Supplemental Security Income for the Aged, Blind, and Disabled; Continuation of Full Benefit Standard for Persons Temporarily Institutionalized

SOCIAL SECURITY ADMINISTRATION

20 CFR Part 416

RIN 0960-AC55

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

Continuation of Full Benefit Standard for Persons Temporarily

Institutionalized

AGENCY: Social Security Administration.

ACTION: Final rule.

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SUMMARY: These final rules are being issued to reflect section 3 of the

Employment Opportunities for Disabled Americans Act and section 9115 of

the Omnibus Budget Reconciliation Act of 1987. These statutory

provisions amended the Social Security Act (the Act) to permit certain

recipients to receive payments based on the full supplemental security

income (SSI) benefit rate for a limited period after becoming residents

of medical or psychiatric institutions.

EFFECTIVE DATE: These final rules are effective May 13, 1996.

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

Office of Regulations and Rulings, Social Security Administration, 3-B-

1 Operations Building, 6401 Security Boulevard, Baltimore, MD 21235,

(410) 965-1759.

SUPPLEMENTARY INFORMATION: SSI regulations generally require the

suspension of SSI benefits when a recipient is a resident of a public

institution throughout a month, except that the recipient may receive a

reduced benefit if he or she is a resident throughout a month in a

public or private institution where over 50 percent of the cost of care

is paid for by Medicaid. The following legislative provisions, however,

now allow for benefits based on the full SSI Federal benefit rate to

continue during months of residency in an institution under certain

circumstances.

Benefits Payable Based on Section 1611(e)(1)(E) of the Act

Section 3 of Public Law 99-643 (the Employment Opportunities for

Disabled Americans Act) added subparagraph (E) to section 1611(e)(1) of

the Act. Based on this added provision, a recipient, whose SSI

eligibility is based on section 1619 (a) or (b) of the Act for the

month preceding the first full month of residence in (1) a public

medical or psychiatric institution or (2) a public or private

institution where Medicaid is paying more than 50 percent of the cost

of care, can remain eligible for an SSI benefit based on the full

Federal benefit rate for up to 2 months after entering the institution.

This statutory provision also provides that payment is conditioned on

an agreement by the institution that these benefits are to be retained

by the recipient and cannot be used to defray the cost of institutional

care.

Section 1902(o) of the Act requires that all State Medicaid plans

provide for disregarding any SSI payments paid by reason of section

1611(e)(1)(E) or 1611(e)(1)(G) of the Act in computing the post-

eligibility contribution of the individual to the cost of care.

Therefore, if the institution is receiving Medicaid payments for the

recipients, we will rely on the agreement the institution signed with

the State Medicaid agency to ensure that this condition is met.

Benefits Payable Based on Section 1611(e)(1)(G) of the Act

Section 9115 of Public Law 100-203 (the Omnibus Budget

Reconciliation Act of 1987) added subparagraph (G) to section

1611(e)(1) of the Act. Based on this added provision, a recipient is

eligible for continued benefits for up to 3 full months after entering

the institution if the following conditions are met:

1. A physician certifies that the recipient's stay in the

institution or facility is likely not to exceed 3 months;

2. The recipient demonstrates a need to continue to maintain and

provide for the expenses of a home or other living arrangement to which

he or she may return after leaving the facility; and

3. The recipient was eligible for Federal SSI cash benefits or

federally administered State supplementation in the month before the

month benefits would otherwise be reduced or suspended because of

residence in an institution.

The following policies implement the provisions of section

1611(e)(1)(G) of the Act.

We state in these final rules at Sec. 416.212(b) that, in order for

a recipient to be eligible for these benefits, the physician's

certification and the evidence of the need to pay home or living

arrangement expenses must be submitted to the Social Security

Administration (SSA) no later than the day of discharge or the 90th

full day of confinement, whichever is earlier. We will determine the

date of submission to be the date we receive it or, if mailed, the date

of the postmark. This time frame for submission of the needed evidence

to establish eligibility for continued payments represents what we

believe is the best balance between the statutory language and

Congressional intent that:

[[Page 10275]]

The benefits are payable ``without interruption;''

The physician's statement must be ``anticipatory'' (i.e.,

based on an expectation rather than accomplished fact); and,

The Commissioner will assist recipients in establishing

eligibility for the payments.

We will encourage recipients to submit the necessary evidence as early

as possible to facilitate our administration of the provision.

Section 1611(e)(1)(H) allows, but does not require, the

Commissioner to enter into agreements with outside agencies and

organizations for making the determinations required under section

1611(e)(1)(G) or for providing information or assistance in connection

with making such determinations. We are not exercising the option at

this time.

