if so, whether recoupment “would be against equity and good conscience.” 42 U.S.C. § 404(b)(1).
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