United States District Court, M.D. Pennsylvania
RICHARD P. CONABOY, District Judge.
Here we consider Plaintiff's appeal of the Acting Commissioner's decision to discontinue Social Security Supplemental Income ("SSI") benefits for which Plaintiff was found eligible in 2007. (Doc. 11 at 2.) Plaintiff filed her appeal (Doc. 1) on February 6, 2015. She filed her supporting brief on May 26, 2015. (Doc. 11.) Defendant filed her opposition brief on June 26, 2015 (Doc. 12), and Plaintiff filed her reply brief on July 6, 2015 (Doc. 13). Therefore, this matter is fully briefed and ripe for disposition. For the reasons discussed below, we conclude remand is warranted.
A. Factual and Procedural History
At a hearing held on November 7, 2007, the ALJ found Plaintiff disabled for SSI purposes as of April 21, 2006. (Doc. 11 at 2.) The ALJ determined that Plaintiff met Social Security listings 8.05 and 14.02 for "Lupus." ( Id. )
On November 19, 2008, Plaintiff and her ex-husband established a trust as a result of a divorce settlement. (Doc. 12 at 3.) The trust was titled "Irrevocable Special Needs Trust" ("Trust") which was set up for Plaintiff to receive her ex-husband's pension and still meet SSI income requirements. ( Id. ) Plaintiff was the sole beneficiary, and her father, Aglae Elias, was named the trustee with her daughter, Dana Kubiak, named as the successor trustee. ( Id. ) Upon Plaintiff's death, the Trust would distribute to the Department of Public Welfare the remaining principal and accumulated income in an amount equal to the medical assistance that the Pennsylvania Department of Public Welfare had paid on Plaintiff's behalf. ( Id. )
Without objection from Plaintiff, Defendant describes the Trust as follows:
The trust provided that Plaintiff was to receive a monthly sum from her ex-husband's New York Police Department Pension Plan. The monthly sum would constitute the principal of the Trust. The trustee was required to use the trust to maintain and support Plaintiff's health, safety, welfare, education, and treatment (when not otherwise provided by a public agency or government program). The trustee was permitted to apply the income as he deemed necessary and appropriate for Plaintiff's special needs and comfort. He could apply the principal only if specifically permitted by the court and if he notified the Pennsylvania Department of Public Welfare and the Social Security Administration. The trust further provided that "no part of the principal or income shall be considered available to the Beneficiary."
(Doc. 12 at 4 (citing R. 100-02).) Defendant notes that, according to a letter from Plaintiff's attorney who drafted the trust instrument, the monthly sum was $765. (Doc. 12 at 4 n.1.)
In March 2011, the Social Security Administration field office contacted Mr. Elias and determined that Plaintiff's access to the Trust rendered it a countable resource. (Doc. 12 at 5.) Because of this, the field office sent Plaintiff a letter on April 7, 2011, stating that her income (i.e., her monthly pension and the value of food and shelter) exceeded her SSI payments as of January 2009 and, therefore, she was ineligible for benefits beginning January 2009. ( Id. ) Plaintiff testified that she did not receive a Social Security check after April 2011. (R. 332.)
Plaintiff filed a request for reconsideration on April 13, 2011. (R. 15, 96-107.) She attached a copy of the Trust instrument, a letter dated November 26, 2008, indicating that a copy of the Trust was provided to the Social Security Administration, and a letter from the Commonwealth of Pennsylvania dated January 6, 2009, stating that the Trust would not be considered a countable resource based on a review of the Trust document. (R. 97-107.)
The field office sent Plaintiff a letter on April 29, 2011, explaining that her SSI benefits had been overpaid in the amount of $18, 137 for the period of January 1, 2009, through April 1, 2011, because the agency had not been aware of all of her income, specifically her pension payments. (R. 114.)
Plaintiff filed another request for reconsideration on May 24, 2011, which was denied with the explanation it was considered a countable resource because Plaintiff had direct access to the money. (R. 96-107, 203.) On January 19, 2012, Plaintiff filed a written request for a hearing. (R. 210.)
On June 2, 2011, Plaintiff requested a waiver of overpayment stating that she was not at fault in causing the overpayment. (R. 39, 173-80.) Plaintiff submitted an affidavit from her father, the trustee, in which he attested that the only addition to the Trust was a monthly pension fund payment of approximately $590 (not including a deduction for federal withholding of $180 per month and an annual payment to the Trust of $2, 000 pursuant to the Court of Approved Domestic Relations Order) and also stated that "[s]ince the Trust was established the only expenditures from the Trust have been consistent with the terms of the Trust Agreement." (R. 51.) The field office denied the waiver request on July 13, 2012.
B. Hearing Testimony
A hearing was held before ALJ Timothy Wing on April 22, 2013, at which Plaintiff was represented by an attorney. Plaintiff and her daughter, Dana Kubiak, testified. (R. 286-87.)
Plaintiff testified that she had increased access to the account when her father became ill in 2009 and that she used the Trust only to pay an occasional doctor's bill and three regular bills: telephone, electric and insurance. (R. 19, 297, 310-11.) She stated that otherwise, she "never used the Trust to pay for anything else" but acknowledged that there was a debit card for the account. (R. 307, 309-13.) The ALJ questioned Plaintiff about bank statement transactions indicating the Trust had been used for other purposes. ( See, e.g., R. 319.) For the most part, Plaintiff provided vague responses to the ALJ's inquiries about unauthorized or questionable expenditures.
Plaintiff also testified that when her daughter became trustee, she used the Trust to pay the three bills identified and Plaintiff did not have direct access to the Trust ...