Final Rules Applicable to Both Categories of Benefits

These final rules include the following policy provisions that are

applicable to both categories of benefits:

1. We will compute a recipient's benefits under sections

1611(e)(1)(E) and 1611(e)(1)(G) of the Act on the basis of the

permanent living arrangement used to compute benefits for the month

immediately prior to the first month the recipient is otherwise subject

to suspension under Sec. 416.1325 or subject to a reduced benefit

amount under Sec. 416.414 because of residence in an institution. All

the Federal income provisions (including living arrangements, in-kind

support and maintenance, and deeming) applicable to the recipient's

permanent living arrangement will continue to apply for the period in

which benefits are payable while in the institution. This also means

that we will compute the benefits as an eligible couple (instead of as

two eligible individuals) for months in which either benefit is being

paid to one member of the couple.

Section 1611(e)(1)(E) of the Act originally was interpreted and

implemented as requiring the computation of benefits under section

1611(e)(1)(E) to be based on a living arrangement in the institution.

Under such an interpretation, the section 1611(e)(1)(E) benefits were

not subject to the in-kind support and maintenance and deeming of

income provisions that applied before the person was institutionalized

and which apply when computing benefits under section 1611(e)(1)(G).

This computation could increase the benefits paid under section

1611(e)(1)(E) as compared to the benefits paid prior to

institutionalization. To ensure the payment of section 1611(e)(1)(E)

benefits comparable to those paid before institutionalization (and

comparable to benefits payable under section 1611(e)(1)(G)), as of the

effective date of the final regulations, benefits under section

1611(e)(1)(E) will be computed based on the living arrangement existing

prior to institutionalization. Thus, all Federal living arrangement,

in-kind support and maintenance, and deeming provisions will continue

to apply for up to the first 2 full months of institutionalization.

We are delaying the effective date of the final rules for 60 days

after publication in the Federal Register in order to avoid a notice

problem for those individuals who already have been notified of section

1611(e)(1)(E) benefit amounts calculated under our prior practice. If

the effective date were not delayed, those individuals whose first full

month of institutionalization is the month in which the regulations are

published and who have one remaining month of eligibility under section

1611(e)(1)(E) would not be notified timely that their benefits would be

computed differently for each of the 2 months under section

1611(e)(1)(E). For those individuals, benefits for their first full

month of institutionalization will be computed based on a living

arrangement in the institution. Benefits for the second full month of

institutionalization will be computed based on the living arrangement

existing prior to institutionalization. The delayed effective date of

the final rules will enable us to timely notify our field offices of

the regulatory change, and will provide field office personnel with

sufficient time to identify and notify the affected individuals before

the effective date of the change.

We also are amending the rules on temporary absence from a living

arrangement at Sec. 416.1149 to show that these recipients are

``temporarily absent'' from their permanent living arrangement. This

living arrangement as a computation basis will not extend past the last

month that section 1611(e)(1)(E) or section 1611(e)(1)(G) benefits are

payable or, if the recipient is discharged in the month following the

last month of eligibility for section 1611(e)(1)(E) or section

1611(e)(1)(G) benefits, past the date of discharge. In the event the

recipient remains institutionalized and becomes eligible for a reduced

benefit, the temporary absence ends, and we will consider the

institution as the permanent living arrangement. The computation basis

will no longer include factors (e.g., deemed income) which were

applicable in the recipient's last permanent living arrangement.

We are amending Secs. 416.1147, 416.1149, and 416.1167 to reflect

the temporary absence rules applicable to the treatment of in-kind

support and maintenance and deeming of income and resources for these

two types of benefits. We are also amending Secs. 416.410, 416.412,

416.413, and 416.414 both to reference the extension of full benefit

eligibility to institutionalized recipients under sections

1611(e)(1)(E) and 1611(e)(1)(G) and to update and include the full

Federal yearly benefit rate applicable in recent years to an eligible

individual, qualified individual, and an eligible couple. In

Sec. 416.212(a)(1), we substituted the word ``under'' for the phrase

``for benefits based on'' because an individual who is eligible under

section 1619(b) of the Act does not receive cash benefits, but only

acquires a special eligibility status for purposes of establishing or

maintaining eligibility for Medicaid.

2. The new Secs. 416.212(a)(2) and 416.212(c) state the policy

barring reimbursement to an institution for a recipient's current

maintenance (excepting, of course, reimbursement of expenditures for

personal needs) from the benefits authorized under section

1611(e)(1)(E) and section 1611(e)(1)(G) of the Act.

Section 1611(e)(1)(E) prohibits payment of benefits unless the

institution agrees to permit the recipient to retain any benefits paid

under this section. If the institution is receiving Medicaid payments

for the recipient, we rely on the agreement the institution signed with

the State Medicaid agency to ensure this condition is enforced.

