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1st Circuit: Denying SSI Benefits to Puerto Ricans Violates Due Process

Social Security Cards for identification and retirement USA
By Joseph Fawbush, Esq. on April 21, 2020 | Last updated on August 10, 2021

A First Circuit panel held that a provision of the Social Security Act excluding residents of Puerto Rico from receiving Supplemental Security Income violated the Fifth Amendment. SSI provides payments to low-income Americans who are over 65, blind, or disabled. However, under the SSA, only Americans who live in the 50 states, the District of Columbia, and the Northern Mariana Islands are eligible to receive benefits.

The case arose when a resident of New York City began receiving SSI benefits. He then moved to Puerto Rico but did not inform the Social Security Administration. When the SSA learned of his move, they cut off benefits and filed a lawsuit to recover $28,000 it had previously paid to him.

In an affirmative defense, the man claimed that federal law excluding residents of Puerto Rico from SSI violated Due Process. The First Circuit panel, in a unanimous decision, agreed.

No Rational Basis for Excluding Residents of Puerto Rico

In evaluating classifications involved in social welfare laws, the government must meet a “rational basis" test, the First Circuit panel held. Specifically, it needs to show that the classification “rationally further[s] some legitimate governmental interest," a typically low bar. Further, the government appeared to have two precedential Supreme Court cases on its side.

However, the First Circuit distinguished this case from the two previous Supreme Court opinions, decided in the 1970s. What's more, the unanimous panel held that the government failed to meet the minimal rational basis test.

The government had two arguments for excluding residents of Puerto Rico from SSI benefits, both of which the panel found unconvincing. The government argued that since Puerto Ricans typically pay no federal income tax, they can be distinguished from other American citizens. The government also argued the cost of paying SSI in Puerto Rico is prohibitive. However, the First Circuit pointed out that Puerto Rico contributes significant sums to the federal treasury through other taxes, contributing more than six other states. Additionally, while the panel wrote that it “respect[s] the legislature's authority to make even unwise decisions to purportedly protect the fiscal integrity of SSI" but "even under rational basis review, the cost of including Puerto Rico's elderly, disabled, and blind in SSI cannot by itself justify their exclusion."

The decision could help residents of Puerto Rico, many of whom were suffering from economic hardship prior to the current pandemic, receive SSI if they otherwise qualify. The government has not yet indicated if it will appeal.

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