95-29535. Income Exclusions in the Supplemental Security Income Program  

  • [Federal Register Volume 60, Number 234 (Wednesday, December 6, 1995)]
    [Proposed Rules]
    [Pages 62356-62359]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 95-29535]
    
    
    
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    SOCIAL SECURITY ADMINISTRATION
    20 CFR Part 416
    
    [Regulation No. 16]
    RIN 0960-AE22
    
    
    Income Exclusions in the Supplemental Security Income Program
    
    AGENCY: Social Security Administration.
    
    ACTION: Proposed rules.
    
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    SUMMARY: These proposed supplemental security income (SSI) regulations 
    update existing regulations to reflect the statutory amendment of the 
    exclusion from income of Alaska Longevity Bonus (ALB) payments. They 
    also update existing regulations to reflect the statutory exclusion 
    from income of hostile fire pay received by an SSI claimant or 
    recipient and reflect the current operating procedure of excluding 
    hostile fire pay when determining the countable income of an ineligible 
    spouse or ineligible parent. In addition, they update existing 
    regulations to reflect the current operating procedure of excluding 
    impairment-related work expenses, interest on excluded burial funds, 
    appreciation in the value of excluded burial arrangements, and interest 
    on the value of excluded burial space purchase agreements, when 
    determining the countable income of an ineligible spouse or ineligible 
    parent.
    
    DATES: To be sure that your comments are considered, we must receive 
    them no later than February 5, 1996.
    
    ADDRESSES: Comments should be submitted in writing to the Commissioner 
    of Social Security, P.O. Box 1585, Baltimore, MD 21235, sent by telefax 
    to (410) 966-2830, sent by E-mail to regulations@ssa.gov'' or 
    delivered to 3-B-1 Operations Building, 6401 Security Boulevard, 
    Baltimore, MD 21235, between 8:00 a.m. and 4:30 p.m. on regular 
    business days.
    
    FOR FURTHER INFORMATION CONTACT: Henry D. Lerner, Legal Assistant, 3-B-
    1 Operations Building, 6401 Security Boulevard, Baltimore, MD 21235, 
    (410) 965-1762.
    
    SUPPLEMENTARY INFORMATION: For purposes of the SSI program, income is 
    defined in our regulations to mean anything that is received in cash or 
    in kind which can be used to meet an individual's needs for food, 
    clothing, or shelter. These proposed regulations include certain 
    provisions which address items that are excluded from income.
    
    Alaska Longevity Bonus Payments
    
        Under section 1612(b)(2)(B) of the Social Security Act (the Act), 
    Alaska Longevity Bonus (ALB) payments are excluded from income under 
    certain circumstances.
        Originally, the ALB program made monthly payments to residents of 
    Alaska who had attained age 65 and had lived in the State continuously 
    for at least 25 years. The SSI income exclusion applied to such 
    payments if made under a program established before July 1, 1973. 
    However, following a decision by the Alaska State Supreme Court that 
    the 25-year residency requirement was unconstitutional, in 1984 the 
    State legislature changed the residency requirement to 1 year.
        Concerns were raised that since the revised (1984) ALB program was 
    established after July 1, 1973, the controlling date of the original 
    section 1612(b)(2)(B) provision, payments made under the revised ALB 
    program could no longer be excluded for SSI purposes. Section 2616 of 
    Public Law 98-369 was enacted on July 18, 1984 to address those 
    concerns. Section 2616 amended section 1612(b)(2)(B) of the Act in such 
    a way as to:
         Continue the ALB exclusion for persons who, prior to 
    October 1985, became eligible for SSI and satisfied the 25-year 
    residence requirement of the program as in effect prior to January 1, 
    1983; and
         Preclude extending the ALB exclusion to ALB payments based 
    on the 1-year residency requirement.
        Current regulations at Secs. 416.1124(c)(7) and 416.1161(a)(12) 
    follow the wording of the original statutory exclusion in section 
    1612(b)(2)(B) of the Act. Regulations at Sec. 416.1124(c)(7) presently 
    provide for excluding from the income of a claimant or recipient 
    ``[p]eriodic payments made by a State under a program established 
    before July 1, 1973, and based solely on your length of residence and 
    attainment of age 65 * * *.'' Regulations at Sec. 416.1161(a)(12) 
    presently provide for excluding from the income of an ineligible spouse 
    or ineligible parent ``[p]eriodic payments made by a State under a 
    program established before July 1, 1973, and based solely on duration 
    of residence and attainment of age 65 * * *.''
        The proposed regulations will change the wording of the above 
    referenced regulations so that they conform to the 1984 legislation. 
    The proposed regulatory language will not change 
    
    [[Page 62357]]
    current operating procedures since those procedures already conform to 
    the 1984 legislation.
    
