Application of State Law in Determining Child Relationship

SOCIAL SECURITY ADMINISTRATION

20 CFR Part 404

RIN 0960-AE30

Application of State Law in Determining Child Relationship

AGENCY: Social Security Administration (SSA).

ACTION: Final rules.

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SUMMARY: These final regulations revise our rules on determining

whether a natural child has inheritance rights under appropriate State

law and therefore may be entitled to Social

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Security benefits as the child of an insured worker. Specifically, they

revise our rules to explain which version of State law we will apply,

depending on whether the insured is living or deceased, how we will

apply State law requirements on time limits for determining inheritance

rights, and how we will apply State law requirements for a court

determination of paternity. They also clarify our current rule on

determining an applicant's status as a legally adopted child of an

insured individual.

EFFECTIVE DATE: These regulations are effective November 27, 1998.

FOR FURTHER INFORMATION CONTACT: Lois Berg, Legal Assistant, Office of

Process and Innovation Management, Social Security Administration, 6401

Security Boulevard, Baltimore, MD 21235, (410) 965-1713 or TTY (410)

966-5609. For information on eligibility, claiming benefits, or

coverage of earnings, call our national toll-free number, 1-800-772-

1213 or TTY 1-800-325-0778.

SUPPLEMENTARY INFORMATION:

Time for Determining Relationship of Natural Child

Section 216(h)(2)(A) of the Social Security Act (the Act) states in

part that in determining whether an applicant is the child of a

deceased insured individual, the Commissioner of Social Security (the

Commissioner) shall apply such law as would be applied in determining

the devolution of intestate personal property by the courts of the

State in which the insured individual was domiciled at the time of his

or her death.

A child of a valid marriage has inheritance rights under the laws

of all States. When determining the relationship of a child born out of

wedlock to a deceased insured person under section 216(h)(2)(A), we

have always looked to the law that was in effect in the insured's State

of domicile at the time he or she died. Some Federal courts have also

interpreted the provision this way. See Schaefer on behalf of Schaefer

v. Heckler, 792 F.2d 81 (7th Cir. 1986); Ramon v. Califano, 493 F.

Supp. 158 (W.D. Tex. 1980); and Allen v. Califano, 452 F. Supp. 205 (D.

Md. 1978).

Other courts have adopted different interpretations. For example,

in Owens v. Schweiker, 692 F.2d 80 (9th Cir. 1982), the court held that

section 216(h)(2)(A) should be read to require the use of the State law

of domicile that was in effect at the time of our determination on the

child's claim. We, therefore, published a final rule (49 FR 21512) on

May 22, 1984, amending Sec. 404.354 of our regulations to clarify and

reinforce our policy on applying State inheritance laws. However, after

we amended our regulations, we also published Acquiescence Ruling (AR)

86-17(9) to clarify that we would apply the Owens decision to claims of

children residing in the 9th Circuit. (We are publishing a notice today

to rescind AR 86-17(9) effective with the effective date of these final

regulations.)

Still other courts have held that the relevant law is the law in

force at the time the child applies for benefits (see Cox on behalf of

Cox v. Schweiker, 684 F.2d 310 (5th Cir. 1982); and Hart by and through

Morse v. Bowen, 802 F.2d 1334 (11th Cir. 1986)).

Recognizing that the language in section 216(h)(2)(A) could be

viewed as ambiguous and has not been interpreted the same by all

courts, we are amending our policy as stated in Sec. 404.354(b). We

believe that a policy that permits us to apply any of several

potentially applicable State inheritance laws would best effectuate

Congress' intent with regard to serving the interests of a surviving

child born out of wedlock. Therefore, when the insured is deceased, we

will determine the status of such a child by applying the State

inheritance law that is in effect when we adjudicate the child's claim

for benefits. If the child does not have inheritance rights under that

version of State law, we will apply the State law that was in effect

when the insured died, or any version of State law in effect from the

time the child first could be entitled to benefits based on his or her

application until the time we make our final decision on the claim,

whichever version is more beneficial to the child.

