UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

HELEN L. JONES,
Plaintiff-Appellant,

v.
                                                                    No. 96-2666
SHIRLEY S. CHATER, COMMISSIONER OF
SOCIAL SECURITY,
Defendant-Appellee.

Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Albert V. Bryan, Jr., Senior District Judge.
(CA-95-1415-A)

Submitted: June 17, 1997

Decided: August 25, 1997

Before WILKINS, NIEMEYER, and HAMILTON, Circuit Judges.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

Lewis E. Gelobter, Emily J. Kaufmann, LEGAL SERVICES OF
NORTHERN VIRGINIA, INC., Leesburg, Virginia, for Appellant.
James W. Winn, Chief Counsel, Region III, Nora R. Koch, Assistant
Regional Counsel, Office of General Counsel, SOCIAL SECURITY
ADMINISTRATION, Philadelphia, Pennsylvania; Helen F. Fahey,
United States Attorney, Rachel C. Ballow, Assistant United States
Attorney, Alexandria, Virginia, for Appellee.

_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Helen Jones appeals from an order of the district court adopting the
magistrate judge's recommendation to uphold the Commissioner's
determination that she was not without fault in causing an overpay-
ment of insurance benefits to her, and therefore may not receive a
waiver of recovery of the overpayment. Jones applied for widow's
insurance benefits in May 1990. A representative of the Social Secur-
ity Administration ("SSA") recorded on her application the informa-
tion provided by Jones, including the fact that she would receive a
pension upon her retirement from the federal government. The SSA
employee informed her that with the offset for the pension, her
widow's benefits would be only $18.00 per month.

Jones signed the application, which stated that she would be obli-
gated to inform SSA when she began receiving the pension, but later
the same day filed another form withdrawing her application "because
of the government pension offset and the receipt of a government
pension." Although Jones testified that she does not recall filing the
withdrawal request, she called SSA in August 1990 to inquire about
applying for benefits. Due to a clerical error, Jones's withdrawal form
was never processed, and SSA notified her on August 20, 1990, that
her application for widow's benefits had been approved, and that her
monthly benefit, payable when she ceased working, would be
$484.90.

Jones retired in December 1990, and began receiving a government
pension of $723 a month and widow's benefits of $511 per month.
She did not inquire about the discrepancy between the $18 figure she
had been told she would receive and the $511 she actually received.
SSA eventually discovered that it never processed Jones's withdrawal
application and contacted her about it. She called SSA in April 1992,
and informed them that she did not withdraw her claim, and that her

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widow's benefits were her only source of income. When SSA con-
tacted her again in August 1992, however, she admitted that she was
also receiving a government pension. That same month, SSA notified
Jones that her benefits would be reduced, and that she had been over-
paid by $9909 from December 1990 to August 1992. The parties
agreed to a payment rate of $10 per month.

Jones filed a request for waiver of recovery of the overpayment in
December 1992. The ALJ determined that Jones was not without fault
in causing the overpayment and, accordingly, denied the request for
waiver. The Appeals Council denied review, and the district court
adopted the magistrate judge's recommendation to affirm the decision
of the Commissioner.

The Commissioner's decision must be affirmed if it is supported by
substantial evidence. 42 U.S.C. § 405(g) (1994); Richardson v.
Perales, 

, 401 (1971). The Commissioner's findings of
fact, however, are not binding if they were based upon the application
of an improper legal standard. See Coffman v. Bowen, 

,
517 (4th Cir. 1987).

Waiver of recovery of an overpayment is appropriate under the
Social Security Act ("Act") where the individual receiving the over-
payment is: (1) without fault in causing the overpayment, and (2)
recovery would either defeat the purpose of title II of the Act or be
against equity and good conscience. 42 U.S.C. § 404(b) (1994). If the
Commissioner properly determines that a claimant is not without
fault, the inquiry ends. See Garnett v. Sullivan , 

, 782 (4th
Cir. 1990). The claimant bears the burden of proving that she was
without fault in causing the overpayment. See Bray v. Bowen, 

, 687 (5th Cir. 1988).

