2010-22179. Improvements to the Supplemental Security Income Program-Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act)

AGENCY:

Social Security Administration.

ACTION:

Final rule.

SUMMARY:

We are revising our regulations to incorporate improvements to the Supplemental Security Income (SSI) program made by the HEART Act. The HEART Act changes the way we treat certain cash payments to members of the uniformed services and veterans and the way we treat cash and in-kind payments to AmeriCorps volunteers. In addition, we are making a technical change to our rules to reflect the correct section of the Internal Revenue Code.

DATES:

These final rules are effective September 7, 2010.

FOR FURTHER INFORMATION CONTACT:

Eric Skidmore, Office of Income Security Programs, Social Security Administration, 6401 Security Boulevard, Baltimore, MD 21235-6401, [phone]. For information on eligibility or filing for benefits, call our national toll-free number, 1-800-772-1213 or TTY 1-800-325-0778, or visit our Internet site, Social Security Online, at http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Electronic Version

The electronic file of this document is available on the date of publication in the Federal Register at http://www.gpoaccess.gov/​fr/​index.html.

Background

We are revising our regulations to incorporate changes to the SSI program made by sections 201-203 of the HEART Act, Public Law 110-245. The HEART Act amended the SSI program with respect to SSI benefits payable on or after September 1, 2008 by:

• Treating certain cash payments to members of the uniformed services as earned income, generally providing a higher SSI benefit (section 201(a) of the HEART Act);
• Excluding from countable income and resources certain annuity payments paid by a State (section 202 of the HEART Act); and,
• Excluding any cash or in-kind benefit provided by AmeriCorps State and National and AmeriCorps National Civilian Community Corps (NCCC) from countable income for SSI eligibility and benefit determinations (section 203 of the HEART Act).

The primary goal of the SSI program is to ensure a minimum level of income to persons who are aged 65 or older, blind, or disabled and who have limited income and resources. The law provides that SSI payments can be made only to persons who have income and resources below specified amounts. Therefore, income and resources are major factors in deciding SSI eligibility and the amount of any SSI payments.

The HEART Act changes the way we apply our earned income, unearned income, and resource exclusion rules to uniformed services personnel, veterans and their spouses, and AmeriCorps participants. Under the HEART Act, some payments that we previously counted as unearned income now count as earned income, and some payments are excluded altogether for purposes of SSI eligibility and benefit determinations. Since the changes made by the HEART Act were effective with respect to SSI benefits payable beginning on or after September 1, 2008, we have already updated our operational instructions. We also need to update our rules in order to reflect these statutory changes.

Explanation of Changes

We are amending sections 416.1110, 416.1112, 416.1124, 416.1130(b), and 416.1210 of our rules to reflect the changes mandated by sections 201, 202, and 203 of the HEART Act. In addition, we are making a technical change to section 416.1110(c) to reflect the correct section of the Internal Revenue Code.

Uniformed Services Special Pay and Allowances

Before the HEART Act, we treated some non-wage cash payments to uniformed service members, i.e., the military housing allowance paid to uniformed service members who live in completely private housing, as unearned income for SSI purposes. We are revising section 416.1110 (What is earned income.) to reflect section 201 of the HEART Act and treat most cash payments to uniformed service members, including the military housing allowance for completely private housing, as earned income.

The HEART Act does not change, for SSI eligibility and benefit determinations, the way we treat:

• On-base housing and privatized military housing allowances. We count these as in-kind support and maintenance (ISM). Military service members receive a basic allowance to cover housing costs in on-base housing, privatized military housing, or completely private housing. Privatized military housing is developed and managed by private companies under agreement with the military to provide housing for service members, whereas completely private housing is not.
• Combat-related military pay. We exclude this pay for an SSI recipient from countable income, and we exclude from deeming additional types of combat-related pay beyond special pay. 37 U.S.C. 310; 20 CFR 416.1124(c)(19) and 416.1161(a)(28). We exclude from a spouse's or child's deemed income any additional pay that members of the uniformed services received because they were deployed to or served in a combat zone.

