SSR 66-26: SECTIONS 202(a) AND 202(J)(2). -- APPLICATION FOR BENEFITS -- PROSPECTIVE EFFECTIVENESS TO ESTABLISH ENTITLEMENT AFTER REOPENING OF INITIAL DETERMINATION
THIS RULING MODIFIES SSR 64-34c, C.B. 1964, p. 24.
SSR 66-26
- Where the claimant filed an application for old-age insurance benefits in January 1957 and in March 1957 an initial determination was made entitling him to such benefits, and where the initial determination was reopened in 1964 on the basis that "fraud or similar fault" existed and a revised determination was made finding that the claimant did not attain retirement age until February 1962, and where the claimant then timely filed for a hearing, which hearing was still pending as of the date of enactment of the Social Security Amendments of 1965 (P.L. 89-97, enacted July 30, 1965), held, as of the date of enactment the Social Security Administration had not yet made a "final decision" on the claim for old-age insurance benefits for purposes of section 202(j)(2) of the Act as amended in 1965 and, under the provisions of that section, the claimant's 1957 application is effective prospectively to February 1962 when he first met all the requirements for entitlement to old-age insurance benefits.
On January 28, 1957, R filed application for old-age insurance benefits under the provisions of section 202(a) of the Social Security Act. Under the requirements of that section as then in effect, in addition to having an insured status and filing an application, a man must have attained age 65 to become entitled to such benefits. On his application, R stated he was born on April 17, 1890, and in support of his statement he submitted a Certificate in Lieu of Lost or Destroyed Discharge Certificate issued by the U.S. War Department in 1944. Based on the evidence submitted, it was determined on March 12, 1957, that R had attained age 65 and he was found entitled to old-age insurance benefits effective January 1956.
Benefits were paid to R from January 1956 through April 1964. In May 1964, on the basis of newly acquired evidence, it was established that the Certificate in Lieu of Lost or Destroyed Discharge Certificate did not pertain to R but to someone else with the same name, and that R's correct date of birth was February 12, 1897. Based upon a determination that "fraud or similar fault" existed, the initial determination on R's claim made on March 12, 1957, was reopened under the provisions of § 404.957(c) of Social Security Administration Regulations No. 4 (20 CFR 404.957(c)). (For illustration of "fraud or similar fault" as a basis for reopening a final determination, see SSR 64-2, C.B. 1964, p. 91.) R filed a second application for old-age insurance benefits on August 24, 1964.
A revised determination, notice of which was mailed R on December 30, 1964, found that R attained age 65 in February 1962, that he had not met all the requirements for entitlement to old-age insurance benefits when he filed application on January 28, 1957, and, accordingly, the benefits paid to him on the basis of that application were incorrect. It was further found that, based on R's second application, he was entitled to old-age insurance benefits effective August 1963 (i.e., effective with the twelfth month before the month in which the second application was filed), but that benefits paid for the months January 1956 through July 1963 constituted an overpayment recovery of which could not waived under section 204(b) of the Social Security Act because R had not been "without fault" in the circumstances giving rise to the overpayment. (For explanation of the requirement in section 204(b) that an overpaid individual be "without fault," see SSR 64-2, C.B. 1964, p. 91).
On January 22, 1965, R appealed from this revised determination by requesting a hearing, contending that he should be found entitled to old-age insurance benefits effective no later than February 1962, the month in which it had been determined he attained age 65. (R stated that he did not wish to receive reduced benefits for months before the month in which he attained age 65.) A hearing was held in April 1965, but as of July 30, 1965, the date of enactment of the Social Security Amendments of 1965 (P.L. 89-97), the hearing examiner had not yet rendered a decision.
Section 202(j)(1) of the Act provides, in pertinent part, as follows:
- "An individual who would have been entitled to a benefit under subsection (a) * * * for any month after August 1950 had he filed application therefor prior to the end of such month shall be entitled to such benefit for such month if he files application therefor prior to the end of the twelfth month immediately succeeding such month * * *"
Accordingly, on the basis of the second application filed in August 1964, R could not have become entitled to old-age insurance benefits for any month prior to August 1963. (The provisions of section 202(j)(1) of the Act, as here pertinent, were not changed by the Social Security Amendments of 1965.)
Section 202(j)(2) of the Act, as in effect prior to the Social Security Amendments of 1965, provided that an application has an effective prospective life of only three months:
- "No application for any benefit under this section for any month after August 1950 which is filed prior to three months before the first month for which the applicant becomes entitled to such benefit shall be accepted as an application for the purposes of this section; and any application filed within such three months' period shall be deemed to have been filed in such first month."
When R attained age 65 in February 1962 and thus met the age requirement of section 202(a) of the Act, he no longer met the application requirement of section 202(a) since the application he filed in January 1957 was no longer an effective application. He was not entitled to old-age insurance benefits, therefore, on the basis of that application under the provisions of the Act in effect prior to the Social Security Amendments of 1965.
