Supplemental Security Income for the Aged, Blind, and Disabled; Dedicated Accounts and Installment Payments for Certain Past-Due SSI Benefits

SOCIAL SECURITY ADMINISTRATION

20 CFR Part 416

[Regulations No. 16]

RIN 0960-AE59

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

Dedicated Accounts and Installment Payments for Certain Past-Due SSI

Benefits

AGENCY: Social Security Administration.

ACTION: Interim final rule with request for comments.

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SUMMARY: These regulations reflect and implement amendments to the

Social Security Act (the Act) made by sections 213 and 221 of the

Personal Responsibility and Work Opportunity Reconciliation Act of

1996. Section 213 requires the establishment of accounts in financial

institutions for the payment of past-due SSI benefits exceeding 6

months' benefits to representative payees on behalf of children under

age 18. These accounts will be dedicated for certain purposes by

restrictions on the use of such past-due benefits. Section 221 requires

past-due SSI benefits which equal or exceed 12 months' benefits to be

paid in installments, with certain exceptions.

DATES: These interim final rules are effective on December 20, 1996. To

be sure that your comments are considered, we must receive them no

later than February 18, 1997.

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 hours by

making arrangements with the contact person shown below.

FOR FURTHER INFORMATION CONTACT: Regarding this Federal Register

document--Richard M. Bresnick, Legal Assistant, Division of Regulations

and Rulings, Social Security Administration, 6401 Security Boulevard,

Baltimore, MD 21235, (410) 965-1758; regarding eligibility or filing

for benefits--our national toll-free number, 1-800-772-1213.

SUPPLEMENTARY INFORMATION: The Personal Responsibility and Work

Opportunity Reconciliation Act of 1996, Public Law (Pub. L.) 104-193,

was enacted on August 22, 1996. Section 213 of Pub. L. 104-193 amended

section 1631(a)(2) of the Act, effective for payments made after August

22, 1996, by adding a new subparagraph (F) to require the

representative payee of an eligible individual under age 18 to

establish ``an account in a financial institution'' (which we will

refer to as a ``dedicated account'') if the individual is eligible for

past-due monthly supplemental security income (SSI) benefits (including

any federally administered State supplementary payments) which (after

any withholding for interim assistance reimbursement (IAR) to States)

exceed six times the Federal Benefit Rate (FBR) plus any federally

administered State supplementation. Once the dedicated account has been

established by the representative payee for the eligible individual,

SSA will direct deposit the past-due benefits into the dedicated

account. Any subsequent past-due benefits payable which exceed six

times the FBR plus any federally administered State supplementation

also must be deposited directly by SSA into the dedicated account.

However, if the eligible individual receives subsequent past-due

benefits which are less than or equal to six times the FBR plus any

federally administered State supplementation, these past-due benefits

may be, but are not required to be, deposited into the dedicated

account by the representative payee. Other funds representing an SSI

underpayment which are equal to or greater than the Federal Benefit

Rate also may be deposited into such an account.

Section 213 provides that funds in the dedicated account are to be

used only for certain specified purposes, primarily those related to

the child's impairment(s). Under the new statutory provision, the use

of dedicated account funds for unauthorized items or services is

considered a ``misapplication'' of benefits. A representative payee who

knowingly misapplies funds from a dedicated account shall be personally

liable to the Commissioner of Social Security (the Commissioner) in an

amount equal to the amount misapplied. Section 213 also requires SSA to

establish a system to monitor representative payee activity with

respect to dedicated accounts.

Sections 213(b) and 213(c) of Pub. L. 104-193 also amended sections

1613(a) and 1612(b) of the Act, respectively, to provide an exclusion

from resources for funds in a dedicated account established and

maintained in accordance with section 1631(a)(2)(F) of the Act,

including accrued interest or other earnings thereon, and to provide an

exclusion from income for such interest and earnings.

Section 221 of Pub. L. 104-193 also affects the payment of large

SSI past-due benefits payable to SSI recipients. This statutory

provision, which is effective for past-due benefits paid on December 1,

1996 or later, amended section 1631(a) of the Act by adding a new

paragraph (10) which requires payment of large past-due benefit amounts

in installments. Prior to this provision, we paid past-due benefits

directly to the eligible individual or the representative payee in a

lump sum payment. Under the new statutory provision, past-due benefits

(including any federally administered State supplementary payments) in

an amount that (after reimbursement for IAR) equals or exceeds 12 times

the FBR plus any federally administered State

[[Page 67204]]

supplementation payable to an eligible individual (or an eligible

individual and eligible spouse), generally must be paid in

installments. Such past-due benefits will be paid in not more than 3

installments, with the first and second installment not exceeding 12

times the FBR plus any State supplementation. The installment payments

will be made at 6-month intervals.