We also explain in these final regulations how we will determine

which law was in effect as of the date of death. First we will look to

the inheritance law that was in effect on the date of the insured's

death. Then, if a law enacted after the insured's death is retroactive

to the date of his or her death, we will apply that law. However, if a

law in effect at the time of death was later declared unconstitutional,

we will apply the State law which superseded the unconstitutional law.

Regarding the child of a living insured worker, our rule in

Sec. 404.354(b) provided that the Commissioner will apply the

inheritance law that was in effect when the child's claim was filed. We

are amending Secs. 404.354 and 404.355 to clarify that we will look to

the versions of State inheritance laws that were in effect from the

first month for which the child could be entitled to benefits up to and

including the time of our final decision and we will apply the version

most beneficial to the child.

State Law Time Limits

As previously stated, section 216(h)(2)(A) of the Act provides

that, in determining whether an applicant is the child of a deceased

insured individual, the Commissioner shall apply such law as would be

applied in determining the devolution of intestate personal property by

the courts of the State in which the insured individual was domiciled

at the time of his or her death. That section further states that an

applicant who, according to such law, would have the same status

relative to taking intestate personal property as a child or parent

shall be deemed such respective child or parent.

Many State laws impose time limits within which someone must act to

establish paternity for purposes of intestate succession. Such time

limits are intended to provide for an orderly and expeditious

settlement of estates. Since this is not the purpose of Social Security

benefits for children, we provide in these final regulations that we

will not apply a State's time limits within which a child's

relationship must be established when we determine the child's status

under section 216(h)(2)(A). Not applying time limits is consistent with

our belief that such a policy on applying State inheritance laws will

best serve the interests of the children Congress sought to protect

when it enacted section 216(h)(2)(A) of the Act.

Court Order Requirements

Some State laws require a court determination of paternity for a

child born out of wedlock to have inheritance rights. In determining a

child's status under section 216(h)(2)(A), our policy has been to

require that a claimant submit a court determination of paternity if

one is required under State inheritance law. However, we are revising

this policy by stating in these rules that, regarding a State that

requires a court determination of paternity, we will use the standard

of proof that the State court would use as the basis for such a

determination, but we will not actually require a determination by a

State court. Of course, if a State court with jurisdiction over the

matter declares that a child can take a child's share of an insured

individual's estate under intestate inheritance laws, or if a State

court determines a child's paternity and such determination would

prevail in that State's intestacy proceedings, SSA could generally rely

on such State court findings. So, while we will not require an

applicant to

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obtain a State court's determination, we will be guided by such

determination that an applicant has obtained, subject to the

prerequisites stated in Social Security Ruling 83-37c for accepting

State court determinations. Those prerequisites are: (1) an issue in a

claim for Social Security benefits previously has been determined by a

State court of competent jurisdiction; (2) this issue was genuinely

contested before the State court by parties with opposing interests;

(3) the issue falls within the general category of domestic relations

law; and (4) the resolution by the State trial court is consistent with

the law enunciated by the highest court in the State.

If we evaluate paternity by using the same standards that the

appropriate State court would use if the issue were properly before it,

we believe we will satisfy the intent of section 216(h)(2)(A) that we

apply ``such law as would be applied'' by the State court to determine

inheritance rights. We believe that the requirement of section

216(h)(2)(A) to apply State law will be satisfied if we apply the same

substantive standard as a State court would apply to determine

paternity.

Legally Adopted Child

The provisions for paying benefits to children of an insured

individual were added to the Act by the Social Security Act Amendments

of 1939 (Public Law 76-379). Our policy for determining whether an

applicant qualifies as the ``child'' of an insured individual has

always been that we apply State law on inheritance rights to determine

the status under the Act of a natural child, i.e., biological child,

and State law on adoption to determine the status of a child legally

adopted by the insured. To avoid any uncertainty about our policy, we

are amending our regulations to state more clearly how we determine a

child's status as an individual's natural child or adopted child.