However, section 328(a) of the Social Security Amendments of 1965 (P.L. 89-97) amended section 202(j)(2) to provide that the effective life of an application may be extended prospectively to the time a "final decision" is made on the application. Section 202(j)(2) now reads:
- "An application for any monthly benefits under this section filed before the first month in which the applicant satisfies the requirements for such benefits shall be deemed a valid application only if the applicant satisfies the requirements for such benefits before the Secretary makes a final decision on the application. If upon final decision by the Secretary, or decision upon judicial review thereof, such applicant is found to satisfy such requirements, the application shall be deemed to have been filed in such first month."
Section 328(d) of P.L. 89-97 provides, as here pertinent, that the foregoing provisions "apply with respect to * * * (2) applications as to which the Secretary has not made a final decision before the date of enactment of this Act [P.L. 89-97, enacted July 30, 1965] * * *."
The issue is whether the provisions of section 202(j)(2) of the Act, as amended in 1965, apply to the application for old-age insurance benefits filed by R in January 1957. This depends on whether a "final decision" had been made on R's 1957 application before July 30, 1965.
Social Security Administration Regulations No. 4, §§ 404.905-404.955 (20 CFR 404.905-404.955), provide for an administrative appeals process under which a dissatisfied claimant may successively request reconsideration, hearing, and Appeals Council review of the determination on his claim; however, each review in the administrative appeals process must be requested within specified time limits. The regulations also provide that once a claimant has exhausted these administrative remedies with respect to an initial determination, or the time within which to do so has expired, the determination becomes final and binding on the parties to it. Sections 404.956-404.967 of Regulations No. 4 (20 CFR 404.956-404.967) describe the circumstances under which a determination that has become "final" may be reopened.
Under the provisions of § 404.908 of Regulations No. 4, an initial determination on an application is final and binding on the parties to such determination, and thus becomes the "final decision" of the Secretary, unless a request for reconsideration is filed with the Social Security Administration within 6 months from the date of mailing notice of the initial determination. Therefore, since R never requested a reconsideration of the initial determination on his 1957 application, the initial determination on that application made in March 1957 became the "final decision" of the Secretary. However, the determination of March 1957 was reopened and revised 7 years later, in 1964, under the provisions of § 404.957(c) of the regulations (20 CFR 404.957(c)). The question thus presented is whether the March 1957 determination should be considered a "final decision" for purposes of section 202(j)(2) of the Act, as amended, when it was subsequently reopened and revised.
The amendment of section 202(j)(2) made by section 328 of P.L. 89-97 has a clearly remedial purpose. That purpose is to provide relief to the claimant who, although he did not meet the eligibility requirements for a particular benefit at the moment he first filed application, did meet such requirements prior to the time the Social Security Administration had finally disposed of his claim. (See Senate Report 404, Part 1, 89th Cong., 1st Sess., pp. 120-121). To hold that the term "final decision," as used in section 202(j)(2), means an initial determination on a claim with respect to which a claimant has exhausted his administrative remedies i.e., reconsideration, hearing, and Appeals Council review, or the time within which to do so has expired, regardless of subsequent actions with respect to that claim, would be to frustrate in part the purpose of the amendment. Moreover, section 202(j)(2) is not part of a statute of limitations as is, for example, section 205(c)(5)(A) of the Act in which the term "final decision" also occurs. In contrast with the necessarily restrictive purposes of the statute of limitations provisions of the Act, the purpose of section 202(j)(2) as amended is not to restrict but to liberalize and preserve a claimant's eligibility for benefits. It follows that an initial determination on a claim is not considered a "final decision" for purposes of section 202(j)(2), even though the claimant has exhausted his administrative remedies with respect to such determination or the time within which to do so has expired, if it is reopened under the above-cited provisions of Regulations No. 4.
As to the instant case, although a favorable determination of entitlement was made by the Social Security Administration on R's 1957 application, this did not conclude the Administration's actions with respect to that claim. Rather, the determination of entitlement was later reopened, and since it was found to be erroneous, was revised under the provisions of Regulations No. 4, § 404.957(c). An additional consideration is that as of the date of enactment of P.L. 89-97 (July 30, 1965), R was pursuing his administrative remedies with respect to this action.
Under these circumstances, it is held that, for purposes of section 202(j)(2) of the Act, as amended, a "final decision" on R's 1957 application for old-age insurance benefits had not been made as of the date of enactment of P.L. 89-97, that the provisions of section 202(j)(2), as amended, are applicable to R's 1957 application, and that R's 1957 application is deemed to have been filed in February 1962, the first month for which he satisfied all the requirements for an old-age insurance benefit. Accordingly, R is entitled to old-age insurance benefits under the provisions of section 202(a) of the Act, effective February 1962.