There are two statutory exceptions for which the installment

payment requirements do not apply. They are: (1) when the individual

has a medically determinable impairment which is expected to result in

death within 12 months; or (2) when an individual is ineligible for

benefits and it is determined he or she is likely to remain ineligible

for the next 12 months.

Section 221 also provides an exception to the limitation on the

amount of the first and/or second installment payments when the

individual has certain outstanding debts or current or anticipated

expenses. The exception applies when there are: (1) outstanding debts

due to food, clothing, shelter, or medically necessary services,

supplies or equipment, or medicine; or (2) current or anticipated

expenses in the near future due to the purchase of a home, or medically

necessary services, supplies or equipment, or medicine.

The standard limitation on the first and second installment

payments may be increased by the amount of the debts or expenses

described above. This increase only applies with respect to debts or

expenses that are not subject to reimbursement by a public assistance

program, the Secretary of Health and Human Services under title XVIII

of the Act, a State plan approved under title XIX of the Act, or any

private entity that is legally liable to make payment according to an

insurance policy, prepaid plan, or other arrangement.

Explanation of Revisions

We are amending existing regulations at Secs. 416.535, 416.538,

416.542, 416.570, 416.640, 416.1124, and 416.1210 and adding new

Secs. 416.545, 416.546, and 416.1247.

We are amending Sec. 416.535 to refer to Secs. 416.545 and 416.546,

respectively, on the payment in installments of past-due benefits and

the use of dedicated accounts for the deposit of past-due benefits,

that exceed amounts determined under statutorily prescribed formulas.

We are amending Sec. 416.538 to explain that a dedicated account

must be established for the deposit of past-due benefits for

individuals under age 18 who have representative payees if the amount

of the past-due benefits meets the formula in Sec. 416.546.

We are amending Sec. 416.542 to refer to Sec. 416.545 on

installment payments for large past-due benefits and adding a paragraph

to discuss how we will pay past-due benefits when a dedicated account

is required to be established.

We are adding a new Sec. 416.545 which explains that when an

eligible individual is due past-due benefits which (after reimbursement

for IAR) equal or exceed 12 times the FBR plus any federally

administered State supplementation, the payments generally are required

to be made in installments. This section also explains the exceptions

to the installment payment requirements for certain individuals. This

section also discusses when the amount of the installment payment may

be increased due to certain outstanding debts or current or anticipated

expenses.

We also are adding a new Sec. 416.546 which explains that when an

individual under age 18 who has a representative payee is eligible for

the payment of past-due benefits in an amount (after reimbursement for

IAR) that exceeds six times the FBR plus any federally administered

State supplementation, these past-due benefits must be deposited into a

dedicated account. The new section also reflects that certain

subsequent past-due benefits and underpayments may be, but do not have

to be, deposited into the dedicated account.

We are adding a statement to the end of Sec. 416.570 that funds in

a dedicated account cannot be used to repay an overpayment under title

II or title XVI of the Act. This prohibition is based on the fact that

overpayment repayment is not among the allowable uses of dedicated

account funds listed in Sec. 416.640(e), as it is not related to the

individual's impairment.

We are adding a paragraph to Sec. 416.640 explaining when

representative payees are required to establish a dedicated account in

a financial institution into which certain past-due payments must be

deposited as described in Sec. 416.546. We also describe the types of

dedicated accounts the representative payee may establish and how they

are to be established. The allowable types of accounts are intended to

alleviate the risk of loss of principal, ensure accessibility, and

ensure representative payee accountability.

We also explain in Sec. 416.640 that funds in these accounts are to

be used only for certain specified items or services, primarily those

related to the individual's impairment. Limitations on expenditures

continue until all funds in the account are depleted or SSI eligibility

terminates. If a representative payee knowingly uses funds in the

account for unauthorized expenditures, the representative payee will be

liable to the Commissioner to repay the amount misapplied. We also

state that this amount is not an ``overpayment'' as defined in

Sec. 416.537. We also explain that the recordkeeping requirements in

Secs. 416.635 and 416.665 apply to these accounts.