However, section 1611(e)(1)(G) does not specifically require that the

recipient be permitted to retain the benefits payable under that

section, as does section 1611(e)(1)(E). The legislative history is

clear, however, that Congress intended that the benefits payable under

section 1611(e)(1)(G) be available for maintenance of the recipient's

home or living arrangement and not for paying the institution for the

cost of the recipient's current maintenance except reimbursement of

expenditures for personal needs. Moreover, as noted above, section

1902(o) of the Act requires that all State Medicaid plans provide for

disregarding any SSI payments paid by reason of section 1611(e)(1)(E)

or 1611(e)(1)(G) of the Act in computing the post-eligibility

contribution of the individual to the cost of care. Consequently, to

permit institutions to secure these benefits would appear to negate the

purpose of

[[Page 10276]]

the legislation and, in the case of Medicaid institutions, to be in

conflict with section 1902(o) of the Act. Based on this intent and

section 1902(o), we are extending the prohibition on the payment of

benefits to, or the use of benefits by, an institution to defray

current maintenance costs, except personal needs items, to benefits

payable under section 1611(e)(1)(G). This prohibition concerning

benefits payable under the two sections will be implemented as follows.

In view of Congressional intent that benefits payable under

sections 1611(e)(1)(E) and 1611(e)(1)(G) of the Act be used for meeting

expenses outside the institution, the new Secs. 412.212(a)(2) and

416.212(c) provide that an institution must allow the recipient to

retain those benefits. The institution can only be reimbursed for

nominal costs it may have incurred for the recipient's personal needs

such as personal hygiene items, snacks, and candy to the extent not

covered by Medicaid. We believe that payment to the institution for

these costs is not inconsistent with sections 1611(e)(1)(E) and

1611(e)(1)(G). However, reimbursement is not permitted beyond personal

needs.

The current Sec. 416.640(c) prohibits a representative payee from

reimbursing an institution from SSI benefits for the current

maintenance costs of an institutionalized recipient when Medicaid pays

to the institution more than 50 percent of the cost of the individual's

care. In the previously published notice of proposed rulemaking, we had

proposed to amend Sec. 416.640 (b) and (c) to repeat the prohibition on

reimbursement for current maintenance costs (with the exception of

personal needs) for recipients who are receiving benefits payable under

sections 1611(e)(1)(E) and 1611(e)(1)(G). However, to avoid unnecessary

duplication, we have revised Sec. 416.640 (b) and (c) in these final

regulations simply to include cross references in those sections to the

new Sec. 416.212.

3. We are amending Sec. 416.2040 to reflect that for States whose

supplementation programs are federally administered under the authority

of section 1616(a) of the Act and/or section 212 of Public Law 93-66,

institutionalized recipients receiving benefits under either section

1611(e)(1)(E) or section 1611(e)(1)(G) can continue to be eligible to

receive the optional/mandatory State supplementary payments. In

addition, a recipient who would be eligible for benefits authorized

under Sec. 416.212 but for countable income which reduces his or her

Federal SSI benefit to zero may still be eligible to receive a

federally administered State supplementary payment. Non-federally

administered States will elect whether institutionalized beneficiaries

receiving Federal benefits under either section 1611(e)(1)(E) or

section 1611(e)(1)(G) will receive the same State supplementary payment

they received prior to the first full month of institutionalization or

the payment (if any) normally made in such circumstances.

We are extending eligibility for federally administered State

supplementation to recipients receiving benefits payable under the two

sections. With respect to federally administered optional State

supplementation, section 1616(b)(2) of the Act provides the

Commissioner with broad authority to adopt such ``. . . procedural or

other general administrative provisions, as the Commissioner of Social

Security finds necessary . . . to achieve efficient and effective

administration of both the program which he conducts under this title

and the optional State supplementation.'' The regulation at

Sec. 416.2005(d) provides similar authority for federally administered

mandatory State supplements. These authorities enable SSA to administer

statutory provisions that affect State supplementation in a fashion

fully in accord with their underlying Congressional intent. Congress,

when enacting section 1611(e)(1)(E) and section 1611(e)(1)(G), intended

that recipients not be disadvantaged financially when entering an

institution for a stay of short duration. To implement this intention,

we consider the recipient's living arrangement as not having changed

when computing the amount of the Federal benefit payable under sections

1611(e)(1)(E) and 1611(e)(1)(G). The same policies used for determining

the Federal benefit will be used to determine the State supplementary

payment. Thus, a recipient's living arrangement would not be considered

to have changed for purposes of determining the recipient's State

supplementary payment. This will ensure that the State supplementary

payments payable in the month prior to the first full month of

institutionalization will, subject to the income counting provisions,

continue through the months of institutionalization. Thus, we believe

that the policy will assist the Commissioner in achieving efficient and

effective administration of both the title XVI and State supplementary

payment programs, because continuing the State supplementary payments

will negate the need for field office intervention, with attendant

error potential.

