The claimant began receiving retirement insurance benefits (RIB) in August, 1978, after claiming she was retired. She represented that going forward, she would work only part time at her family’s jewelry store.

In August, 1984 claimant made a request for increased benefits. She and her husband went to the local social security office, where she completed a form describing her work activities. This form showed that, contrary to her application for RIB benefits, she continued to work full time. She performed duties in sales, contracts with wholesalers and administrative duties.

The agency investigated claimant’s retirement status. She later received a notice from social security that she had been overpaid benefits in the amount of $29,458.90. The agency determined that, although business records showed she had been paid a nominal salary of $50 per week, the true value of her services to the family jewelry company was between $20,000 in 1978 and $27,000 in 1983.

She requested a hearing by an administrative law judge. She did not claim that there was not an overpayment, or that the overpayment should be waived. Rather, she claimed that the amount of the overpayment was $5,854.02.

At the hearing she requested that the Judge subpoena the agency worker who had determined the amount of the overpayment, in order to cross-examine him. The Judge denied this request.

After the hearing, the Judge ruled that the overpayment determination was correct. However, he found that the agency had underestimated the value of claimant’s services. He found that the value of her services was equal to that of her husband, who was President of the company. This amounted, in the Judge’s calculation, to about $50, 000 per year. Claimant appealed.

The 6th Circuit Court upheld the ALJ’s ruling, while disagreeing with his calculation of the value of claimant’s services. The Court ruled that the the ALJ committed no error in denying claimant’s request for issuance of a subpoena to the field worker who calculated the overpayment, because claimant had access to all the same paperwork as he did.

The Court ruled that, although it was error for the ALJ to assume that the value of claimant’s services to the company was equal to that of her husband, the result would have been the same had he correctly valued her services. Therefore, the incorrect calculation was harmless error.

The Court upheld the overpayment.

See Berger v. Secretary of Health and Human Services, 835 F.2d 635 (6th Cir. 1987). See also Social Security Ruling (SSR) 88-12c.

This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.