Supplemental Security Income for the Aged, Blind, and Disabled; Valuation of In-Kind Support and Maintenance With Cost-of-Living Adjustment

SOCIAL SECURITY ADMINISTRATION

20 CFR Part 416

RIN 0960-AD82

Supplemental Security Income for the Aged, Blind, and Disabled;

Valuation of In-Kind Support and Maintenance With Cost-of-Living

Adjustment

AGENCY: Social Security Administration.

ACTION: Notice of proposed rulemaking.

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SUMMARY: These proposed regulations would implement section 13735 of

the Omnibus Reconciliation Act of 1993 (OBRA 1993). This statutory

provision amends the Social Security Act (the Act) and requires that

the new benefit rate, as increased by a cost-of-living adjustment

(COLA), be used in determining the value of the statutory one-third

reduction and the regulatory presumed maximum value for the computation

of Federal supplemental security income (SSI) benefit payments for the

first 2 months for which the COLA is in effect. These rules will

provide that we will value the statutory one-third reduction and the

regulatory presumed maximum value using the benefit rate as increased

by a COLA to determine the amount of in-kind support and maintenance

received by an individual which is to be counted for those months. This

will preclude a decrease in the benefit amount the third month after a

COLA, a situation which occurred under the present regulations. The

legislation is effective for benefits paid for months after calendar

year 1994.

DATES: To be sure that your comments are considered, we must receive

them no later than October 10, 1995.

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 [email protected]., or delivered

to the Division of Regulations and Rulings, Social Security

Administration, 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. Comments received may be inspected during these same

hours by making arrangements with the contact person shown below.

The electronic file of this document is available on the Federal

Bulletin Board (FBB) at 9:00 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 and will remain on the FBB during the

comment period.

FOR FURTHER INFORMATION CONTACT: Lawrence V. Dudar, Legal Assistant,

Division of Regulations and Rulings, Social Security Administration,

6401 Security Boulevard, Baltimore, MD 21235, (410) 965-1759.

SUPPLEMENTARY INFORMATION: Under retrospective monthly accounting

(RMA), an individual's current SSI benefit amount is usually determined

based upon the individual's income in the second preceding month

(``budget month'') before the current month. For example, January's SSI

benefit amount is based on the individual's November income. In some

instances, an individual receives income in the form of in-kind support

and maintenance and it is counted using the value of the one-third

reduction (VTR) or the presumed maximum value (PMV) rule. Under the law

prior to the effective date of section 13735 of Public Law 103-66, the

VTR and the PMV were based on the applicable benefit rates in effect in

the ``budget month.'' Because of RMA principles, when an annual COLA to

the SSI benefit rate became effective in January, we used the VTR/PMV

amount from November of the previous year to determine the individual's

benefit for January if an individual had in-kind support and

maintenance in the ``budget month.'' For example, in figuring an

individual's January 1994 benefit, we used November 1993 as the

``budget month.'' Thus, in a computation using the VTR, we would

subtract the 1993 VTR amount of $144.66 from the 1994 benefit rate of

$446.00, giving the individual an SSI benefit of $301.34. February's

benefit amount would also be computed using the new benefit rate and

the 1993 VTR amount. However, in computing March's benefit amount, we

used the benefit rate of $446.00 less the January 1994 VTR amount of

$148.66, resulting in an SSI benefit amount of $297.34. Thus, the

individual's January and February payments exceeded the March payment

because of the increased amount of the new VTR used when January was

the ``budget month.'' Notices were then released to these individuals

notifying them of the decrease in their March payment. This was

confusing to SSI recipients because their payment amounts increased and

then decreased even if there is no change in their living arrangements.

We propose to change the method of valuation of the VTR/PMV to

reflect section 13735 of Public Law 103-66 for benefits paid after

calendar year 1994, by using the new benefit rate as increased by a

COLA in determining the VTR or PMV for the computation of SSI benefits

for the first 2 months for which the COLA is in effect. Thus, with a

COLA effective January 1, 1995, both the new increased 1995 benefit

rate and new increased VTR or PMV amounts are being used in computing a

January and February 1995 benefit amount. Unlike the example used

previously, the individual's January, February, and March payments

calculated by using the VTR amount will be the same assuming all other

income remains constant--i.e., there will be no decrease in the SSI

benefit amount the third month after a COLA. This will eliminate

confusion for recipients and also eliminate the need for issuance of

notices informing affected recipients of the decrease in their March

payment.

We state in the proposed regulations at Sec. 416.420(a) that we

will use the benefit rate, as increased by a COLA, in determining the

value of certain in-kind support and maintenance used to compute an

individual's SSI benefit amount for the first 2 months in which the

COLA is in effect. We also propose to add a third example to

Sec. 416.420(a) to further clarify the regulatory intent.

We state in the proposed regulations at Sec. 416.1130 how we value

in-kind support and maintenance when a COLA applies and have altered

the example to reflect the situation when a COLA becomes effective.