Based upon the report to Congress of the National Commission on

Childhood Disability, issued October 10, 1995, we deemed it best that

our regulations not attempt to provide specific guidelines for what

items or services would be appropriate as ``impairment-related.'' The

report noted the testimony of advocates for disabled children as to the

vast array of possible impairment-related items and services.

Accordingly, the appropriateness of an expenditure will be decided on a

case-by-case basis within the context of each child's needs and

impairment(s). Therefore, in this section, we have provided broad

guidelines in this area.

We are revising Sec. 416.1124 by adding interest or other earnings

on a dedicated account which is excluded from resources to the list of

unearned income exclusions in paragraph (c).

We are revising Sec. 416.1210 by adding dedicated accounts to the

list of excluded resources.

We are adding a new Sec. 416.1247 explaining the exclusion from

resources of dedicated accounts and interest or other earnings on the

account.

Under these interim final rules, the dedicated account must be kept

separate from all other resources in order for the income and resource

exclusions to apply. No commingling of other funds in the account will

be permitted. Not only does commingling appear to be precluded by the

specified mandatory and discretionary deposits that must or may be made

into a dedicated account, but to permit commingling of other funds into

the dedicated account would impose unduly burdensome reporting and

recordkeeping requirements on representative payees. In addition, such

commingling would impose administratively time-consuming and complex

monthly proration computations on the part of SSA related to interest

and other earnings on the account. Prior administrative experience with

allowing commingling in excluded burial fund accounts led us to

prohibit commingling in such accounts based on this administrative

burden (see Sec. 416.1231(b) and 55 FR 28373 (July 11, 1990)).

[[Page 67205]]

We also explain in Sec. 416.1247 that the income and resource

exclusions continue during a period of suspension or eligibility for

which no payment is due, so long as the individual's eligibility has

not been terminated. Once eligibility terminates, previously excluded

funds may not be excluded if the individual establishes a subsequent

period of eligibility by filing a new application.

Electronic Versions

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.

Regulatory Procedures

Pursuant to section 702(a)(5) of the Act, 42 U.S.C. 902(a)(5), as

amended by section 102 of Pub. L. 103-296, SSA follows the

Administrative Procedure Act (APA) rulemaking procedures specified in 5

U.S.C. 553 in the development of its regulations. The APA provides

exceptions to its prior notice and public comment procedures when an

agency finds there is good cause for dispensing with such procedures on

the basis that they are impracticable, unnecessary, or contrary to the

public interest. We have determined that, under 5 U.S.C. 553(b)(B),

good cause exists for dispensing with the notice and public comment

procedures in this case.

Public Law 104-193 was signed into law on August 22, 1996. Section

213 was made effective on August 23, 1996, and section 221 was made

effective on December 1, 1996. Moreover, sections 215 and 222,

respectively, require the Commissioner to issue regulations as may be

necessary to carry out the amendments made by sections 213 and 221,

respectively, within 3 months after enactment (i.e., by November 22,

1996). Accordingly, to issue these rules to implement sections 213 and

221 as a notice of proposed rulemaking would have delayed issuance of

final rules until well past the statutory effective dates and

regulatory issuance deadline. Issuing these rules as interim final

rules allows us to come as close as possible to the mandated dates.

In light of the immediacy of the effective dates and the

Congressional mandate that we issue regulations needed to carry out

these statutory provisions within 3 months, we believe that, under the

APA, good cause exists for waiver of the prior notice procedures since

issuance of proposed rules would be impracticable. While we are issuing

these rules as interim final regulations, we are interested in

receiving public comments regarding the substance of these interim

rules.

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, these regulations reflect and

implement statutory provisions, one of which is effective on enactment

and one of which is effective December 1, 1996, and for which

publication of implementing regulations is required by November 22,

1996. In order for these regulations to be effective as close as

possible to the mandated dates, we find that it is in the public

interest to make these rules effective upon publication.

Executive Order 12866

These interim final rules reflect and implement the provisions of

sections 213 and 221 of Pub. L. 104-193. The Office of Management and

Budget (OMB) has reviewed these interim final rules and determined that

they meet the criteria for a significant regulatory action under

Executive Order 12866.

