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April 28, 1985

Creola Wheeler, Plaintiff
Margaret M. Heckler, Secretary of Health and Human Services, Defendant

The opinion of the court was delivered by: STERN

This matter was opened to the Court by Jeffrey G. Paster, plaintiff's counsel, seeking an award of attorney's fees under section 206(b) of the Social Security Act, 42 U.S.C. § 406(b). The Secretary of Health and Human Services (Secretary) does not object to an award of fees, only to the amount. For the reasons following, we find that Mr. Paster is entitled to the full sum requested.


 Subsequently, plaintiff was notified that her retroactive disability benefits for November 1982 through May 1984 amounted to $7,184.00, but that this sum would be reduced by $3,045.02 "because you received Supplemental Security Income payments for 05/83 through 06/84." Id. at Exh. B. (We note immediately that this statement was not entirely accurate since plaintiff had not actually received SSI payments during those months.) Moreover, the SSA noted that it was withholding $813.47, a sum allegedly representing the maximum 25 percent available from her retroactive benefits as payment for attorney's fees. Id. Quick arithmetic shows that the SSA computed the 25 percent after reducing her retroactive Title II benefits by part of her retroactive SSI award. By this device, the potential fee available to plaintiff's counsel shrank from 25 percent of $7,184.00, or $1,796.00, to $ 813.47.

 Plaintiff's counsel objects to this procedure, arguing that where SSI is awarded concurrently or subsequently to an award of disability benefits, and both are computed for retroactive periods, the SSI award should not reduce the amount available for attorney's fees under 42 U.S.C. § 406. The Secretary counters that the language of the Social Security Act and the regulations restrict fees to 25 percent of past-due disability benefits "as reduced under 42 U.S.C. § 1320 by the amount of SSI payments received by plaintiff for the period in which she was entitled to retroactive Social Security benefits." Def's Brief at 4.


 The question is whether the Secretary may properly apply 42 U.S.C. § 1320 to reduce an award of retroactive Title II disability benefits, for purposes of computing attorney's fees under 42 U.S.C. § 406(b), when SSI benefits are awarded concurrently with, or subsequently to the disability payments. Section 406(b) of Title 42 of the United States Code was enacted, in part, to ensure adequate representation of Social Security claimants. See, e.g., Reid v. Heckler, 735 F.2d 757, 760-61 (3d Cir. 1984); MacDonald v. Weinberger, 512 F.2d 144, 146 (9th Cir. 1975); Dawson v. Finch, 425 F.2d 1192, 1195 (5th Cir.), cert. denied, 400 U.S. 830, 91 S. Ct. 60, 27 L. Ed. 2d 60 (1970). It provides that the court

may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of past-due benefits to which the claimant is entitled by reason of such judgment and the Secretary may. . . certify the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past due benefits.

 42 U.S.C. § 406(b).

 Section 1320a-6 of Title 42 directs the SSA to reduce retroactive Social Security disability payments if the individual also received SSI for the same period. The amount of the offset is the amount of SSI which would not have been paid if the individual had received the Title II benefits when they were due, instead of retroactively. See 42 U.S.C. § 1320a-6 (amended 1984). *fn1" If this offset also operates to reduce the base amount for calculating attorney's fees under section 406(b), then it would severely undercut the purpose of that provision to encourage legal representation of Social Security claimants. We do not think that this was an intended or a necessary effect of section 1320a-6.

 The explicitly stated intent of section 1320a-6 was to recover windfalls from those who had over-collected SSI benefits in light of a subsequent retroactive award of Title II disability benefits. See H. Conf. Rep. No. 96-944, 96th Cong., 2nd Sess. 69, reprinted in 1980 U.S. Code Cong. & Ad. News, 1277, 1416; S. Rep. No. 96-408, 96th Cong. 2nd Sess. 78, reprinted in 1980 U.S. Code Cong. & Ad. News 1277, 1356. Congress sought to remedy a specific problem created by individuals who were dual beneficiaries of payments under both the SSI and disability programs. To emphasize this point it is worth reprinting a passage from the legislative history of section 1320a-6:

Present law. -- A substantial proportion of SSI recipients are also eligible for benefits of old-age, survivors, and disability insurance program under title II of the Social Security Act. The proportion of dual eligibility can be expected to increase in the future since many of those who are now ineligible for title II benefits are simply so old that their period of work history occurred prior to the time that social security coverage was available. . . .
Though the two programs are administered by the same agency, it can sometimes happen that an individual's first check under one program will be delayed. If the SSI check is delayed, retroactive entitlement takes into account the amount of income the individual had from social security. However, if the title II check is delayed, a windfall to the individual can occur since it is ...

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