In light of the above, it is reasonable to conclude that the

Commissioner exercise discretion and require, under the authority of

section 1616(b)(2) of the Act, States, whose State supplementary

payments are federally administered, to continue to supplement the full

benefit rate payable for months of hospitalization under both section

1611(e)(1)(E) and section 1611(e)(1)(G).

4. We are also amending Sec. 416.1325 of subpart M in part 416 to

show that benefits will not be suspended for months of residency in a

public institution if the recipient is eligible for benefits payable

under section 1611(e)(1)(E) or section 1611(e)(1)(G) of the Act for

those months. However, this amended rule is not being included in these

regulations and, instead, will be separately published as an interim

final rule in final regulations which recodify Subpart M entitled:

``Suspensions, Terminations, and Advance Notice of Unfavorable

Determinations.''

On September 28, 1992, we published a notice of proposed rulemaking

(NPRM) at 57 FR 44519 reflecting the provisions of the Employment

Opportunities for Disabled Americans Act and the Omnibus Budget

Reconciliation Act of 1987 that are described above. We received two

comments on the proposed regulations from State mental health agencies,

both of which endorsed the regulatory changes. Therefore, the proposed

rules are adopted as final regulations. However, we have made a number

of minor, nonsubstantive changes to the rules as written in the NPRM,

including updates on the amount of benefits payable, the change to

Sec. 416.640 which is discussed above, and a correction to a cross

reference to reflect the numerical redesignation of a section. We also

have deleted the benefit amounts payable in the years prior to 1994

since such information is generally not needed by the public.

Regulatory Procedures

Executive Order 12866

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

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

significant regulatory action under Executive Order 12866. Thus, they

were not subject to OMB review.

Paperwork Reduction Act

These final regulations contain information collection requirements

in Secs. 416.212(b)(1)(iii) and

[[Page 10277]]

416.212(b)(1)(iv). The Social Security Administration would normally

request clearance of this requirement (under the Paperwork Reduction

Act) by the Office of Management and Budget (OMB). However, we are not

doing so in this situation because we have already obtained OMB

clearance to collect this information under OMB control number 0960-

0516.

Public reporting burden for each of these collections of

information is estimated to average 5 minutes per response. This

includes the time it will take to read the instructions, gather the

necessary facts, and provide the information requested. The respondents

to the collection in paragraph (b)(1)(iii) will be physicians. The

respondents to the requirement in paragraph (b)(1)(iv) will be

recipients of SSI payments. We estimate that 60,000 people will provide

this information yearly. The total annual burden for both information

collections is therefore estimated to be 5,000 hours.

Regulatory Flexibility Act

We certify that these final regulations will not have a significant

economic impact on a substantial number of small entities because they

affect 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. 93.807,

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, Social security.

Dated: February 28, 1996.

Shirley Chater,

Commissioner of Social Security.

For the reasons set forth in the preamble, subparts B, D, F, K, and

T of part 416 of chapter III of title 20 of the Code of Federal

Regulations are amended as follows:

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

DISABLED

Subpart B--Eligibility

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

read as follows:

Authority: Secs. 702(a)(5), 1110(b), 1602, 1611, 1614, 1615(c),

1619(a), 1631, and 1634 of the Social Security Act (42 U.S.C.

902(a)(5), 1310(b), 1381a, 1382, 1382c, 1382d(c), 1382h(a), 1383,

and 1383c); secs. 211 and 212, Pub. L. 93-66, 87 Stat. 154 and 155

(42 U.S.C. 1382 note); sec. 502(a), Pub. L. 94-241, 90 Stat. 268 (48

U.S.C. 1681 note); sec. 2, Pub. L. 99-643, 100 Stat. 3574 (42 U.S.C.

1382h note).

2. Section 416.202 is amended by revising paragraph (b)(4) to read

as follows:

Sec. 416.202 Who may get SSI benefits.

* * * * *

(b) * * *

(4) A child of armed forces personnel living overseas as described

in Sec. 416.216.

* * * * *

3. Section 416.211 is amended by revising paragraphs (a)(1) and (b)

to read as follows:

Sec. 416.211 You are a resident of a public institution.

