Rulings in the Administration of the Railroad Retirement Act and the Railroad Unemployment Insurance Act-1960

INTRODUCTION

The Railroad Retirement Board has authorized the publication of selected rulings of its Bureau of Law issued during 1960. The purpose is to provide the public with readily accessible information as to the application and interpretation of the law in questions that arise in the administration by the Board of the Railroad Retirement and the Railroad Unemployment Insurance Acts.

The ruling in each case represents the application of the law to the particular facts of the case. An even slightly different factual situation might require a different ruling. The application of the rulings may be affected by legislation, court decisions, and new regulations. Also, the rulings may be modified or superseded by later rulings.

The Railroad Retirement Act and the Railroad Unemployment Insurance Act are included in Title 45 of the United States Code. The Railroad Retirement Act is included as sections 228a-s. The letters correspond in numerical order to the sections of the Act. The Railroad Unemployment Insurance Act is included as section 351 through 367. Section 351 is section 1 of the Railroad Unemployment Insurance Act.

The regulations of the Board are included in the Code of Federal Regulations under Title 20 as Parts 201 through 370. For example, the citation 20 CFR 208.29 refers to section 29 of Part 208 of Title 20 of the Code of Federal Regulations.

The rulings of the General Counsel and Associate General Counsel of the Railroad Retirement Board are designated as "L," followed by the last two figures of the year and by the number of the ruling. For example, L-60-22 is the twenty-second ruling issued in 1960.

(1)

SECTION 19(a) OF THE RAILROAD RETIREMENT ACT-INCOMPETENT-EXPENDITURE OF FUNDS OF INCOMPETENT DERIVED FROM BENEFITS

20 CFR 266.6

L-60-15

Small portion of the annuity of an incompetent child may be used by superintendent of institution for the mentally incompetent (to whom the annuity is paid for the child), to which both child and mother of child have been commited, to provide a few comforts for mother who is totally without funds.

An inquiry has been made as to whether the superintendent of a state institution for the mentally incompetent, who has been recognized as the person to whom the Board will authorize annuity payments on behalf of a mentally incompetent adult child of a deceased employee committed to such institution, may use a small portion of such child's annuity payments to provide a few comforts to the mother of the child, who is also committed to the same institution as an incompetent. The amount proposed to be used for the mother is "$5.00 per month for spending and on Special Holidays buying some wearing apparel". The mother has no income of her own. The child, whose condition is never expected to improve, now has an accrued amount of $1,049.20 in his trust fund account.

Section 19(a) of the Railroad Retirement Act provides:

Every individual receiving or claiming benefits, or to whom any right or privilege is extended, under this or any other Act of Congress now or hereafter administered by the Board shall be conclusively presumed to have been competent until the date on which the Board receives written notice, in a form and manner acceptable to the Board, that he is an incompetent, or a minor, for whom a guardian or other person legally vested with the care of his person or estate has been appointed: Provided, however, That the Board may, in its discretion, validly, recognize actions by, and conduct transactions with, others acting, prior to receipt of, or in the absence of, such written notice, in behalf of an individual found by the Board to be an incompetent or a minor, if the Board finds such actions or transactions to be in the best interests of such individual.

Section 266.6 of the Railroad Retirement Board's Regulations prescribes (20 CFR 266.6):

In the absence of a written notice of the appointment of a guardian or other person legally vested with the care of the person or estate of an incompetent or minor, the Board shall, except where special circumstances appear, recognize a person to act in behalf of the incompetent or minor under the following circumstances: (a) When the individual has been adjudged mentally incompetent by a court having jurisdiction; (b) when the individual has been committed to a mental institution by a court having jurisdiction; (c) when the individual is an inmate of a mental institution; (d) when the individual has become physically or mentally disabled to handle his own affairs; (e) when the minor is less than 16 years of age; (f) when the minor is between 16 and 18 years of age and is in the care of any person and does not have capacity to act on his own behalf.

In the circumstances of this case, no objection can be seen to informing the superintendent that amounts of this character may be expended for such

purposes. The obligation of the superintendent, as trustee of the annuity payments, is, of course, to use such payments on behalf of the child and in its best interests. But where, as here, it is evident that the full amount of the child's annuity is not needed solely for the child's care and in all probability will not be used directly for his immediate benefit, the expenditure of the amounts described, to provide a few comforts for the child's mother, in accordance with every child's moral obligation to the mother when the child has surplus income and the mother none at all, could reasonably be regarded as a use on behalf of the child and in its best interests, particularly since the person who would here expend the money, the superintendent, is not the same person for whose direct benefit it would be spent.

SECTION 5(b) OF THE RAILROAD RETIREMENT ACT-WIDOW'S CURRENT INSURANCE ANNUITY-CHILD IN CARE OF WIDOW

20 CFR 237.408 (d)

L-60-19

Claimant is not qualified for widow's insurance annuity during such time when the child of her and her deceased husband (rights to the annuity depend on having the child in her care) is in a state institution.

Section 5(b) of the Railroad Retirement Act provides:

A widow of a completely or partially insured employee, who is not entitled to an annuity under subsection (a) and who at the time of filing an application for an annuity under this subsection will have in her care a child of such employee entitled to receive an annuity under subsection (c) shall be entitled to an annuity for each month equal to the employee's basic amount.

The question is whether Mrs. R, the claimant, is entitled to a widow's current insurance annuity, which depends on having a child in her care, when such child is in a state institution.

In November 1957, Mrs. R, who resides at Fort Worth, Texas, was awarded mothly benefits for herself and her disabled child, M, the stepchild of the deceased employee, effective August 1, 1957. Benefits were suspended effective January 1, 1959, upon receipt of a communication from a state school inquiring as to payment of "a rate for support, maintenance and treatment of our student".