Section 202(d)(1) of the Act provides for benefits to a child as

defined in section 216(e) of the Act. Section 216(e) states, in part,

that the term ``child'' means the child or legally adopted child of an

individual. Section 216(e) further states the requirements for a person

to be deemed the legally adopted child of a deceased individual.

Section 216(e) thus distinguishes between a natural child and an

adopted child.

Further, section 216(h)(2)(A) provides that the status of an

applicant for benefits as a child (as opposed to a legally adopted

child, a stepchild, or other type of individual who can qualify under

section 216(e) of the Act as a ``child'' for purposes of section 202(d)

of the Act) is determined by applying the law on devolution of

intestate personal property that would be applied by the courts in the

State of the insured individual's domicile. This is a test for the

status of a natural child.

The legislative history of sections 216(e) and 216(h)(2)(A) shows

that Congress intended us to use section 216(h)(2)(A) to determine the

status of natural children. Section 209(k), enacted in 1939, provided

the first definition of ``child'' by stating in part that the term

means the child of an individual, the stepchild of an individual, and a

child legally adopted by an individual before the adopting individual

attained age 60 and prior to the beginning of the twelfth month before

the month in which he or she died. Section 209(m), also enacted in

1939, contained language that is the same as the present section

216(h)(2)(A) and described how we determine whether an applicant is the

child of the insured individual.

Then in 1946, Congress amended section 209(k) to allow some

children adopted by individuals aged 60 or older to receive benefits.

Congress' explanation of the amended section 209(k) was that under

existing provisions of the Act, a stepchild or an adopted child is not

a ``child'' for benefit purposes unless certain conditions are met.

H.R. Rep. No. 2526, 79th Cong., 2d Sess. 26 (1946); S. Rep. No. 1862,

79th Cong., 2d Sess. 34 (1946). Thus, since the first provision for

paying benefits to children of an insured worker, there has been a

clearly defined distinction between natural children and adopted

children and clearly defined conditions for determining the status of

an adopted child, which conditions are not affected by section

216(h)(2)(A).

Along with the structure of the Act and the legislative history of

provisions defining ``child,'' we have consistently interpreted the

State intestacy law provisions of section 216(h)(2)(A) as not applying

to children legally adopted by the insured individual. Our first

regulation on the status of a child was published in 1940. That

regulation defined a ``child'' as a son or daughter (by blood) of a

wage earner and then went on to define ``adopted children.'' 5 FR 1880

(May 21, 1940). We have maintained that position from the first

regulation to the present. In the present Sec. 404.354, we state that a

child may be related to the insured as a natural child, legally adopted

child, stepchild, grandchild, stepgrandchild, or equitably adopted

child. In Sec. 404.355, we explain the conditions for eligibility as a

natural child, which include applying State inheritance law, and in

Sec. 404.356 we state the requirement for eligibility as a legally

adopted child.

In these final regulations, we are amending Sec. 404.356 to

explicitly provide that we will determine an applicant's status as a

legally adopted child by applying the adoption laws of the State or

foreign country where the adoption took place.

Addition of Northern Mariana Islands

Further, we are adding the Northern Mariana Islands to the names of

entities whose laws we will use to determine a child's relationship to

the insured individual, depending on his or her permanent home.

Comments on Notice of Proposed Rulemaking (NPRM)

On January 30, 1997, we published proposed rules in the Federal

Register at 62 FR 4494 and provided a 60-day period for interested

individuals to comment. We received three letters with comments. One

commenter said the proposed regulations' use of the law most beneficial

to the interests of the child is a positive change which is consistent

with the Personal Responsibility and Work Opportunity Reconciliation

Act of 1996 (Public Law 104-193). Following are summaries of the other

two comments and our responses to them.