Under the applicable regulations, in all overpayment cases except
"deduction" overpayment cases, whether the claimant is at fault
depends on whether the overpayment was due to: (1) an incorrect
statement by the claimant which she knew or should have known to
be incorrect; (2) the claimant's failure to furnish information which
she knew or should have known to be material; or (3) the claimant's
acceptance of a payment which she either knew or could have been
expected to know was incorrect. See 20 C.F.R. § 404.507(a)-(c)

                    3
(1996). For deduction overpayment cases, the ALJ is required to
apply the criteria set forth at 20 C.F.R. §§ 404.510, 511 (1996), to
determine fault. In this case, the ALJ applied section 404.507 and
found that Jones was not without fault because she knew or could
have been expected to know that the monthly checks she received
were for an amount exceeding that to which she was entitled.

On appeal, Jones's primary contention is that the ALJ applied the
wrong standard in determining fault. Jones contends that her overpay-
ment was a deduction overpayment, because it resulted from SSA's
failure to deduct the offset for her pension from her widow's benefits.
She contends that this case must be remanded so that the ALJ can
determine fault under the proper criteria. We disagree.

The regulations provide six categories of cases in which an
insured's monthly insurance benefits must be reduced. See 20 C.F.R.
§ 404.401(a)-(f) (1996). Decreases for deductions are governed by
subsection (b) of section 404.401. Subsection (b) enumerates seven
different forms of deductions. Subsection (b) does not address
decreases based on an offset for funds received from a government
pension. Moreover, this silence is clearly not inadvertent, because
such decreases are specifically addressed by 20 C.F.R. § 404.408a
(1996). That section explicitly states that such decreases are "reduc-
tions," not deductions. Reductions are among the six categories listed
by section 404.401. See §404.401(a). Thus, viewing the regulatory
scheme as a whole, it is clear that the decrease to Jones's benefits was
not a deduction overpayment.

Jones correctly points out that the regulations provide only two
terms for overpayments; "deduction overpayments," and "entitlement
overpayments." See 20 C.F.R. §§ 404.510a, 511 (1996). Notwith-
standing the fact that decreases to insurance benefits due to pension
offsets are specifically labeled "reductions" by section 404.408a, and
that such decreases are not among the universe of deductions enumer-
ated by section 404.401(b), Jones contends that her overpayment can-
not be viewed as an entitlement overpayment because the decrease to
her insurance benefits does not meet the regulatory definition of an
entitlement overpayment, and therefore can only be a deduction over-
payment. The applicable regulation, however, states, in pertinent part,
that "a benefit payment exceeding the amount to which [s]he is enti-

                    4
tled, constitutes an entitlement overpayment." 20 C.F.R. § 404.510a.
Because Jones clearly received an amount exceeding the amount to
which she was entitled, she falls within the scope of this definition.

Jones also avers that the ALJ's finding of fault was erroneous even
under section 404.507, because he failed to take into account her age,
intelligence, and mental and educational limitations. Section 404.507
requires the ALJ to consider "all pertinent circumstances, including
the individual's age and intelligence, and any physical, mental, educa-
tional, or linguistic limitations . . . the individual has." 

regulation does not require the ALJ to make explicit find-
ings regarding the listed criteria where there is no basis for consider-
ing such criteria to be pertinent. See Anderson v. Sullivan, 

, 1123 (9th Cir. 1990). In this case, there was no evidence or
allegation that Jones suffered from any kind of physical or mental
impairment. Moreover, the ALJ questioned her at the hearing regard-
ing her education (tenth-grade) and work background (23 years ser-
vice as clerical worker for federal government), and presumably
gained some insight into her intelligence from this information and
from her testimony at the hearing.

The only support Jones provides for her position that such factors
were relevant is the ALJ's finding that Jones did not "understand" the
social security system or why she was receiving more than the $18
she was originally told she would receive. But this lack of understand-
ing was not even allegedly the result of any mental deficiency, but
rather was due to the fact that SSA's actions were simply inconsistent.
The ALJ, however, rationally concluded that these inconsistencies
either actually aroused or could have been expected to arouse Jones's
suspicion that her benefit payments were erroneous. Specifically, the
ALJ reasonably found that since an SSA representative told Jones that
she was only entitled to $18 a month, and she did not understand why
she thereafter received monthly checks for nearly 27 times that
amount, she either knew or could have been expected to know that the
amounts she received was incorrect. This conclusion is further sug-
gested by consideration of the fact that Jones did not inquire about the
discrepancy and at one point concealed from an SSA employee the
fact that she was receiving a government pension.

Accordingly, the order of the district court is affirmed. We dis-
pense with oral argument because the facts and legal contentions are

                     5
adequately presented in the materials before the court and argument
would not aid the decisional process.

AFFIRMED

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