(a) General rule. (1) Subject to the exceptions described in

paragraphs (b), (c), and (d) of this section and Sec. 416.212, you are

not eligible for SSI benefits for any month throughout which you are a

resident of a public institution as defined in Sec. 416.201. In

addition, if you are a resident of a public institution when you apply

for SSI benefits and meet all other eligibility requirements, you

cannot be eligible for benefits until the day of your release from the

institution. The amount of your SSI benefits for the month of your

release will be prorated (see subpart D of this part) beginning with

the date of your release.

* * * * *

(b) Exception--SSI benefits payable at a reduced rate. You may be

eligible for SSI benefits at a reduced rate described in Sec. 416.414,

if--

(1)(i) The public institution in which you reside throughout a

month is a medical care facility for which Medicaid (title XIX of the

Social Security Act) pays a substantial part (more than 50 percent) of

the cost of your care; or

(ii) You reside for part of a month in a public institution and the

rest of the month in a public institution or private medical facility

where Medicaid pays more than 50 percent of the cost of your care; and

(2) You are ineligible in that month for a benefit described in

Sec. 416.212 that is payable to a person temporarily confined in a

medical facility.

* * * * *

Secs. 416.212-416.215 [Redesignated as Secs. 416.213-416.216]

4. Sections 416.212 through 416.215 are redesignated as

Secs. 416.213 through 416.216 respectively and a new Sec. 416.212 is

added to read as follows:

Sec. 416.212 Continuation of full benefits in certain cases of medical

confinement.

(a) Benefits payable under section 1611(e)(1)(E) of the Social

Security Act. Subject to eligibility and regular computation rules (see

subparts B and D of this part), you are eligible for the benefits

payable under section 1611(e)(1)(E) of the Social Security Act for up

to 2 full months of medical confinement during which your benefits

would otherwise be suspended because of residence in a public

institution or reduced because of residence in a public or private

institution where Medicaid pays over 50 percent of the cost of your

care if--

(1) You were eligible under either section 1619(a) or section

1619(b) of the Social Security Act in the month before the first full

month of residence in an institution;

(2) The institution agrees that no portion of these benefits will

be paid to or retained by the institution excepting nominal sums for

reimbursement of the institution for any outlay for a recipient's

personal needs (e.g., personal hygiene items, snacks, candy); and

(3) The month of your institutionalization is one of the first 2

full months of a continuous period of confinement.

(b) Benefits payable under section 1611(e)(1)(G) of the Social

Security Act. (1) Subject to eligibility and regular computation rules

(see subparts B and D of this part), you are eligible for the benefits

payable under section 1611(e)(1)(G) of the Social Security Act for up

to 3 full months of medical confinement during which your benefits

would otherwise be suspended because of residence in a public

institution or reduced because of residence in a public or private

institution where Medicaid pays over 50 percent of the cost if--

(i) You were eligible for SSI cash benefits and/or federally

administered State supplementary payments for the month immediately

prior to the first full month you were a resident in such institution;

(ii) The month of your institutionalization is one of the first 3

full months of a continuous period of confinement;

(iii) A physician certifies, in writing, that you are not likely to

be confined for longer than 90 full consecutive days following the day

you entered the institution, and the certification is submitted to SSA

no later than the day of discharge or the 90th full day of confinement,

whichever is earlier; and

(iv) You need to pay expenses to maintain the home or living

arrangement to which you intend to return after institutionalization

and

[[Page 10278]]

evidence regarding your need to pay these expenses is submitted to SSA

no later than the day of discharge or the 90th full day of confinement,

whichever is earlier.

(2) We will determine the date of submission of the evidence

required in paragraphs (b)(1) (iii) and (iv) of this section to be the

date we receive it or, if mailed, the date of the postmark.

(c) Prohibition against using benefits for current maintenance. If

the recipient is a resident in an institution, the recipient or his or

her representative payee will not be permitted to pay the institution

any portion of benefits payable under section 1611(e)(1)(G) excepting

nominal sums for reimbursement of the institution for any outlay for

the recipient's personal needs (e.g., personal hygiene items, snacks,

candy). If the institution is the representative payee, it will not be

permitted to retain any portion of these benefits for the cost of the

recipient's current maintenance excepting nominal sums for

reimbursement for outlays for the recipient's personal needs.

Subpart D--Amount of Benefits

5. The authority citation for subpart D of part 416 is continues to

read as follows:

Authority: Secs. 702(a)(5), 1611 (a), (b), (c), and (e), 1612,

1617, and 1631 of the Social Security Act (42 U.S.C. 902(a)(5), 1382

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

6. Section 416.410 is revised to read as follows:

Sec. 416.410 Amount of benefits; eligible individual.