Comment: One commenter suggested that a mechanism be implemented

whereby SSA would notify the State Child Support Enforcement agency of

all paternity determinations we make.

Response: A determination of paternity made by SSA is not the

equivalent of an administrative order of paternity required by the

States. Paternity determinations made by SSA are used only for SSA

purposes.

Comment: One commenter was concerned that proposed Sec. 404.355

might be interpreted such that a child born out of wedlock for whom

paternity was not established while the insured was alive would not

qualify as the child of the insured. The commenter suggested that we

add clarifying language to Sec. 404.355(a)(3) to address this issue.

Response: We have revised Sec. 404.355(a) to clarify that

paragraphs 1 through 4 are alternative means of establishing a child's

status under the Act. As revised, subsection (a) provides that a child

may be eligible for benefits as the insured's natural child if the

child qualifies under any of the four paragraphs.

After considering the comments on the proposed regulations, we have

revised Sec. 404.355(a), as discussed in the response to the public

comment. We

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have also revised paragraph (b)(3) of Sec. 404.355 to clarify the rule

on selecting the State law that we apply in determining the

relationship between a child and an insured individual when the insured

is alive at the time the child applies for benefits on the insured's

earnings record. As revised, paragraph (b)(3) provides that we

determine the State where the insured individual had his or her

permanent home when the child applies for child's insurance benefits,

and we apply the law of that State. In addition, we have made several

minor, nonsubstantive revisions to the rules. With these exceptions, we

are publishing the proposed regulations unchanged as final regulations.

Regulatory Procedures

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 only individuals. Therefore, a regulatory flexibility analysis

as provided in the Regulatory Flexibility Act, as amended, is not

required.

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. Thus, they

were not subject to OMB review.

Paperwork Reduction Act

These final regulations impose no additional reporting or

recordkeeping requirements necessitating clearance by OMB.

List of Subjects in 20 CFR Part 404

Administrative practice and procedure, Blind, Disability benefits,

Old-Age, Survivors and Disability Insurance, Reporting and

recordkeeping requirements, Social Security.

(Catalog of Federal Domestic Assistance Program Nos. 96.001 Social

Security-Disability Insurance; 96.002 Social Security-Retirement

Insurance; 96.004 Social Security-Survivors Insurance)

Dated: October 20, 1998.

Kenneth S. Apfel,

Commissioner of Social Security.

For the reasons set out in the preamble, we are amending subpart D

of part 404 of chapter III of title 20 of the Code of Federal

Regulations as set forth below.

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE

(1950- )

Subpart D--[Amended]

1. The authority citation for subpart D of part 404 continues to

read as follows:

Authority: Secs. 202, 203(a) and (b), 205(a), 216, 223, 225,

228(a)-(e), and 702(a)(5) of the Social Security Act (42 U.S.C. 402,

403(a) and (b), 405(a), 416, 423, 425, 428(a)-(e), and 902(a)(5)).

2. Section 404.354 is revised to read as follows:

Sec. 404.354 Your relationship to the insured.

You may be related to the insured person in one of several ways and

be entitled to benefits as his or her child, i.e., as a natural child,

legally adopted child, stepchild, grandchild, stepgrandchild, or

equitably adopted child. For details on how we determine your

relationship to the insured person, see Secs. 404.355 through 404.359.

3. Section 404.355 is revised to read as follows:

Sec. 404.355 Who is the insured's natural child?

(a) Eligibility as a natural child. You may be eligible for

benefits as the insured's natural child if any of the following

conditions is met:

(1) You could inherit the insured's personal property as his or her

natural child under State inheritance laws, as described in paragraph

(b) of this section.

(2) You are the insured's natural child and the insured and your

mother or father went through a ceremony which would have resulted in a

valid marriage between them except for a ``legal impediment'' as

described in Sec. 404.346(a).