State Annuities for Blind, Aged, or Disabled Veterans

Before the HEART Act, we counted State annuity payments as income in the month received, and as a resource if retained into the following month. We are revising sections 416.1124 (Unearned income we do not count) and 416.1210 (Exclusions from resources; general) to reflect section 202 of the HEART Act and exclude, for SSI eligibility and benefit determinations, annuity payments that a State pays to a person (or his or her spouse) because the State has determined that the person is:

• A veteran; and
• Blind, disabled, or aged.

Under section 202 of the HEART Act, we exclude these payments from income for the month received and from resources beginning with the month after the month received.

AmeriCorps State and National and AmeriCorps NCCC Payments

Prior to the HEART Act, we treated cash or in-kind payments from the AmeriCorps State and National and AmeriCorps NCCC programs as countable income. We are revising sections 416.1112 (Earned income we do not count) and 416.1124 (Unearned income we do not count) to reflect section 203 of the HEART Act. For SSI eligibility and benefit determinations, we will exclude from countable income any cash or in-kind payments to program participants or on the AmeriCorps participants behalf. Such payments may include, but are not limited to: Food and shelter, stipends, living allowance payments, clothing allowances, educational awards, and payments in lieu of educational awards.

Technical Section Change

We are also updating a citation in 20 CFR 416.1110(c), which currently cites “section 43 of the Internal Revenue Code of 1954, as amended” as authority for the earned income credit. We are updating that citation to refer to section 32 of the Internal Revenue Code of 1986, as amended (26 U.S.C. 32). This change is technical in nature and does not have any substantive impact on our policies or procedures.

Regulatory Procedures

We follow the Administrative Procedure Act (APA) rulemaking procedures in 5 U.S.C. 553 when developing our regulations. The APA provides exceptions to its prior notice and public comment procedures when an agency finds that there is good cause for dispensing with such procedures because they are impracticable, unnecessary, or contrary to the public interest.

In the case of these rules, we have determined that, under 5 U.S.C. 553(b)(B), good cause exists for dispensing with the prior notice and public comment procedures for the changes we are making because all of these changes are required by the HEART Act. The statutory changes made by the HEART Act are self-implementing provisions that do not give us any discretion in implementing them. The statutory changes were effective with respect to SSI benefits payable on or after September 1, 2008, and we have been following these provisions in accordance with our operational instructions since they became effective. Therefore, we have determined that notice and opportunity for comment prior to making these changes is unnecessary.

In addition, we find good cause for dispensing with the 30-day delay in the effective date of a substantive rule, provided for by 5 U.S.C. 553(d). As explained above, we are revising our title XVI rules to reflect legislative provisions that are already in effect and that we have been applying since they became effective. Without these changes, our rules will not reflect current law or our operating policy and procedures, and thus may mislead the public. Therefore, we find that it is in the public interest to make these rules effective upon publication.

Executive Order 12866

We have consulted with the Office of Management and Budget (OMB) and determined that these final rules do not meet the criteria for a significant regulatory action under Executive Order 12866 and were not subject to OMB review.

Regulatory Flexibility Act

We certify that these final rules will not have a significant economic impact on a substantial number of small entities because they only affect individuals. Therefore, a regulatory flexibility analysis is not required under the Regulatory Flexibility Act, as amended.

Paperwork Reduction Act

These rules do not create any new or affect any existing collections and, therefore, do not require Office of Management and Budget approval under the Paperwork Reduction Act.

(Catalog of Federal Domestic Assistance Program No. 96.006, Supplemental Security Income.)

List of Subjects in 20 CFR Part 416

• Administrative practice and procedure; Reporting and recordkeeping requirements; Supplemental Security Income (SSI)

Dated: August 27, 2010.

Michael J. Astrue,

Commissioner of Social Security.

For the reasons stated in the preamble, we are amending subparts K and L of chapter III of title 20 of the Code of Federal Regulations as set forth below:

PART 416—SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND DISABLED.

Subpart K—[Amended]

1. The authority citation for subpart K of part 416 continues to read as follows:

Authority: Secs. 702(a)(5), 1602, 1611, 1612, 1613, 1614(f), 1621, 1631, and 1633 of the Social Security Act (42 U.S.C. 902(a)(5), 1381a, 1382, 1382a, 1382b, 1382c(f), 1382j, 1383, and 1383b); sec 211, Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 1382 note).

