SSR 76-18: SECTIONS 1611(a)(1) and 1612(a) and (b) (42 U.S.C. 1382(a)(1), and 1382a(a)and (b)) -- SUPPLEMENTAL SECURITY INCOME -- UNEARNED INCOME -- SERVICE ALLOTMENTS

20 CFR 416.1102(a)

SSR 76-18

It has been determined that the claimant meets all factors eligibility

for supplemental security income except with respect to the question of

income. Accordingly, the issue before the Hearing Examiner is whether the

claimant's income, other than income excluded pursuant to section 1612(b)

of the Social Security Act, is at a rate of no more than $1,752 per

calendar year as set forth in section 1611(a)(1)(A) of the Act.

At the hearing, the claimant readily testified that she had been

receiving the sum of $180 monthly as an allotment from her daughter who

entered the Army in June, 1974. These allotments were effective with the

month of January, 1975, and the claimant testified that the allotment

check was made to her solely. However, she testified that the intent of

the allotment check was not for her sole use; rather, her daughter had

instructed her to place the money in a joint savings account and the

claimant was to use whatever was necessary to maintain a decent standard

of living, particularly in the area of food acquisition. According to the

claimant, when her daughter was discharged from the Army she planned to

use the money left in the savings account for educational expenses. The

claimant further testified that she never used all of the $180 monthly for

her own expenses. In fact, she seldom used as much as one-half of the

money sent for her own personal use. Claimant also testified that at the

time that her daughter made the allotment payable to her, she was not

receiving supplemental security income benefit checks but was subsequently

restored to supplemental security income benefits.

The claimant did not present the savings account book which would have

shown the deposits and withdrawals from the joint account which was

maintained and supplemented with the allotment check.

time that her daughter made the allotment payable to her, she was not

receiving supplemental security income benefit checks but was subsequently

restored to supplemental security income benefits.

The claimant did not present the savings account book which would have

shown the deposits and withdrawals from the joint account which was

maintained and supplemented with the allotment check.

A representative of the Social Security Office personally inspected the

records of the Army Finance Center, Indianapolis, Indiana, to verify the

allotment in question. He found that the allotment was in the amount of

$180 monthly beginning January, 1975, through April, 1975, and $100

monthly beginning May, 1975. There was on record a request from the

daughter that the allotment be terminated effective July, 1975.

Section 1611(a)(1)(A) of the Social Security Act provides, as pertinent

herein, that a disabled individual who does not have an eligible spouse

and whose income, other than income excluded pursuant to section

1612(b)(2) is at a rate of not more than $1,752 per calendar year shall be

an eligible individual for purposes of the Act.

Section 1612(a) of the Social Security Act states that "income" means

both earned and unearned income. "Earned income" means only wages and net

earnings from self-employment as defined in sections 203 and 211 of the

Act, respectively, (with exceptions as provided in section 1612(a))."

"Unearned income" means all other income.

Section 1612(b) sets forth the types of income which may be excluded in

determining an individual's income for the purpose of title XVI of the

Social Security Act.

Section 1612(b)(2) of the Social Security Act provides, as pertinent

herein, that in determining the income of an individual there shall be

excluded the first $240 per year (or proportionately smaller amounts for

shorter periods) of income (whether earned or unearned) other than income

which is paid on the basis of the need of the eligible individual.

tle XVI of the

Social Security Act.

Section 1612(b)(2) of the Social Security Act provides, as pertinent

herein, that in determining the income of an individual there shall be

excluded the first $240 per year (or proportionately smaller amounts for

shorter periods) of income (whether earned or unearned) other than income

which is paid on the basis of the need of the eligible individual.

Section 416.1102(a) of Regulations No. 16 defines income. The term

"income" for purposes of title XVI of the Social Security Act (the

Supplemental Security Income Law) means the receipt by an individual of

any property or service which he can apply, either directly or by sale or

conversion, to meeting his basic needs for food, clothing, and shelter.

The law and regulations cited above provide that a disabled individual is

entitled to supplemental security income benefits only if her income,

after excludable deductions, does not exceed the sum of $1,752 yearly, or

$438 quarter (or $146 monthly if claimant is potentially entitled to one

or more payments during a calendar quarter). Regulations No. 16, section

416.1102(a) defines income for purposes of title XVI as the receipt by an

individual of any property or service which he can apply (emphasis

supplied), either directly or by sale or conversion to meeting his basic

needs for food, clothing, and shelter. In view of this regulation, it

becomes clear that the allotment to the claimant by her daughter could

have been wholly applied by the claimant toward meeting her basic needs

for food, clothing, and shelter. It does not matter that the proceeds of

the allotment were not, in fact, so applied by the claimant so long as she

could have applied the proceeds in the manner mentioned by the

regulations. Certainly, this might seem inequitable if the claimant

applied only a portion of the allotment toward her living expenses, as she

testified

meeting her basic needs

for food, clothing, and shelter. It does not matter that the proceeds of

the allotment were not, in fact, so applied by the claimant so long as she

could have applied the proceeds in the manner mentioned by the

regulations. Certainly, this might seem inequitable if the claimant

applied only a portion of the allotment toward her living expenses, as she

testified. However, the regulations are clear that the entire amount of

the allotment must be charged as income to the claimant.

The only exclusion that can be applied toward the allotment proceeds

received by the claimant is the exclusion outlined in section 1612(b)(2)

of the law which provides for an exclusion of $240 yearly or $60 quarterly

or $20 monthly. In this case, section 1611(c)(1) of the law provides for

quarterly computation of countable income.

In accordance with the above, it is concluded and found by the Hearing

Examiner that the claimant is not entitled to supplemental security income

benefits for the quarter ending in March, 1975, by reason of the fact that

she was receiving income in excess of the amount allowed by law.

For the three months ending in June, 1975, it is found that the claimant

received the sum of $380 as proceeds of the allotment. Deducting the sum

of $60 in accordance with law, the countable income of the claimant for

that quarter was $320. Deducting $320 from potential payments of $438

($146 for three months) results in the amount of $118 in benefits owing to

the claimant for the quarter ending June 30, 1975.