The administrative cost of each of the provisions is negligible

(less than $1 million annually). The provisions of section 213 will

have no impact on benefit payments. Under section 221, benefits will be

paid in installments over a period up to a year later than they would

have been paid in a lump sum.

The provisions establishing dedicated accounts are intended to

alleviate the risk of loss of principal, ensure accessibility, and

ensure representative payee accountability. The exclusion from

resources and income permits families to plan for the needs of the

child as authorized in the provisions.

Regulatory Flexibility Act

We certify that these regulations will not have a significant

economic impact on a substantial number of small entities because they

primarily affect only the small number of individuals who would receive

past-due SSI benefits that exceed the 6-month or 12-month limitation.

Therefore, a regulatory flexibility analysis as provided in Public Law

96-354, the Regulatory Flexibility Act, is not required.

Paperwork Reduction Act

These interim final rules contain a recordkeeping requirement in

Sec. 416.640(e)(3). We would normally seek approval of this requirement

from OMB under 44 U.S.C. 3507 as amended by section 2 of the Paperwork

Reduction Act of 1995. However, we are not doing so because we already

have clearance of this requirement under OMB Control No. 0960-0068.

(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, Supplemental Security Income

(SSI), Reporting and recordkeeping requirements.

Dated: November 25, 1996.

Shirley S. Chater,

Commissioner of Social Security.

For the reasons set forth in the preamble, part 416, subparts E, F,

K, and L of chapter III of title 20 of the Code of Federal Regulations

are amended as set forth below.

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

DISABLED

Subpart E--[Amended]

1. The authority citation for subpart E of part 416 continues to

read as follows:

Authority: Secs. 702(a)(5), 1601, 1602, 1611 (c) and (e), and

1631(a)-(d) and (g) of the Social Security Act (42 U.S.C. 902(a)(5),

1381, 1381a, 1382 (c) and (e), and 1383(a)-(d) and (g)).

2. Section 416.535 is amended by revising the first sentence of

paragraph (a) and adding paragraph (c) to read as follows:

Sec. 416.535 Underpayments and overpayments.

(a) General. When an individual receives SSI benefits of less than

the correct amount, adjustment is effected as described in

Secs. 416.542 and 416.543, and the additional rules in Sec. 416.545 may

apply. * * *

* * * * *

(c) Additional rules for eligible individuals under age 18 who have

a representative payee. When an eligible individual under age 18 has a

representative payee and receives less than the correct amount of SSI

benefits, the additional rules in Sec. 416.546 may apply.

* * * * *

3. Section 416.538 is amended by redesignating paragraph (d) as

paragraph (e) and adding a new paragraph (d) to read as follows:

Sec. 416.538 Amount of underpayment or overpayment.

* * * * *

[[Page 67206]]

(d) Limited delay in payment of underpaid amount to eligible

individual under age 18 who has a representative payee. When the

representative payee of an eligible individual under age 18 is required

to establish a dedicated account pursuant to Secs. 416.546 and

416.640(e), payment of past-due benefits which are otherwise due will

be delayed until the representative payee has established the dedicated

account as described in Sec. 416.640(e). Once the account is

established, SSA will deposit the past-due benefits payable directly to

the account.

* * * * *

4. Section 416.542 is amended by adding a sentence at the end of

paragraph (a)(1) and adding paragraph (a)(3) to read as follows:

Sec. 416.542 Underpayments--to whom underpaid amount is payable.

(a) Underpaid recipient alive--underpayment payable. (1) * * * If

the underpaid amount meets the formula in Sec. 416.545 and one of the

exceptions does not apply, the amount of any past-due benefits will be

paid in installments.

* * * * *

(3) If an underpaid individual under age 18 is alive and has a

representative payee and is due past-due benefits which meet the

formula in Sec. 416.546, SSA will pay the past-due benefits into the

dedicated account described in Sec. 416.640(e). If the underpaid

individual dies before the benefits have been deposited into the

account, we will follow the rules which apply to underpayments for the

payment of any unpaid amount due to any eligible survivor of a deceased

individual as described in paragraph (b) of this section.

* * * * *

5. A new Sec. 416.545 is added to read as follows:

Sec. 416.545 Paying large past-due benefits in installments.