Under the definition of a child contained in section 5(1)(1) of the Act, incorporating by reference section 216(e) of the Social Security Act, a stepchild of an employee who has had that status for a year before the employee died is his "child". And under paragraph (ii) of section 5(1)(1) of the Act a child over eighteen who has a permanent physical or mental condition which is totally disabling and which began before attainment of age eighteen can qualify for a child's annuity.

Section 237.408 (d) of the Board's regulations states:

Meaning of "in her care". A widow has a child "in her care" within the meaning of paragraph (a) (5) of this section if she takes parental responsibility for the welfare and care of such child, even though she does not live in the same home with the child.

M, who is about 27 years of age, was placed in a state school for the feeble minded in September 1947, pursuant to an order of a county court, which

found that she was feeble minded and that her father and mother were not in a position to take care of her. This was approximately a year after the marriage of her mother to R, the employee. M's natural father, from whom her mother was divorced, is still living. R died in August 1957. M has remained in state schools for the feeble minded, first at one place, and later at another, ever since her commitment in 1947, except that her mother has taken her home during the Christmas holidays and during summer vacations. The state school where the child is now, in a letter dated June 26, 1959, lists these "furloughs" (since 1955 apparently) as follows:

In the same letter, Mrs. R's visits to M in the school are listed as follows: 3-11-57; 4-18-57; 10-11-57; 11-17-57; 2-8-58; 5-23-58; 10-3-58; 11-23-58 and 3-19-59.

Mrs. R. estimates that she spends approximately $30 a month on clothing for M and says that in addition she spends other sums for incidentals, spending money, doctor's bills, life and hospitalization insurance, and so forth. She could remove M from the school at any time by merely making a request to the school superintendent, without any necessity for a court order. She is allowed to take M home at any time for as long as she wishes. Mrs. R was told by her doctor, however, when M was ten years old, that if she kept her at home all the time, to try to live a normal life, she would not live past her nineteenth birthday. Mrs. R was asked in 1949 if she could pay at least $5.00 a week toward M's room and board at the school, but she says at that time she was unable to do so, and since that time the school has not mentioned the matter. In a letter to the Board, however, as indicated above, the school indicated it would like "to set a rate for support, maintenance and treatment of our student".

In essential respects, this case is similar to that recently considered by the Board in the Appeal of C. In ruling that the child there involved (a minor and the natural child of the employee), was not "in the care" of her mother, the Board, after quoting section 404.331 of the Regulations of the Social Security Administration (20 CFR 404.331), explaining the meaning of “in her care", stated:

Under this section of the regulations, a mother who cannot exercise effective control of her child because of mental illness, would not have a child "in her care" for the purposes of the Social Security Act even though she is making substantial contributions to the child's' support. And, the fact that the mother may furnish support for the child is not enough to show that the child is "in her care", within the meaning of the Railroad Retirement Act. It must also be shown that she retains and exercises parental supervision over the child, and influences the training and development of the child in material respects. If the development and training of the child is controlled by the institution, a finding that the child is in the care of the mother cannot be made.

In the appellant's case the evidence shows clearly that, although she visits the child whenever it is possible for her to do so, the training and development of

the child are controlled by the school. The court found that the child was a suitable person for "care and treatment" at the school. And the child was placed in the school because of the difficulty her parents had in caring for her at home and the danger of injury to her when she strayed from the home premises, and because the school was better able to care for her. The evidence also shows clearly that the mental condition of the child is such that she requires continuous care, which would obviously be impossible for appellant to give at the distance she lives from the child.

The Board, upon consideration of all the evidence of record finds that the child was not in the "care" of appellant, within the meaning of the Act, when she filed her application for a widow's current insurance annuity on March 14, 1956; and accordingly, that appellant is not entitled to a widow's current insurance annuity under section 5(b) of the Act. Nor is she now entitled to any benefits under the provisions of the Act. Upon attaining age sixty, if otherwise qualified, appellant, upon filing application, may become eligible for a widow's insurance annuity under section 5(a) of the Act.

Mrs. R contends that she has the "full custody and responsibility" of M and the school superintendent states that "being in a State School does not take away the parent's right of parental responsibility, that is, in the matter of Support, Maintenance and Treatment." General statements of this kind by the parent or other parties that the parent has the child "in her care," or that the parent exercises "parental responsibility" are in the nature of conclusions, upon the very issue in the case, and, moreover, in this case, as in the C case, are to be considered in the light of the fact that the mental condition of the child is such that she requires continuing care of a personal kind, the performance of which the parent has delegated to the school. It may be, as Mrs. R says, that she occasionally makes suggestions as, for instance, that M's glasses need checking, and "they try awfully hard to please me in doing whatever I ask them to do for M". But the actual, personal care of M while in this institution is clearly in the hands of the school authorities. She is one of many such children or persons in the school, and such a school could not successfully be administered if the parents of each child were allowed to direct the manner in which their children were to be cared for.

Not only is this case considered to be controlled by the Board decision in the C case, but it is noted also that the Social Security Administration would reach the same conclusion (Social Security Claims Manual, sections 945.2 and 945.5). The circumstance that M is at home during this summer and the Christmas holidays does not serve to distinguish this case from the C case, except, of course, that during periods at home, she is to be considered "in the care" of her mother.

Accordingly, it is held that M may be considered to be "in the care" of her mother only during those periods when the daughter is at home with the mother with the consequence that only during such periods can Mrs. R be qualified for a widow's current insurance annuity.