Jacobs v. Berryhill

Background

William M. Jacobs sought judicial review under 42 U.S.C. § 405(g) of the Commissioner’s final decision concerning an overpayment of disability insurance benefits. Jacobs had been found disabled and entitled to benefits beginning in April 2002. The agency later determined that he earned more than the applicable substantial gainful activity (SGA) level during seven months—February, March, June, August, September, and October 2011, and February 2012. Because he was ineligible for benefits during those months, the administrative law judge found an overpayment of $7,381. The amount owed had been reduced to $5,266.60 as of December 2015 after payments were credited to his account.

After the Appeals Council denied review, Jacobs filed this action and moved for summary judgment. The defendant filed a cross-motion for summary judgment. Jacobs sought reversal and remand for payment of benefits.

Issues Before the Court

The court addressed only the administrative law judge’s February 1, 2017 hearing decision. It expressly declined to consider Jacobs’s statement that his benefits were later terminated in February 2018 because that termination was not part of the decision under review.

Jacobs argued that several expenses should have been deducted from his gross wages when determining whether he performed SGA: payments on two Department of Education loans, two used-vehicle allowances, a 12-month trial grace-period benefit, and a $24,000 federal down-payment assistance program. He also appeared to seek damages related to the loss of a partially completed home and garage or accessory unit.

Court’s Analysis

The court explained that Social Security regulations allow deductions from wages for certain reasonable costs of items and services needed to enable a disabled person to work. The regulations require, among other things, that the claimant be disabled, that the impairment require the item or service for work, and that the claimant personally pay the unreimbursed cost in cash during a month of work. Examples include attendant care, medical devices, prosthetic devices, equipment, drugs, and medical services.

The administrative law judge had found that Jacobs did not claim impairment-related work expenses, an employer subsidy, or special work circumstances such as a sheltered workshop. The district court agreed that the expenses Jacobs continued to claim were not deductions permitted by the regulations. The court considered the automobile loans the only potentially relevant claimed cost, but explained that the regulations allow deductions for modifications to a vehicle—such as a ramp, hand controls, or a relocated gas pedal—not for the cost of the vehicle itself. Jacobs did not claim that he had a modified vehicle. The court therefore concluded that the administrative law judge did not err in refusing to deduct the claimed expenses.

The court also rejected Jacobs’s argument that only full-time employment can constitute SGA. Under the cited regulation, work may be substantial even when performed part-time. The court stated that the relevant focus was gross monthly earnings, which the agency had determined exceeded $1,000 in 2011 and $1,010 in 2012 during the months at issue.

The court noted that it was not permitted to award damages that may have resulted from the loss of disability benefits. It also applied the standard requiring reversal only if the agency’s findings were legally erroneous or unsupported by substantial evidence, meaning relevant evidence that a reasonable person could accept as adequate support.

Disposition

The court held that the administrative law judge correctly found Jacobs engaged in SGA during seven months and therefore correctly found an overpayment of disability benefits. Judge Kandis Westmore DENIED Plaintiff’s motion for summary judgment and GRANTED Defendant’s cross-motion for summary judgment. The Clerk was ordered to close the case.