    Hostile Fire Pay
    
        Although it is unlikely that an active member of the uniformed 
    services would apply or be eligible for SSI benefits, some military 
    service members have spouses and children who apply for and receive SSI 
    benefits.
        Under section 209(d) of the Act, basic pay is the only form of 
    compensation to members of the uniformed services that is treated as 
    wages for title II purposes. Under section 1612(a)(1) of the Act, 
    earned income in the form of wages for SSI purposes is the same as 
    wages for the title II annual earnings test. Therefore, basic pay is 
    the only form of military compensation that is treated as wages, and 
    hence, as earned income, for SSI purposes.
        All other forms of compensation to members of the uniformed 
    services are considered unearned income. These other forms of 
    compensation include allowances paid in cash for food, clothing, and 
    shelter; free food, clothing, and shelter; and special and incentive 
    pay.
        One form of special pay is hostile fire pay, which is authorized 
    under 37 U.S.C. 310. Hostile fire pay is a type of special pay to a 
    service member who, for any month he/she is entitled to basic pay, is:
         Subject to hostile fire or explosion of hostile mines; or
         On duty in an area in which he/she is in imminent danger 
    of being exposed to hostile fire or explosion of hostile mines, and
        While on duty in that area, other service members in the same area 
    are subject to hostile fire or explosion of hostile mines; or
         Killed, injured, or wounded by hostile fire, explosion of 
    a hostile mine, or any other hostile action.
        Section 13733(b) of the Omnibus Budget Reconciliation Act of 1993 
    (OBRA), Pub. L. 103-66, amended section 1612(b) of the Act to exclude 
    from income any hostile fire pay received in or after October 1993.
        Current regulations do not reflect the exclusion from income of 
    hostile fire pay for eligible individuals, but hostile fire pay has 
    been excluded under SSI operating procedure since October 1, 1993. 
    Moreover, under these instructions, such pay has been excluded in 
    determining the income of ineligible spouses and parents whose income 
    is deemed to eligible individuals.
        In addition to adding to the regulations the statutorily required 
    exclusion of hostile fire pay from an eligible individual's income, we 
    propose to include the current operating procedure of excluding hostile 
    fire pay when determining the countable income of an ineligible spouse 
    or ineligible parent. The proposed inclusion reflects the statutory 
    authority granted the Commissioner of Social Security under section 
    1614(f) (1) and (2) of the Act to waive the deeming of income from an 
    ineligible spouse or parent to an eligible individual when such deeming 
    is determined by the Commissioner of Social Security to be inequitable 
    under the circumstances. By specifically singling out hostile fire pay 
    for exclusion from an eligible individual's income, Congress expressed 
    its intent that receipt of these monies should not have an adverse 
    effect on an individual's SSI eligibility or payment amount. This 
    intent would not be realized if these monies were deemed to an eligible 
    individual. The statutory exclusion of hostile fire pay would have 
    little meaning if not applied to ineligible spouses and parents since, 
    as noted above, it is unlikely that an active member of the uniformed 
    services would be eligible for SSI.
    
    Impairment-Related Work Expenses
    
        Impairment-related work expenses (IRWE) are expenses for items or 
    services which are directly related to enabling a person with a 
    disability to work and which are necessarily incurred by that 
    individual because of a physical or mental impairment as explained at 
    regulations Secs. 404.1576 and 416.976.
        Prior to December 1, 1990, in determining countable income, an 
    individual's IRWE were deducted from his/her earned income once 
    eligibility was established without using this exclusion. Effective 
    December 1, 1990, section 5033 of Public Law 101-508 amended section 
    1612(b)(4)(B)(ii) of the Act and liberalized the IRWE exclusion. The 
    legislation allows an individual to use the IRWE exclusion to establish 
    eligibility.
        Regulations at Sec. 416.1112(c)(6) recently have been revised to 
    implement changes enacted by section 5033 of Public Law 101-508. These 
    regulatory revisions were published in the Federal Register on August 
    12, 1994, at 59 FR 41400, 41405.
        Regulations at Sec. 416.1161(a) list the types of income that are 
    excluded from the income of an ineligible spouse and ineligible parent 
    for deeming purposes. IRWE are not included in this list, but IRWE have 
    been excluded from the income of ineligible spouses and ineligible 
    parents under SSI operating procedures since 1990.
        We propose to add to the regulations the current operating 
    procedure which is to exclude IRWE when determining the countable 
    income of an ineligible spouse or ineligible parent for deeming 
    purposes. By specifically singling out IRWE for exclusion from an 
    eligible individual's income, Congress expressed its intent that 
    receipt of these monies should not have an adverse effect on an 
    individual's SSI eligibility or payment amount. This intent would not 
    be realized if these monies were deemed to an eligible individual. The 
    proposed regulations would reflect the statutory authority granted the 
    Commissioner of Social Security under section 1614(f) (1) and (2) of 
    the Act to waive the deeming of income from an ineligible spouse or 
    parent to an eligible individual when such deeming is determined by the 
    Commissioner of Social Security to be inequitable under the 
    circumstances.
    