The benefit under this part for an eligible individual (including

the eligible individual receiving benefits payable under the

Sec. 416.212 provisions) who does not have an eligible spouse, who is

not subject to either benefit suspension under Sec. 416.1325 or benefit

reduction under Sec. 416.414, and who is not a qualified individual (as

defined in Sec. 416.221) shall be payable at the rate of $5,640 per

year ($470 per month) effective for the period beginning January 1,

1996. This rate is the result of a 2.6 percent cost-of-living

adjustment (see Sec. 416.405) to the December 1995 rate. For the period

January 1, through December 31, 1995, the rate payable, as increased by

the 2.8 percent cost-of-living adjustment, was $5,496 per year ($458

per month). For the period January 1, through December 31, 1994, the

rate payable, as increased by the 2.6 percent cost-of-living

adjustment, was $5,352 per year ($446 per month). The monthly rate is

reduced by the amount of the individual's income which is not excluded

pursuant to subpart K of this part.

7. Section 416.412 is revised to read as follows:

Sec. 416.412 Amount of benefits; eligible couple.

The benefit under this part for an eligible couple (including

couples where one or both members of the couple are receiving benefits

payable under the Sec. 416.212 provisions), neither of whom is subject

to suspension of benefits based on Sec. 416.1325 or reduction of

benefits based on Sec. 416.414 nor is a qualified individual (as

defined in Sec. 416.221) shall be payable at the rate of $8,460 per

year ($705 per month), effective for the period beginning January 1,

1996. This rate is the result of a 2.6 percent cost-of-living

adjustment (see Sec. 416.405) to the December 1995 rate. For the period

January 1, through December 31, 1995, the rate payable, as increased by

the 2.8 percent cost-of-living adjustment, was $8,224 per year ($687

per month). For the period January 1, through December 31, 1994, the

rate payable, as increased by the 2.6 percent cost-of-living

adjustment, was $8,028 per year ($669 per month). The monthly rate is

reduced by the amount of the couple's income which is not excluded

pursuant to subpart K of this part.

8. Section 416.413 is revised to read as follows:

Sec. 416.413 Amount of benefits; qualified individual.

The benefit under this part for a qualified individual (defined in

Sec. 416.221) is payable at the rate for an eligible individual or

eligible couple plus an increment for each essential person (defined in

Sec. 416.222) in the household, reduced by the amount of countable

income of the eligible individual or eligible couple as explained in

Sec. 416.420. A qualified individual will receive an increment of

$2,820 per year ($235 per month), effective for the period beginning

January 1, 1996. This rate is the result of the 2.6 percent cost-of-

living adjustment (see Sec. 416.405) to the December 1995 rate, and is

for each essential person (as defined in Sec. 416.222) living in the

household of a qualified individual. (See Sec. 416.532.) For the period

January 1, through December 31, 1995, the rate payable, as increased by

the 2.8 percent cost-of-living adjustment, was $2,748 per year ($229

per month). For the period January 1, through December 31, 1994, the

rate payable, as increased by the 2.6 percent cost-of-living

adjustment, was $2,676 per year ($223 per month). The total benefit

rate, including the increment, is reduced by the amount of the

individual's or couple's income that is not excluded pursuant to

subpart K of this part.

9. Section 416.414 is amended by revising the introductory text of

paragraph (a) to read as follows:

Sec. 416.414 Amount of benefits; eligible individual or eligible

couple in a medical care facility.

(a) General rule. Except where the Sec. 416.212 provisions provide

for payment of benefits at the rates specified under Secs. 416.410 and

416.412, reduced SSI benefits are payable to persons and couples who

are in medical care facilities where more than 50 percent of the cost

of their care is paid by a State plan under title XIX of the Social

Security Act (Medicaid). This reduced SSI benefit rate also applies to

persons who are in medical care facilities where more than 50 percent

of the cost would have been paid by an approved Medicaid State plan but

for the application of section 1917(c) of the Social Security Act due

to a transfer of assets for less than fair market value. Persons and

couples to whom these reduced benefits apply are--

* * * * *

Subpart F--Representative Payment

10. 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)).

11. Section 416.640 is amended by revising paragraphs (b) and (c)

to read as follows:

Sec. 416.640 Use of benefit payments.

* * * * *

(b) Institution not receiving Medicaid funds on beneficiary's

behalf. If a beneficiary is receiving care in a Federal, State, or

private institution because of mental or physical incapacity, current

maintenance will include the customary charges for the care and

services provided by an institution, expenditures for those items which

will aid in the beneficiary's recovery or release from the institution,

and nominal expenses for personal needs (e.g., personal hygiene items,

snacks, candy) which will improve the beneficiary's condition. Except

as provided under Sec. 416.212, there is no restriction in using SSI

benefits for a beneficiary's current maintenance in an institution. Any

payments remaining from SSI benefits may be used for a temporary period

to maintain the

[[Page 10279]]

beneficiary's residence outside of the institution unless a physician

has certified that the beneficiary is not likely to return home.

