SSR 82-22: SECTION 217(a) (42 U.S.C. 417(a)) MILITARY SERVICE WAGE CREDITS -- EFFECT OF BENEFIT AWARDED BY ANOTHER FEDERAL AGENCY -- WAIVER OF RECOVERY
20 CFR 404.506, 404.507, 404.1342(c), and 404.1363
SSR 82-22
- The claimant, a Federal Government employee, was born on September 3, 1916, and applied for Old-Age Insurance Benefits (OAIB) in December 1978. His wife and child also applied for benefits on his earnings record. Although the claimant had only 20 of the 27 quarters of coverage he needed to be fully insured, he submitted evidence which showed that he had served in the active military service of the United States (U.S.) from August 12, 1942, through March 26, 1945. The wage credits that were deemed for the claimant's period of military service under section 217(a)(1) of the Social Security Act (the Act) established the additional quarters of coverage which he needed to be fully insured. Consequently, the claimant, his wife, and his child were awarded benefits effective January 1979. When the claimant subsequently retired from Federal employment, the U.S. Civil Service Commission reported that it had used his period of military service in determining that he was eligible for a civil service annuity effective April 1979. Upon reopening the prior determination, the Social Security Administration (SSA) found that the claimant, his wife, and his child were not entitled to benefits and that they had been overpaid $1,207.90 from April 1979 through October 1979. When SSA notified the claimant of its redetermination, he appealed. Held, under section 217(a)(1)(B) of the Act, wage credits were precluded for the claimant's period of military service because his civil service annuity was based in part on that period. Without those credits, the claimant was not fully insured. Because he had met the eligibility requirements for a civil service annuity in April 1979, the Social Security benefits that were paid on his earnings record from April 1979 through October 1979 constituted an erroneous payment under 20 CFR 404.1363. Further held, the claimant was at fault in causing the erroneous payment because the record shows that he understood that an overpayment would occur if his period of military service was used in determining his eligibility for a civil service annuity. Accordingly, recovery of the $1,207.90 overpayment may not be waived.
The general issue is whether the claimant is entitled to quarters of coverage based on his U.S. military service during World War (WW) II. The specific issues are whether the claimant is fully insured for OAIB and whether, he, his wife, and his child were overpaid benefits from April 1979 through October 1979.
The claimant, who was born on September 3, 1916, filed an application for OAIB on December 8, 1978, and stated that he was employed by the U.S. Army Corps of Engineers. When the claimant submitted documentary evidence which showed that he had served in the U.S. Army from August 12, 1942, to March 26, 1945, he was granted deemed wage credits for that period under section 217(a)(1) of the Act. Effective January 1979, an award of monthly benefits was approved to him, his wife, and his child. It is noted that without his military service wage credits, the claimant had only 20 of the 27 quarters of coverage he needed to be fully insured for benefits.
On January 17, 1979, the claimant executed a statement that he understood SSA could grant deemed wage credits for his period of military service in determining his entitlement to, and the amount of, his monthly benefit and that without those credits he may not be insured. He further understood that he would be overpaid if his period of military service was used by the Civil Service Commission in determining his eligibility for a civil service annuity. He agreed to notify SSA immediately if he filed for a civil service annuity.
When the claimant subsequently retired from Federal employment, the U.S. Civil Service Commission reported, on September 13, 1979, that it had used his period of military service in determining that he was eligible for a civil service annuity effective April 1979. Upon reopening the prior determination, SSA found that the claimant, his wife, and his child were not entitled to benefits and that they had been overpaid $1,207.90 from April 1979 through October 1979. When SSA notified the claimant of its redetermination on November 9,1979, he appealed.
At the hearing, the claimant testified that he had been informed by an SSA district office employee that his period of military service could be used for both civil service annuity and Social Security benefit purposes. He was unable, however, to identify that employee. Because he could not substantiate his allegation, his testimony was not credible.
Section 202(a) of the Act provides, in part, that an individual shall be entitled to OAIB if he or she is fully insured, has attained age 62, and has filed an application.
Section 204(a) of the Act provides, in part, that whenever an incorrect payment has been made, proper adjustment or recovery of the incorrect payment shall be made.
Section 204(b) of the Act and § 404.506 of Regulations No. 4 provide that in any case in which more than the correct amount of payment has been made, there shall be no adjustment of payments to, or recovery from, any person who is without fault if such adjustment or recovery would defeat the purpose of title II of the Act or would be against equity and good conscience.
Section 213(a)(2)(A) of the Act defines the term "quarter of coverage", and section 214(a) of the Act explains how many quarters of coverage a person needs to be a "fully insured individual."
Section 217 of the Act provides, in pertinent part:
- "(a)1) For purposes of determining entitlement to and the amount of any monthly benefit for amy month after August 1950 . . . payable under this title on the basis of the wages and self-employment income of any World War II veteran . . . such veteran shall be deemed to have been paid wages (in addition to the wages, if any, actually paid to him) of $160 in each month during any part of which he served in the active military or naval service of the United States during World War II. This subsection shall not be applicable . . . if
- . . . (B) a benefit . . . which is based, in whole or in part, upon the active military or naval service of such veteran during World War II is determined by any agency . . . (other than the Veteran's Administration) to be payable by it under any other law of the United States or under a system established by such agency . . ."
Section 404.507 of Regulations No. 4 provides, in pertinent part, that -- "What constitutes fault . . . on the part of the overpaid individual . . . depends upon whether the facts show that the incorrect payment to the individual . . . resulted from:
- (a) An incorrect statement made by the individual which he knew or should have known to be incorrect; or
- (b) Failure to furnish information which he knew or should have known to be material; or
- (c) With respect to the overpaid individual only, acceptance of a payment which he either knew or could have been expected to know was incorrect."
Section 404.1363 of Regulations No. 4 provides, in pertinent part, that --
- "If . . . we receive notice from another Federal agency . . . (other than the Veterans Administration) that a Federal benefit is payable to you by that agency . . . based on the veteran's World War II . . . active service, our payments to you are erroneous to the extent the payments are based on the World War II . . . wage credits. The payments are erroneous beginning with the first month you are eligible for the Federal benefit."
Under section 217(a)(1)(B) of the Act, wage credits were precluded for the claimant's period of military service because his civil service annuity was based in part on that period. Without those credits, the claimant was not insured. Because he had met the eligibility requirements for a civil service annuity in April 1979, the Social Security benefits that were paid on his earnings record from April 1979 through October 1979 constituted an erroneous payment under § 404.1363 of Regulations No. 4.
In light of his statement of January 17, 1979, it is clear that the claimant understood that his period of military service could not be used for both civil service annuity and Social Security benefit purposes. He also understood that if he was awarded Social Security benefits and later applied for a civil service annuity, he would be overpaid Social Security benefits if his period of military service was used in determining his eligibility for that annuity. He also had agreed to notify SSA when, and if, he did file for a civil service annuity. Because the claimant knew that credit for his military service could not be used in determining his entitlement to OAIB, he was at fault in causing the overpayment from April 1979 through October 1979. Consequently, recovery of the $1,207.90 overpayment may not be waived.