    Interest and Appreciation in Value of Excluded Burial Funds and Burial 
    Space Purchase Agreements
    
        Effective November 1, 1982, section 185 of Public Law 97-248 
    amended the Act to provide that any interest earned on excluded burial 
    funds and any appreciation in the value of excluded burial arrangements 
    left to accumulate, may be excluded from income by regulation. 
    Effective April 1, 1990, section 8013 of Pub. L. 101-239 amended the 
    Act to provide that interest earned on the value of agreements 
    representing the purchase of excluded burial spaces is excluded from 
    income if left to accumulate.
        Regulations at Sec. 416.1124(c)(9) implement the exclusion of 
    interest earned on excluded burial funds and appreciation in the value 
    of excluded burial arrangements, effective November 1, 1982. 
    Regulations at Sec. 416.1124(c)(15) implement the exclusion of any 
    interest earned on the value of agreements representing the purchase of 
    excluded burial spaces, effective April 1, 1990.
        Regulations at Sec. 416.1161(a) (relating to the treatment of 
    income of an ineligible spouse or ineligible parent) do not apply these 
    exclusions for purposes of deeming income, but both types of interest 
    and appreciation have been excluded from the income of ineligible 
    spouses and ineligible parents under SSI operating procedure.
        We propose to add to the regulations the current operating 
    procedure which is to exclude interest on burial funds, appreciation in 
    the value of burial arrangements, and interest on the value of burial 
    space purchase agreements, 
    
    [[Page 62358]]
    that are excluded from resources, when determining the countable income 
    of an ineligible spouse or ineligible parent. The proposed regulations 
    would reflect the statutory authority granted the Commissioner of 
    Social Security under section 1614(f) (1) and (2) of the Act to waive 
    the deeming of income from an ineligible spouse or parent to an 
    eligible individual when such deeming is determined by the Commissioner 
    of Social Security to be inequitable under the circumstances. By 
    specifically singling out these monies for exclusion from an eligible 
    individual's income, Congress expressed its intent that receipt of 
    these monies should not have an adverse effect on an individual's SSI 
    eligibility or payment amount. This intent would not be realized if 
    these monies were deemed to an eligible individual.
        We are making a technical change to conform the language of 
    Sec. 416.1124(c)(9) to a prior policy change. Effective July 11, 1990, 
    changes related to the SSI burial fund exclusion were published in the 
    Federal Register at 55 FR 28373-77. As a result of these changes, 
    regulations at Sec. 416.1231(b)(1) were amended to require that 
    excluded burial funds be kept separate from all other resources not 
    intended for the burial of the individual or spouse. Furthermore, 
    section 416.1231(b)(7) was revised to provide that interest earned on 
    excluded burial funds and appreciation in the value of excluded burial 
    arrangements are excluded from resources if left to accumulate and 
    become part of the separate burial fund.
        Current regulations at Sec. 416.1124(c)(9) provide that we will not 
    count as income interest earned on excluded burial funds and any 
    appreciation in the value of an excluded burial arrangement which are 
    left to accumulate and become part of the separately identifiable 
    burial fund. We are conforming this regulation to the prior regulatory 
    change requiring the burial fund to be separate from other nonburial-
    related assets and not merely separately identifiable.
        The electronic file of this document is available on the Federal 
    Bulletin Board (FBB) at 9 a.m. on the date of publication in the 
    Federal Register. To download the file, modem dial (202) 512-1387. The 
    FBB instructions will explain how to download the file and the fee. 
    This file is in WordPerfect format and will remain on the FBB during 
    the comment period.
    
    Regulatory Procedures
    
    Executive Order 12866
    
        We have consulted with the Office of Management and Budget and 
    determined that these rules do not meet the criteria for a significant 
    regulatory action under Executive Order 12866.
    
    Regulatory Flexibility Act
    
        We certify that these rules will not have a significant economic 
    impact on a substantial number of small entities since these rules 
    affect only individuals. Therefore, a regulatory flexibility analysis 
    as provided in Public Law 96-354, the Regulatory Flexibility Act, is 
    not required.
    
    Paperwork Reduction Act
    
        These regulations will impose no additional reporting and 
    recordkeeping requirements subject to Office of Management and Budget 
    clearance.
    