Example: A hospitalized disabled beneficiary is entitled to a

monthly benefit of $264. The beneficiary, who resides in a boarding

home, has resided there for over 6 years. It is doubtful that the

beneficiary will leave the boarding home in the near future. The

boarding home charges $215 per month for the beneficiary's room and

board.

The beneficiary's representative payee pays the boarding home

$215 (assuming an unsuccessful effort was made to negotiate a lower

rate during the beneficiary's absence) and uses the balance to

purchase miscellaneous personal items for the beneficiary. There are

no benefits remaining which can be conserved on behalf of the

beneficiary. The payee's use of the benefits is consistent with our

guidelines.

(c) Institution receiving Medicaid funds on beneficiary's behalf.

Except in the case of a beneficiary receiving benefits payable under

Sec. 416.212, if a beneficiary resides throughout a month in an

institution that receives more than 50 percent of the cost of care on

behalf of the beneficiary from Medicaid, any payments due shall be used

only for the personal needs of the beneficiary and not for other items

of current maintenance.

Example: A disabled beneficiary resides in a hospital. The

superintendent of the hospital receives $30 per month as the

beneficiary's payee. The benefit payment is disbursed in the

following manner, which would be consistent with our guidelines:

Miscellaneous canteen items........................................ $10

Clothing........................................................... 15

Conserved for future needs of the beneficiary...................... 5

* * * * *

Subpart K--Income

12. 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).

13. Section 416.1147 is amended by revising paragraphs (b) and (d)

to read as follows:

Sec. 416.1147 How we value in-kind support and maintenance for a

couple.

* * * * *

(b) One member of a couple lives in another person's household and

receives food and shelter from that person and the other member of the

couple is in a medical institution. (1) If one of you is living in the

household of another person who provides you with both food and

shelter, and the other is temporarily absent from the household as

provided in Sec. 416.1149(c)(1) (in a medical institution that receives

substantial Medicaid payments for his or her care (Sec. 416.211(b))),

and is ineligible in the month for either benefit payable under

Sec. 416.212, we compute your benefits as if you were separately

eligible individuals (see Sec. 416.414(b)(3)). This begins with the

first full calendar month that one of you is in the medical

institution. The one living in another person's household is eligible

at an eligible individual's Federal benefit rate and one-third of that

rate is counted as income not subject to any income exclusions. The one

in the medical institution cannot receive more than the reduced benefit

described in Sec. 416.414(b)(3)(i).

(2) If the one member of the couple in the institution is eligible

for one of the benefits payable under the Sec. 416.212 provisions, we

compute benefits as a couple at the rate specified under Sec. 416.412.

However, if that one member remains in the institution for a full month

after expiration of the period benefits based on Sec. 416.212 can be

paid, benefits will be computed as if each person were separately

eligible as described under paragraph (c)(1) of this section. This

begins with the first calendar month after expiration of the period

benefits based on Sec. 416.212 can be paid.

* * * * *

(d) One member of a couple is subject to the presumed value rule

and the other member is in a medical institution.

(1) If one of you is subject to the presumed value rule and the

other is temporarily absent from the household as provided in

Sec. 416.1149(c)(1) (in a medical institution that receives substantial

Medicaid payments for his or her care (Sec. 416.211(b))), and is

ineligible in that month for either benefit payable under Sec. 416.212,

we compute your benefits as if both members of the couple are

separately eligible individuals (see Sec. 416.414(b)(3)). This begins

with the first full calendar month that one of you is in the medical

institution (see Sec. 416.211(b)). We value any food, clothing, or

shelter received by the one outside of the medical institution at one-

third of an eligible individual's Federal benefit rate, plus the amount

of the general income exclusion (Sec. 416.1124(c)(12)), unless you can

show that their value is less as described in Sec. 416.1140(a)(2). The

member of the couple in the medical institution cannot receive more

than the reduced benefit described in Sec. 416.414(b)(3)(i).

(2) If one of you is subject to the presumed value rule and the

other in the institution is eligible for one of the benefits payable

under Sec. 416.212, we compute the benefits as a couple at the rate

specified under Sec. 416.412. However, if the one in the institution

remains in the institution after the period benefits based on

Sec. 416.212 can be paid, we will compute benefits as if each member of

the couple were separately eligible as described in paragraph (d)(1) of

this section.

14. Section 416.1149 is amended by revising paragraphs (a) and

(c)(1) to read as follows:

Sec. 416.1149 What is a temporary absence from your living

arrangement.

