AR 99-1(2): Rescinded June 16, 2008

Rescinded effective June 16, 2008 [Notice published May 15, 2008 at FR 73-95 page 28181]

AR 99-1(2)

EFFECTIVE/PUBLICATION DATE: 2/1/99

Acquiescence Ruling 99-1(2)

Issue:

Whether a stepparent is considered an ineligible parent whose

income is subject to deeming to a child eligible for Supplemental

Security Income (SSI) when the natural or adoptive parent is not living

in the same household.

Statute/Regulation/Ruling Citation:

Section 1614 of the Social Security Act (42 U.S.C. 1382c), 20 CFR

416.1101, 416.1160, 416.1806.

Circuit:

Second (Connecticut, New York and Vermont).

Florez on Behalf of Wallace v. Callahan , 156 F.3d 438

(2d Cir. 1998).

Applicability of Ruling:

This Ruling applies to all determinations,

including all post-eligibility determinations, or decisions at all

administrative levels (i.e., initial, reconsideration, Administrative

Law Judge (ALJ) hearing and Appeals Council).

Description of Case:

Raul Wallace was born on October 28, 1982. His

natural father is deceased. His natural mother is married to Jorge

Florez, the plaintiff, but she abandoned her husband and children in

1985. Mr. Florez later obtained full custody of Raul and an order of

protection against Raul's mother that instructed her to stay away from

the family residence and the plaintiff's place of business. Mr. Florez

has unsuccessfully attempted to obtain a divorce from Raul's mother and

remains married to her. Raul lived with his stepfather until July 31,

1991, when Raul voluntarily began inpatient psychiatric treatments on a

weekly basis from Monday afternoon through Friday morning. During the

weekends he lived at the Florez apartment.

e family residence and the plaintiff's place of business. Mr. Florez

has unsuccessfully attempted to obtain a divorce from Raul's mother and

remains married to her. Raul lived with his stepfather until July 31,

1991, when Raul voluntarily began inpatient psychiatric treatments on a

weekly basis from Monday afternoon through Friday morning. During the

weekends he lived at the Florez apartment.

Mr. Florez filed an application, on behalf of Raul, for SSI based on

disability on March 24, 1992. The Social Security Administration (SSA)

determined that Raul satisfied the disability requirements of the Social

Security Act (the Act) retroactive to August 1, 1989, based on an

earlier application. SSA also determined that Raul was not eligible for

any payments for the 16-month period between August 1989 and December

1990 because Mr. Florez' income was too high. Mr. Florez requested

reconsideration of the benefit amount, which was denied on the grounds

that his income as a stepparent was deemable to Raul. The plaintiff

requested and received a hearing before an ALJ who found that SSA had

correctly calculated the SSI benefits. After the Appeals Council denied

the claimant's request for review, he sought judicial review but the

district court affirmed SSA's application of the regulations providing

for deeming a stepparent's income. Mr. Florez appealed this decision

to the United States Court of Appeals for the Second Circuit.

Holding:

aring before an ALJ who found that SSA had

correctly calculated the SSI benefits. After the Appeals Council denied

the claimant's request for review, he sought judicial review but the

district court affirmed SSA's application of the regulations providing

for deeming a stepparent's income. Mr. Florez appealed this decision

to the United States Court of Appeals for the Second Circuit.

Holding:

The Second Circuit reversed in part the judgment of the

district court and remanded the case with instructions to recalculate

Raul's SSI benefits excluding the income earned by his stepfather.

After reviewing SSA's regulations governing deeming of income and

defining who is the spouse of a natural or adoptive parent, the court

held that 20 CFR 416.1101 creates a two-part test for determining

whether a spouse, who lives with a child eligible for SSI, is an

ineligible parent for deeming purposes under 20 CFR 416.1160: (1) the

spouse must live with the natural or adoptive parent; and (2) the

relationship must be as husband or wife, as further defined in 20 CFR

416.1806.

Under the Second Circuit's construction of this regulation, it found

that Mr. Florez's marriage to Raul's mother ended, for all intents and

purposes, when she abandoned the family home. Although the court

recognized SSA's concern about holding a natural parent financially

responsible for contributing to the care of a child eligible for SSI,

the court believed that SSA should not discourage a stepparent from

voluntarily accepting such financial responsibility, when the natural

parent has abandoned the child, by reducing the stepchild's SSI

benefits. The court concluded that the plain language of the

regulations (20 CFR 416.1101 and 416.1806), supported by the legislative

history of the Act, required SSA to exclude a stepparent's income from

the calculations used to determine the amount of a child's SSI benefits

when the natural parent no longer lives in the family home.

t has abandoned the child, by reducing the stepchild's SSI

benefits. The court concluded that the plain language of the

regulations (20 CFR 416.1101 and 416.1806), supported by the legislative

history of the Act, required SSA to exclude a stepparent's income from

the calculations used to determine the amount of a child's SSI benefits

when the natural parent no longer lives in the family home.

Statement as to How Florez Differs From SSA's Interpretation

of the Regulations

Section 1614(f) of the Act, as implemented by the regulations, provides

that, when determining SSI eligibility and the benefit amount of a child

under age 18, the child's income shall be deemed to include the income

of a parent (or the spouse of such parent) who is ineligible for SSI

benefits and is living in the same household as the child. Under SSA's

regulations, 20 CFR 416.1160 defines an ineligible parent as "a natural

or adoptive parent, or the spouse (as defined in §416.1101) of a natural

or adoptive parent, who lives with [the child] and is not eligible for

SSI benefits." Spouse is defined in 20 CFR 416.1101 as "someone who

lives with another person as that person's husband or wife. (See

§416.1806)" Under 20 CFR 416.1806(a)(1), SSA considers someone to be a

person's spouse for SSI purposes if they are legally married under State

law.

SSA considers 20 CFR 416.1806 to be the controlling regulation for

determining who is a person's spouse for SSI purposes and for deeming of

income. Accordingly, SSA deems the income of a stepparent to a child

eligible for SSI benefits living in the same household when the

stepparent is legally married under State law to that child's natural or

adoptive parent, even if the natural or adoptive parent is not living in

the same household.

rolling regulation for

determining who is a person's spouse for SSI purposes and for deeming of

income. Accordingly, SSA deems the income of a stepparent to a child

eligible for SSI benefits living in the same household when the

stepparent is legally married under State law to that child's natural or

adoptive parent, even if the natural or adoptive parent is not living in

the same household.

The Second Circuit held that 20 CFR 416.1101 is the controlling

regulation for the purpose of determining who is a person's spouse under

the deeming regulations. The court concluded that, under the two-part

test created by this regulation, a stepparent is not an ineligible

spouse and deeming of income does not apply when the natural parent no

longer lives in the family home.

Explanation of How SSA Will Apply The Florez Decision Within

the Circuit

This Ruling applies only where the SSI claimant is an eligible child who

resides in Connecticut, New York or Vermont at the time of the

determination (including all post-eligibility determinations) or

decision at any administrative level of review, i.e., initial,

reconsideration, ALJ hearing or Appeals Council.

When deeming income from an ineligible parent who is a stepparent to

reduce a child's SSI benefit, adjudicators must exclude the income of

the stepparent from the deeming calculation if the natural or adoptive

parent is not living in the same household with that child and

stepparent. Adjudicators will continue to apply SSA's other rules for

applying and calculating deeming of income, including the rules

regarding temporary absences.