    (Catalog of Federal Domestic Assistance: Program No. 96.006-
    Supplemental Security Income.)
    
    List of Subjects in 20 CFR Part 416
    
        Administrative practice and procedure, Aged, Blind, Disability 
    benefits, Public assistance programs, Reporting and Recordkeeping 
    Requirements, Supplemental Security Income (SSI).
    
        Approved: November 27, 1995.
    Shirley Chater,
    Commissioner of Social Security.
    
        For the reasons set out in the preamble, part 416, subpart K, of 
    chapter III of title 20 of the Code of Federal Regulations is proposed 
    to be amended as follows:
    
    PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND 
    DISABLED
    
    Subpart K--[Amended]
    
        1. The authority citation for subpart K of part 416 is revised to 
    read as follows:
    
        Authority: Secs. 702(a)(5), 1602, 1611, 1612, 1613, 1614(f), 
    1621, and 1631 of the Social Security Act; 42 U.S.C. 902(a)(5), 
    1381a, 1382, 1382a, 1382b, 1382c(f), 1382j, and 1383; sec. 211 of 
    Pub. L. 93-66 (87 Stat 154).
    
        2. Section 416.1124 is amended by revising paragraphs (c)(7) and 
    (c)(9), by removing the ``and'' at the end of paragraph (c)(15) and the 
    period at the end of paragraph (c)(16) and by adding ``; and'' at the 
    end of paragraph (c)(16) and new paragraph (c)(19) to read as follows:
    
    
    Sec. 416.1124   Unearned income we do not count.
    
    * * * * *
        (c) * * *
        (7) Alaska Longevity Bonus payments made to an individual who is a 
    resident of Alaska and who, prior to October 1, 1985: met the 25 year 
    residency requirement for receipt of such payments in effect prior to 
    January 1, 1983; and, was eligible for SSI;
    * * * * *
        (9) Any interest earned on excluded burial funds and any 
    appreciation in the value of an excluded burial arrangement which are 
    left to accumulate and become a part of the separate burial fund. (See 
    Sec. 416.1231 for an explanation of the exclusion of burial assets.) 
    This exclusion from income applies to interest earned on burial funds 
    or appreciation in the value of excluded burial arrangements which 
    occur beginning November 1, 1982, or the date you first become eligible 
    for SSI benefits, if later;
    * * * * *
        (19) Hostile fire pay received from one of the uniformed services 
    pursuant to 37 U.S.C. 310.
        3. Section 416.1161 is amended by revising paragraph (a)(12), by 
    removing the period at the end of paragraph (a)(20) and adding a semi-
    colon in its place and by adding new paragraphs (a)(23), (a)(24) and 
    (a)(25) to read as follows:
    
    
    Sec. 416.1161   Income of an ineligible spouse, ineligible parent, and 
    essential person for deeming purposes.
    
    * * * * *
        (a) * * *
        (12) Alaska Longevity Bonus payments made to an individual who is a 
    resident of Alaska and who, prior to October 1, 1985: met the 25 year 
    residency requirement for receipt of such payments in effect prior to 
    January 1, 1983; and, was eligible for SSI;
    * * * * *
        (23) Hostile fire pay received from one of the uniformed services 
    pursuant to 37 U.S.C. 310;
        (24) Impairment-related work expenses, as described in 
    Sec. 404.1576 of part 404, incurred and paid by an ineligible spouse or 
    parent, if the ineligible spouse or parent receives disability benefits 
    under title II of the Act; and
        (25) Interest earned on excluded burial funds and appreciation in 
    the value of excluded burial arrangements which are left to accumulate 
    and become part of separate burial funds, and interest accrued on and 
    left to accumulate as part of the value of 
    
    [[Page 62359]]
    excluded agreements representing the purchase of excluded burial spaces 
    (see Sec. 416.1124(c) (9) and (15)).
    * * * * *
    [FR Doc. 95-29535 Filed 12-5-95; 8:45 am]
    BILLING CODE 4190-29-P
    
    

Document Information

Published:
12/06/1995
Department:
Social Security Administration
Entry Type:
Proposed Rule
Action:
Proposed rules.
Document Number:
95-29535
Dates:
To be sure that your comments are considered, we must receive them no later than February 5, 1996.
Pages:
62356-62359 (4 pages)
Docket Numbers:
Regulation No. 16
RINs:
0960-AE22: Income Exclusions in the SSI Program (502F)
RIN Links:
https://www.federalregister.gov/regulations/0960-AE22/income-exclusions-in-the-ssi-program-502f-
PDF File:
95-29535.pdf
CFR: (5)
20 CFR 416.1124(c)(9)
20 CFR 404.1576
20 CFR 416.1124
20 CFR 416.1161
20 CFR 416.1231