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Shawn G. v. Berryhill

United States District Court, S.D. Indiana, Indianapolis Division

August 3, 2018

SHAWN G., Plaintiff,



          Hon. Jane Magnus-Stinson, United States District Court Chief Judge

         Plaintiff Shawn G. was a participant in the “Ticket to Work” program established by Congress and administered by the Social Security Administration (“SSA”) to help people receiving disability benefits find work. Participants may take advantage of the regulatory trial work period to collect disability insurance benefits (“DIB”) and work earnings for a set time period. See generally Tumminaro v. Astrue, 671 F.3d 629, 633-34 (7th Cir. 2011). Eventually, however, a participant may no longer collect disability benefits in addition to a paycheck. In June 2011, the SSA notified Shawn G. that he had received benefits to which he was not entitled since April 2009, resulting in an overpayment of $32, 605.70. Shawn G. sought a waiver of the overpayment, claiming that the overpayment was not his fault and that repayment would cause him financial hardship. After the SSA denied his waiver request, Shawn G. requested and received a hearing before Administrative Law Judge Mario Silva (“the ALJ”). On May 27, 2016, the ALJ issued an opinion finding that Shawn G. was not at fault for the overpayment, but that waiver would not be appropriate because Shawn G. has the ability to repay. The ALJ further recommended that Shawn G. be required to repay no more than $150 per month. The Appeals Council denied review on January 5, 2018, making the ALJ's decision the final decision of the Commissioner subject to judicial review. [Filing No. 4 at 5.]

         Shawn G., proceeding pro se, as he did before the ALJ, timely filed his Complaint pursuant to 42 U.S.C. § 405(g), asking this Court to review the denial of his waiver request. [Filing No. 1.] The Court concludes that the ALJ properly found that Shawn G. is able to repay the overpayment. However, accepting the ALJ's unchallenged calculation, Shawn G.'s repayment plan would leave him with at most $50 per month as a buffer for unanticipated and fluctuating expenses. The Court holds that this narrow margin is incompatible with the regulatory requirement that repayment not consume “substantially all of [a claimant's] current income . . . to meet current ordinary and necessary living expenses.” 20 C.F.R. § 404.508(b). Therefore, for the reasons explained below, the Court AFFIRMS IN PART the Commissioner's decision not to waive repayment and REVERSES AND REMANDS IN PART WITH INSTRUCTIONS to form a plan requiring payments of no more than $100 per month.


         Standard of Review

         The Court reviews the Commissioner's waiver decision under the same standards ordinarily applied in the denial of benefits context, affirming the Commissioner's decision as long as it is supported by substantial evidence and is not contrary to law. See Banuelos v. Apfel, 165 F.3d 1166, 1169 (7th Cir. 1999), overruled in part on other grounds by Johnson v. Apfel, 189 F.3d 561, 562-63 (7th Cir. 1999)). For the purpose of judicial review, “[s]ubstantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Barnett v. Barnhart, 381 F.3d 664, 668 (7th Cir. 2004) (quotation omitted).



         A. Employment Background & Waiver Request

         In October 2003, Shawn G. began receiving DIB due to his disabling depression and mental illness. [SeeFiling No. 6 at 3-4 (Shawn G.'s explanation of medical history); Filing No. 4 at 81 (doctor's letter stating that Shawn G. has a disability); Filing No. 4 at 137 (certificate of completion from St. Vincent Stress Center Adult Day Therapy Program); Filing No. 4 at 116 (reflecting disability onset date in April 2001).] After receiving information regarding the Ticket to Work program from the SSA, which was designed to assist people with disabilities in returning to work, [Filing No. 4 at 84-85; Filing No. 4 at 89-93], Shawn G. began meeting with vocational rehabilitation counselors in October 2006 through the state social services agency, [Filing No. 4 at 97; Filing No. 4 at 99]. In October 2007, the state agency placed Shawn G. in a job a security guard. [Filing No. 4 at 118.]

         In 2010 and 2011, the SSA sent Shawn G. several letters regarding his work income. On September 26, 2010, the SSA sent Shawn G. a letter asking for more information about his work activity. [Filing No. 4 at 132-34.] On November 5, 2010, the SSA sent Shawn G. a letter indicating that the SSA did not give him “credit for your earnings in 2009” and explained that he would receive an increased benefit payment. [Filing No. 4 at 135-36.]

         On June 18, 2011, the SSA sent Shawn G. a letter explaining that he likely was not entitled to DIB payments beginning in April 2009. [Filing No. 4 at 139.] The letter explained that the nine month trial work period, during which a DIB recipient could keep both disability benefits and work income, had expired in December 2008, and that Shawn G. was also entitled to benefits for the three months after the trial work period ended. [Filing No. 4 at 140-41.] The letter explained how Shawn G. could submit more information regarding his income and explained that the SSA would notify him regarding any overpayments. [Filing No. 4 at 141-42.] On June 28, 2011, the SSA sent Shawn G. a letter explaining that “[w]e have decided that your disability has ended and that you are not entitled to Social Security disability payments beginning April 2009, ” based upon his work activity. [Filing No. 4 at 143.] The letter set forth the overpayment amount and explained that Shawn G. could repay the money, appeal the determination, or request a waiver. [Filing No. 143-146.]

         After reaching out to a U.S. senator for assistance, in August 2013 Shawn G. submitted a waiver request stating that he was not at fault for the overpayment and that repayment would cause him financial hardship. [SeeFiling No. 4 at 154-56.] The SSA field office denied the requested waiver on August 30, 2013. [Filing No. 4 at 156.] By letter dated November 27, 2013, the SSA explained that it found Shawn G. at fault for the overpayment and explained how Shawn G. could appeal the waiver denial. [Filing No. 4 at 162.]

         On February 18, 2016, Shawn G. completed additional waiver application paperwork, explaining that he and his spouse owed approximately $15, 000 for an early withdrawal from his spouse's 401k account to fix up homes for their children. [Filing No. 4-1 at 20-25.] Shawn G.'s application indicated that he had household monthly income of $3, 900 and household monthly expenses of $3, 768. [Filing No. 4-1 at 26.]

         B. Hearing before the ALJ

         On April 6, 2016, the ALJ held a hearing on Shawn G.'s waiver request at which Shawn G. appeared pro se. [Filing No. 4 at 20-52.] The ALJ informed Shawn G. of his right to representation and offered to reschedule the hearing if Shawn G. wished to look for representation. [Filing No. 4 at 22-23.] After verifying that Shawn G. wished to proceed pro se, the ALJ questioned him about his work history. [Filing No. 4 at 24-26.] Shawn G. explained that he believed that the SSA and ...

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