2. In §  416.1110, revise the section heading, paragraph (a) and the first sentence of paragraph (c) to read as follows:

§ 416.1110

What is earned income.

* * * * *

(a) Wages— (1) Wages paid in cash—general. Wages are what you receive (before any deductions) for working as someone else's employee. Wages are the same for SSI purposes as for the social security retirement program's earnings test. (See § 404.429(c) of this chapter.) Wages include salaries, commissions, bonuses, severance pay, and any other special payments received because of your employment.

(2) Wages paid in cash to uniformed service members. Wages paid in cash to uniformed service members include basic pay, some types of special pay, and some types of allowances. Allowances for on-base housing or privatized military housing are unearned income in the form of in-kind support and maintenance. Cash allowances paid to uniformed service members for private housing are wages.

(3) Wages paid in kind. Wages may also include the value of food, clothing, shelter, or other items provided instead of cash. We refer to this type of income as in-kind earned income. However, if you are a domestic or agricultural worker, the law requires us to treat your in-kind pay as unearned income.

* * * * *

(c) * * * Refunds on account of earned income credits are payments made to you under the provisions of section 32 of the Internal Revenue Code of 1986, as amended. * * *

* * * * *

3. Amend § 416.1112(c) as follows:

a. Remove the word “and” at the end of paragraph (c)(8);

b. Remove the period at the end of paragraph (c)(9) and add “; and” in its place;

c. Add paragraph (c)(10) to read as follows:

§ 416.1112

Earned income we do not count.

* * * * *

(c) * * *

(10) Payments made to participants in AmeriCorps State and National and AmeriCorps National Civilian Community Corps (NCCC). Payments to participants in AmeriCorps State and National and AmeriCorps NCCC may be made in cash or in-kind and may be made directly to the AmeriCorps participant or on the AmeriCorps participant's behalf. These payments include, but are not limited to: Living allowance payments, stipends, educational awards, and payments in lieu of educational awards.

4. Amend § 416.1124 as follows:

a. Remove the word “and” at the end of paragraph (c)(21);

b. Remove the period from the end of paragraph (c)(22) and add “; and” in its place; and

c. Add new paragraphs (c)(23) and (c)(24) to read as follows:

§ 416.1124

Unearned income we do not count.

* * * * *

(c) * * *

(23) AmeriCorps State and National and AmeriCorps National Civilian Community Corps cash or in-kind payments to AmeriCorps participants or on AmeriCorps participants' behalf. These include, but are not limited to: Food and shelter, and clothing allowances;

(24) Any annuity paid by a State to a person (or his or her spouse) based on the State's determination that the person is:

(i) A veteran (as defined in 38 U.S.C. 101); and

(ii) Blind, disabled, or aged.

5. Amend § 416.1130 by adding the following sentence to the end of paragraph (b) to read as follows:

§ 416.1130

Introduction.

* * * * *

(b) How we define in-kind support and maintenance. * * * In addition, cash payments to uniformed service members as allowances for on-base housing or privatized military housing are in-kind support and maintenance.

* * * * *

Subpart L—[Amended]

6. The authority citation for subpart L of part 416 continues to read as follows:

Authority: Secs. 702(a)(5), 1602, 1611, 1612, 1613, 1614(f), 1621, 1631, and 1633 of the Social Security Act (42 U.S.C. 902(a)(5), 1381a, 1382, 1382a, 1382b, 1382c(f), 1382j, 1383, and 1383b); sec 211, Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 1382 note).

7. Amend § 416.1210 as follows:

a. Remove the word “and” at the end of paragraph (u);

b. Remove the period from the end of paragraph (v) and add “; and” in its place; and

c. Add paragraph (w) to read as follows:

§ 416.1210

Exclusions from resources; general.

* * * * *

(w) Any annuity paid by a State to a person (or his or her spouse) based on the State's determination that the person is:

(1) A veteran (as defined in 38 U.S.C. 101); and

(2) Blind, disabled, or aged.