(a) General. Except as described in paragraph (c) of this section,

when an individual is eligible for past-due benefits in an amount which

meets the formula in paragraph (b) of this section, payment of these

benefits must be made in installments. The amounts subject to payment

in installments include:

(1) Benefits due but unpaid which accrued prior to the month

payment was effectuated;

(2) Benefits due but unpaid which accrued during a period of

suspension for which the recipient was subsequently determined to have

been eligible; and

(3) Any adjustment to benefits which results in an accrual of

unpaid benefits.

(b) Installment Formula. Installment payments must be made if the

amount of the past-due benefits including any federally administered

State supplementation, after applying Sec. 416.525, equals or exceeds

12 times the Federal Benefit Rate plus any federally administered State

supplementation payable in a month to an eligible individual (or

eligible individual and eligible spouse). These installment payments

will be paid in not more than 3 installments and made at 6-month

intervals. Except as described in paragraph (d) of this section, the

amount of each of the first and second installment payments may not

exceed the threshold amount of 12 times the maximum monthly benefit

payable as described in this paragraph.

(c) Exception--When installments payments are not required.

Installment payments are not required and the rules in this section do

not apply if, when the determination of an underpayment is made, the

individual is (1) afflicted with a medically determinable impairment

which is expected to result in death within 12 months, or (2)

ineligible for benefits and we determine that he or she is likely to

remain ineligible for the next 12 months.

(d) Exception--Increased first and second installment payments. (1)

The amount of the first and second installment payments may be

increased by the total amount of the following debts and expenses:

(i) Outstanding debt for food, clothing, shelter, or medically

necessary services, supplies or equipment, or medicine; or

(ii) Current or anticipated expenses in the near future for

medically necessary services, supplies or equipment, or medicine, or

for the purchase of a home.

(2) The increase described in paragraph (d)(1) of this section only

applies to debts or expenses that are not subject to reimbursement by a

public assistance program, the Secretary of Health and Human Services

under title XVIII of the Act, a State plan approved under title XIX of

the Act, or any private entity that is legally liable for payment in

accordance with an insurance policy, pre-paid plan, or other

arrangement.

6. A new Sec. 416.546 is added to read as follows:

Sec. 416.546 Payment into dedicated accounts of past-due benefits for

eligible individuals under age 18 who have a representative payee.

For purposes of this section, amounts subject to payment into

dedicated accounts (see Sec. 416.640(e)) include the amounts described

in Sec. 416.545(a) (1), (2), and (3).

(a) For an eligible individual under age 18 who has a

representative payee and who is determined to be eligible for past-due

benefits (including any federally administered State supplementation)

in an amount which (after Sec. 416.525 is applied) exceeds six times

the Federal Benefit Rate plus any federally administered State

supplementation payable in a month, this unpaid amount must be paid

into the dedicated account established and maintained as described in

Sec. 416.640(e).

(b) After the account is established, the representative payee may

(but is not required to) deposit into the account any subsequent past-

due benefits (including any federally administered State

supplementation) which are in an amount less than that specified in

paragraph (a) of this section or any other funds representing an SSI

underpayment which is equal to or exceeds the maximum Federal Benefit

Rate.

(c) If the underpaid individual dies before all the benefits due

have been deposited into the dedicated account, we will follow the

rules which apply to underpayments for the payment of any unpaid amount

due to any eligible survivor as described in Sec. 416.542(b).

7. Section 416.570 is amended by adding a new sentence at the end

of the section to read as follows:

Sec. 416.570 Adjustment--general rule.

* * * No funds properly deposited into a dedicated account (see

Secs. 416.546 and 416.640(e)) can be used to repay an overpayment while

the overpaid individual remains subject to the provisions of those

sections.

Subpart F--[Amended]

8. The authority citation for subpart F of part 416 continues to

read as follows:

Authority: Secs. 702(a)(5), 1631(a)(2) and (d)(1) of the Social

Security Act (42 U.S.C. 902(a)(5) and 1383(a)(2) and (d)(1)).

9. Section 416.640 is amended by adding paragraph (e) to read as

follows:

Sec. 416.640 Use of benefit payments.

* * * * *

(e) Dedicated accounts for eligible individuals under age 18. (1)

When past-due benefit payments are required to be paid into a separate

dedicated account (see Sec. 416.546), the representative payee is

required to establish in a financial institution an account dedicated

to the purposes described in paragraph (e)(2) of this section. This

dedicated account may be a checking, savings or money market

[[Page 67207]]

account subject to the titling requirements set forth in Sec. 416.645.