(3) You are the insured's natural child and your mother or father

has not married the insured, but the insured has either acknowledged in

writing that you are his or her child, been decreed by a court to be

your father or mother, or been ordered by a court to contribute to your

support because you are his or her child. If the insured is deceased,

the acknowledgment, court decree, or court order must have been made or

issued before his or her death. To determine whether the conditions of

entitlement are met throughout the first month as stated in

Sec. 404.352(a), the written acknowledgment, court decree, or court

order will be considered to have occurred on the first day of the month

in which it actually occurred.

(4) Your mother or father has not married the insured but you have

evidence other than the evidence described in paragraph (a)(3) of this

section to show that the insured is your natural father or mother.

Additionally, you must have evidence to show that the insured was

either living with you or contributing to your support at the time you

applied for benefits. If the insured is not alive at the time of your

application, you must have evidence to show that the insured was either

living with you or contributing to your support when he or she died.

See Sec. 404.366 for an explanation of the terms ``living with'' and

``contributions for support.''

(b) Use of State Laws--(1) General. To decide whether you have

inheritance rights as the natural child of the insured, we use the law

on inheritance rights that the State courts would use to decide whether

you could inherit a child's share of the insured's personal property if

the insured were to die without leaving a will. If the insured is

living, we look to the laws of the State where the insured has his or

her permanent home when you apply for benefits. If the insured is

deceased, we look to the laws of the State where the insured had his or

her permanent home when he or she died. If the insured's permanent home

is not or was not in one of the 50 States, the Commonwealth of Puerto

Rico, the Virgin Islands, Guam, American Samoa, or the Northern Mariana

Islands, we will look to the laws of the District of Columbia. For a

definition of permanent home, see Sec. 404.303. For a further

discussion of the State laws we use to determine whether you qualify as

the insured's natural child, see paragraphs (b)(3) and (b)(4) of this

section. If these laws would permit you to inherit the insured's

personal property as his or her child, we will consider you the child

of the insured.

(2) Standards. We will not apply any State inheritance law

requirement that an action to establish paternity must be taken within

a specified period of time measured from the worker's death or the

child's birth, or that an action to establish paternity must have been

started or completed before the worker's death. If applicable State

inheritance law requires a court determination of paternity, we will

not require that you obtain such a determination but will decide your

paternity by using the standard of proof that the State court would use

as the basis for a determination of paternity.

(3) Insured is living. If the insured is living, we apply the law

of the State where the insured has his or her permanent home when you

file your application for benefits. We apply the version of State law

in effect when we make our final decision on your

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application for benefits. If you do not qualify as a child of the

insured under that version of State law, we look at all versions of

State law that were in effect from the first month for which you could

be entitled to benefits up until the time of our final decision and

apply the version of State law that is most beneficial to you.

(4) Insured is deceased. If the insured is deceased, we apply the

law of the State where the insured had his or her permanent home when

he or she died. We apply the version of State law in effect when we

make our final decision on your application for benefits. If you do not

qualify as a child of the insured under that version of State law, we

will apply the version of State law that was in effect at the time the

insured died, or any version of State law in effect from the first

month for which you could be entitled to benefits up until our final

decision on your application. We will apply whichever version is most

beneficial to you. We use the following rules to determine the law in

effect as of the date of death:

(i) If a State inheritance law enacted after the insured's death

indicates that the law would be retroactive to the time of death, we

will apply that law; or

(ii) If the inheritance law in effect at the time of the insured's

death was later declared unconstitutional, we will apply the State law

which superseded the unconstitutional law.

4. Section 404.356 is amended by adding a sentence at the end to

read as follows:

Sec. 404.356 Who is the insured's legally adopted child?

* * * We apply the adoption laws of the State or foreign country

where the adoption took place, not the State inheritance laws described

in Sec. 404.355, to determine whether you are the insured's legally

adopted child.

[FR Doc. 98-28707 Filed 10-27-98; 8:45 am]

BILLING CODE 4190-29-P