(a) General. A temporary absence may be due to employment,

hospitalization, vacations, or visits. The length of time an absence

can be temporary varies depending on the reason for your absence. For

purposes of valuing in-kind support and maintenance under

Secs. 416.1130 through 416.1148, we apply the rules in this section. In

general, we will find a temporary absence from your permanent living

arrangement if you (or you and your eligible spouse)-

(1) Become a resident of a public institution, or a public or

private medical care facility where over 50 percent of the cost of care

is paid by Medicaid, and are eligible for the benefits payable under

Sec. 416.212; or

(2) Were in your permanent living arrangement for at least 1 full

calendar month prior to the absence and intend to, and do, return to

your permanent living arrangement in the same calendar month in which

you (or you and your spouse) leave, or in the next month.

* * * * *

(c) Rules for temporary absence in certain circumstances.

(1)(i) If you enter a medical care facility that receives

substantial Medicaid payments for your care (as described in

Sec. 416.211(b)) and you are not eligible for either benefit payable

under Sec. 416.212 (and you have not received such benefits during your

current period of confinement) and you intend to return to your prior

living arrangement (and you are eligible for the reduced benefits

payable under Sec. 416.414 for full months in the facility), we

consider this a temporary absence regardless of the length of your stay

in the facility. We use the rules that apply to your permanent living

arrangement to value any food, clothing, or shelter you receive during

the month (for which reduced benefits under Sec. 416.414 are not

payable) you enter or leave the facility.

[[Page 10280]]

During any full calendar month you are in the medical care facility,

you cannot receive more than the Federal benefit rate described in

Sec. 416.414(b)(1). We do not consider food or shelter provided during

a medical confinement to be income.

(ii) If you enter a medical care facility and you are eligible for

either benefit payable under Sec. 416.212, we also consider this a

temporary absence from your permanent living arrangement. We use the

rules that apply to your permanent living arrangement to value any

food, clothing, or shelter you receive during the month you enter the

facility and throughout the period you are eligible for these benefits.

We consider your absence to be temporary through the last month

benefits under Sec. 416.212 are paid unless you are discharged from the

facility in the following month. In that case, we consider your absence

to be temporary through the date of discharge.

* * * * *

15. Section 416.1167 is amended by revising paragraph (a) to read

as follows:

Sec. 416.1167 Temporary absences and deeming rules.

(a) General. During a temporary absence, we continue to consider

the absent person a member of the household. A temporary absence occurs

when--

(1) You, your ineligible spouse, parent, or an ineligible child

leaves the household but intends to and does return in the same month

or the month immediately following; or

(2) You enter a medical care facility and are eligible for either

benefit payable under Sec. 416.212. We consider your absence to be

temporary through the last month benefits under Sec. 416.212 were paid

unless you were discharged from the facility in the following month. In

that case, we consider your absence to be temporary through the date of

discharge.

* * * * *

Subpart T--State Supplementation Provisions; Agreement; Payments

16. The authority citation for subpart T of part 416 continues to

read as follows:

Authority: Secs. 702(a)(5), 1616, 1618, and 1631 of the Social

Security Act (42 U.S.C. 902(a)(5), 1382e, 1382g, and 1383); sec.

212, Pub. L. 93-66, 87 Stat. 155 (42 U.S.C. 1382 note); sec. 8 (a),

(b)(1)-(b)(3), Pub. L. 93-233, 87 Stat. 956 (7 U.S.C. 612c note,

1431 note and 42 U.S.C. 1382e note); secs. 1 (a)-(c) and 2(a),

2(b)(1), 2(b)(2), Pub. L. 93-335, 88 Stat. 291 (42 U.S.C. 1382 note,

1382e note).

17. Section 416.2040 is amended by revising paragraph (a) and

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

Sec. 416.2040 Limitations on eligibility.

* * * * *

(a) Inmate of public institution. A person who is a resident in a

public institution for a month, is ineligible for a Federal benefit for

that month under the provision of Sec. 416.211(a), and does not meet

the requirements for any of the exceptions in Sec. 416.211 (b), (c), or

(d), or Sec. 416.212, also shall be ineligible for a federally

administered State supplementary payment for that month.

* * * * *

(c) Recipient eligible for benefits under Sec. 416.212. A recipient

who is institutionalized and is eligible for either benefit payable

under Sec. 416.212 for a month or months may also receive federally

administered State supplementation for that month. Additionally, a

recipient who would be eligible for benefits under Sec. 416.212 but for

countable income which reduces his or her Federal SSI benefit to zero,

may still be eligible to receive federally administered State

supplementation.

[FR Doc. 96-5705 Filed 3-12-96; 8:45 am]

BILLING CODE 4190-29-P