[[Page 40543]]

Regulatory Procedures

Executive Order No. 12866

We have consulted with the Office of Management and Budget (OMB)

and determined that these proposed rules do not meet the criteria for a

significant regulatory action under Executive Order 12866. Thus, they

are not subject to OMB review.

Paperwork Reduction Act of 1980

These proposed regulations impose no new reporting or recordkeeping

requirements subject to OMB clearance.

Regulatory Flexibility Act

We certify that these proposed regulations will not have a

significant economic impact on a substantial number of small entities

because they affect only individuals. Therefore, a regulatory

flexibility analysis as provided in Public Law 96-354, the Regulatory

Flexibility Act, is not required.

(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).

Dated: July 27, 1995.

Shirley Chater,

Commissioner of Social Security.

For the reasons set out in the preamble, subparts D and K of part

416 of chapter III of title 20 of the Code of Federal Regulations are

amended to read as follows:

PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND

DISABLED

Subpart D--Amount of Benefits

1. The authority citation for Part 416, Subpart D continues to read

as follows:

Authority: Secs. 1102, 1611(a), (b), (c), and (e), 1612, 1617,

and 1631 of the Social Security Act; 42 U.S.C. 1302, 1382(a), (b),

(c), and (e), 1382a, 1382f, and 1383.

2. Section 416.420 is amended by revising paragraph (a) to read as

follows:

Sec. 416.420 Determination of benefits; general.

* * * * *

(a) General rule. We generally use the amount of your countable

income in the second month prior to the current month to determine how

much your benefit amount will be for the current month. We will use the

benefit rate (see Secs. 416.410 through 416.414), as increased by a

cost-of-living adjustment, in determining the value of the one-third

reduction or the presumed maximum value, to compute your SSI benefit

amount for the first 2 months in which the cost-of-living adjustment is

in effect. If you have been receiving an SSI benefit and a Social

Security insurance benefit and the latter is increased on the basis of

the cost-of-living adjustment or because your benefit is recomputed, we

will compute the amount of your SSI benefit for January, the month of

an SSI benefit increase, by including in your income the amount by

which your social security benefit in January exceeds the amount of

your social security benefit in November. Similarly, we will compute

the amount of your SSI benefit for February by including in your income

the amount by which your social security benefit in February exceeds

the amount of your social security benefit in December.

Example 1. Mrs. X's benefit amount is being determined for

September (the current month). Mrs. X's countable income in July is

used to determine the benefit amount for September.

Example 2. Mr. Z's SSI benefit amount is being determined for

January (the current month). There has been a cost-of-living

increase in SSI benefits effective January. Mr. Z's countable income

in November is used to determine the benefit amount for January. In

November, Mr. Z had in-kind support and maintenance valued at the

presumed maximum value as described in Sec. 416.1140(a). We will use

the January benefit rate, as increased by the COLA, to determine the

value of the in-kind support and maintenance Mr. Z received in

November when we determine Mr. Z's SSI benefit amount for January.

Example 3. Mr. Y's SSI benefit amount is being determined for

January (the current month). Mr. Y has Social Security income of

$100 in November, $100 in December, and $105 in January. We find the

amount by which his Social Security income in January exceeds his

Social Security income in November ($5) and add that to his income

in November to determine the SSI benefit amount for January.

* * * * *

Subpart K--Income

3. The authority citation for part 416, subpart K continues to read

as follows:

Authority: Secs. 1102, 1602, 1611, 1612, 1613, 1614(f), 1621,

and 1631 of the Social Security Act; 42 U.S.C. 1302, 1381a, 1382,

1382a, 1382b, 1382c(f), 1382j, and 1383; sec 211 of Pub. L. 93-66,

87 Stat. 154.

4. Section 416.1130 is amended by revising paragraph (a) to read as

follows:

In-Kind Support and Maintenance

Sec. 416.1130 Introduction.

(a) General. Both earned income and unearned income include items

received in kind (Sec. 416.1102). Generally, we value in-kind items at

their current market value and we apply the various exclusions for both

earned and unearned income. However, we have special rules for valuing

food, clothing, or shelter that is received as unearned income (in-kind

support and maintenance). This section and the ones that follow discuss

these rules. In these sections (Secs. 416.1130 through 416.1148) we use

the in-kind support and maintenance you receive in the month as

described in Sec. 416.420 to determine your SSI benefit. We value the

in-kind support and maintenance using the Federal benefit rate for the

month in which you receive it. Exception: For the first 2 months for

which a cost-of-living adjustment applies, we value in-kind support and

maintenance you receive using the VTR or PMV based on the Federal

benefit rate as increased by the cost-of-living adjustment.

Example: Mr. Jones receives an SSI benefit which is computed by

subtracting one-third from the Federal benefit rate. This one-third

represents the value of the income he receives because he lives in

the household of a son who provides both food and shelter (in-kind

support and maintenance). In January, we increase his SSI benefit

because of a cost-of-living adjustment. We base his SSI payment for

that month on the food and shelter he received from his son two

months earlier in November. In determining the value of that food

and shelter he received in November, we use the Federal benefit rate

for January.

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[FR Doc. 95-19502 Filed 8-8-95; 8:45 am]

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