Dedicated accounts may not be in the form of certificates of deposit,

mutual funds, stocks, bonds or trusts.

(2) A representative payee shall use dedicated account funds,

whether deposited on a mandatory or permissive basis (as described in

Sec. 416.546), for the benefit of the child and only for the following

allowable expenses--

(i) Medical treatment and education or job skills training;

(ii) If related to the child's impairment(s), personal needs

assistance; special equipment; housing modification; and therapy or

rehabilitation; or

(iii) Other items and services related to the child's impairment(s)

that we determine to be appropriate. The representative payee must

explain why or how the other item or service relates to the

impairment(s) of the child.

(3) Representative payees must keep records and receipts of all

deposits to and expenditures from dedicated accounts, and must submit

these records to us upon our request, as explained in Secs. 416.635 and

416.665.

(4) The use of funds from a dedicated account in any manner not

authorized by this section constitutes a misapplication of benefits.

These misapplied benefits are not an overpayment as defined in

Sec. 416.537; however, if we determine that a representative payee

knowingly misapplied funds in a dedicated account, that representative

payee shall be liable to us in an amount equal to the total amount of

the misapplied funds.

(5) The restrictions described in this section and the income and

resource exclusions described in Secs. 416.1124(c)(20) and 416.1247

shall continue to apply until all funds in the dedicated account are

depleted or eligibility for benefits terminates, whichever comes first.

This continuation of the restrictions and exclusions applies in

situations where funds remain in the account in any of the following

situations--

(i) A child attains age 18, continues to be eligible and receives

payments directly;

(ii) A new representative payee is appointed. When funds remaining

in a dedicated account are returned to us by the former representative

payee, the new representative payee must establish an account in a

financial institution into which we will deposit these funds, even if

the amount is less than that prescribed in Sec. 416.546; or

(iii) During a period of suspension due to ineligibility as

described in Sec. 416.1321, administrative suspension, or a period of

eligibility for which no payment is due.

Subpart K--[Amended]

10. 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, 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,

Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 1382 note).

11. Section 416.1124 is amended by removing the ``and'' at the end

of paragraph (c)(18) and the period at the end of paragraph (c)(19),

adding ``; and'' at the end of paragraph (c)(19), and adding paragraph

(c)(20) to read as follows:

Sec. 416.1124 Unearned income we do not count.

* * * * *

(c) * * *

(20) Interest or other earnings on a dedicated account which is

excluded from resources. (See Sec. 416.1247).

Subpart L--[Amended]

12. 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, 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,

Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 1382 note).

13. Section 416.1210 is amended by removing the ``and'' at the end

of paragraph (p) and the period at the end of paragraph (q), adding ``;

and'' at the end of paragraph (q), and adding paragraph (r) to read as

follows:

Sec. 416.1210 Exclusions from resources; general.

* * * * *

(r) Dedicated financial institution accounts as provided in

Sec. 416.1247.

14. A new Sec. 416.1247 is added to read as follows:

Sec. 416.1247 Exclusion of a dedicated account in a financial

institution.

(a) General. In determining the resources of an individual (or

spouse, if any), the funds in a dedicated account in a financial

institution established and maintained in accordance with

Sec. 416.640(e) will be excluded from resources. This exclusion applies

only to benefits which must or may be deposited in such an account, as

specified in Sec. 416.546, and accrued interest or other earnings on

these benefits. If these funds are commingled with any other funds

(other than accumulated earnings or interest) this exclusion will not

apply to any portion of the funds in the dedicated account.

(b) Exclusion during a period of suspension or termination. (1)

Suspension. The exclusion of funds in a dedicated account and interest

and other earnings thereon continues to apply during a period of

suspension due to ineligibility as described in Sec. 416.1321,

administrative suspension, or a period of eligibility for which no

payment is due, so long as the individual's eligibility has not been

terminated as described in Secs. 416.1331 through 416.1335.

(2) Termination. Once an individual's eligibility has been

terminated, any funds previously excluded under paragraph (a) of this

section may not be excluded if the individual establishes a subsequent

period of eligibility by filing a new application.

[FR Doc. 96-32134 Filed 12-19-96; 8:45 am]

BILLING CODE 4190-29-P